Q: I am a listing agent and I just received an offer on behalf of a buyer from an agent with another brokerage. That agent attached a letter from the prospective buyers along with their picture (a cute couple and their dog). The letter goes into some detail about the buyers, their family background and how much they like the home because it is close to their church. I am concerned that this letter could be grounds for a fair housing claim.
Also, if a buyer asks me to present such a letter what is the best practice?
A: Buyers’ letters to Sellers that promote themselves on non-creditworthy bases (especially if they include pictures) could be a basis for a claim that there has been a violation of state or federal Fair Housing laws and allegations of discrimination. If a Seller chooses one Buyer over another based on any of the suspect classifications (race, religion, family status, sexual orientation), then the Seller faces potential liability.
As a Buyer’s Agent, the best practice would be to neither encourage nor discourage the practice. If a Buyer insists upon writing such a letter, it would be the Agent’s duty to present it as instructed by their client.
On the listing side, if such a letter is received, the Seller’s Agent should warn the Seller about the existence of state and Fair Housing laws (referencing the SBSA or comparable local Advisory), and that the Seller should not accept any of the information that is in a Buyer’s letter or anything accompanying such a letter which would tend to favor or disfavor these Buyers if doing so violates the Fair Housing laws.
PRACTICE TIPS
1. As a Buyer’s Agent, it is best not to encourage Buyers to submit “personalized” introductory letters, but if instructed by a Buyer client to do so, then document the file that you are following the Buyer’s instructions and present the introductory letter.
2. As a Seller’s Agent, if you receive a “personalized” letter from a Buyer or Buyer’s Agent, present it to the Seller. Advise the Seller that the letter cannot be used as a basis for determining which Buyer to choose if it demonstrates discrimination against buyers with characteristics that fall within any Fair Housing protected classes. Nor can the letter be used to favor a particular type of buyer over other prospective buyers who may be within one of those protected classes. The buyers’ creditworthiness is the safest way to choose between buyers.
For more information on Fair Housing laws and a list of state and federal protected classes under those laws, see Weekly Practice Tip “Discrimination in Housing.”
This Weekly Practice Tip is an attorney-client privileged document for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.
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