Real estate industry

The real estate sector faces new rules aimed at discrimination

New state laws targeting discrimination in the real estate industry have given brokers more responsibility for supervising agents and creating standard procedures for dealing with clients, a senior Long Island Board of Realtors official said.

One of the new laws, signed by Governor Kathy Hochul in December, imposes obligations on associate realtors who serve as office managers. They are now required to supervise real estate agents. The State Department, which regulates real estate licensing, could file a lawsuit against an office manager for “failure to supervise” if a brokerage agent discriminates.

“It’s created a new obligation for office managers that didn’t exist before,” Patrick Fife, associate general counsel for the real estate board, said last week at a fair housing forum hosted by Nassau County. Bar Association. About 100 people, including lawyers and real estate agents, attended the event in Mineola. “The state wants to see active oversight by office managers and brokers,” he said.

The forum began with a discussion of Newsday’s Long Island Divided series, a three-year investigation published in November 2019, which found evidence of widespread separate and unequal treatment of minority potential buyers and minority communities on Long Island. . The survey used undercover fair housing testers to determine whether white and minority potential buyers were treated differently by real estate agents while presenting the same financial profile and search criteria. The survey showed that black testers received disparate treatment 49% of the time. Hispanic testers were treated differently in 39% of cases and Asian testers in 19%, according to fair housing experts who reviewed Newsday’s video recordings of the encounters.

Newsday’s Long Island Divided series led to Senate hearings and the passage of new laws.

The new real estate laws were crafted after a series of state Senate hearings on housing discrimination that took place in response to Newsday’s investigation. The nine laws include tougher penalties for housing discrimination, increased training requirements for real estate agents and rules requiring standardization of how agents treat potential clients.

Standardized procedures are designed to prevent real estate agents from setting different standards for potential buyers seeking their services. The law requires brokers to establish policies on whether they require potential clients to show identification, sign an exclusive brokerage agreement, and receive pre-approval for a mortgage before working with a client. Brokers can choose to require none, some or all of these documents, but they should be consistent, Fife said.

In one case featured in Newsday’s Long Island Divided series, Anne Marie Queally Bechand, a real estate agent formerly of Signature Premier Properties, demanded that a Black Fair housing tester be prequalified for a mortgage before showing her homes, but didn’t demand the same from a white tester, whom she took on two home visits. Queally Bechand’s license was revoked in January 2020.

“The state wants to see consistent and clear operating procedures and communication, not only within the office, but [with] the public,” Fife said.

If a broker decides they don’t need mortgage pre-approvals before working with a homebuyer, an agent working under that broker’s supervision cannot impose that requirement on a potential client, he said. .

“There are no exceptions,” Fife said.

Brokers are required to post information about their policies prominently on public websites, mobile apps, in offices and provide it to homebuyers upon request. These policies can help buyers understand what the brokerage requires and ensure they are not treated differently from others, Fife said.

Martine Hackett, an associate professor of population health at Hofstra University who was one of Newsday’s Long Island Divided undercover testers, said at the forum Thursday that the way officers treated testers differently was subtle and only became apparent after watching the video recordings.

“You would never know you were treated differently until you had something to compare to,” she said.

Ian Wilder, Executive Director of Long Island Housing Services, speaks at...

Ian Wilder, executive director of Long Island Housing Services, speaks at the housing fair on June 9.
Credit: Newsday/Thomas A. Ferrara

Ian Wilder, executive director of Long Island Housing Services, said realtors can use standardized practices to promote themselves to communities that have been impacted by housing discrimination and predatory lending in the past. That way, fair housing isn’t just about equal treatment, it’s smart business, he said.

“You want to use it as a selling point, ‘This is how we treat everyone the same,'” Wilder said.

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