Oregon sanctioned by lawsuit for banning ‘love letters’ in booming real estate market

A real estate company seeks to block a new oregon law which prohibits real estate agents from transmitting “love letters” from buyers to sellers.

A lawsuit filed in federal court Friday by the conservative Pacific Legal Foundation on behalf of Total Real Estate Group alleges that the state’s ban on such communications violates the First Amendment rights of real estate brokers and their clients.

“This censorship is based on simple speculation that sellers could sometimes rely on the information in these letters to discriminate on the basis of a protected class,” according to the lawsuit.

Oregon Attorney General Ellen Rosenblum and Oregon Real Property Commissioner Steve Strode could not be reached for comment.

Oregon is the first state to ban this practice. Under the law, which is expected to come into effect in January, realtors will not be allowed to convey personal arguments from buyers that may include details about people’s lives as well as photographs and videos. Buyers will still be allowed to communicate directly with sellers of homes.

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In hot markets where multiple bidders are competing for the same home, buyers will do just about anything to get their offer noticed – and that includes writing “love letters” in the hopes of making a personal connection. with a seller.

Increasingly, the real industry is concerned that “love letters” could violate federal and state fair housing laws by revealing race, color, religion, gender, orientation. sex, national origin, marital status or family status of the buyer. Many real estate agents refuse to accept or deliver them.

Democratic Representative Mark Meek, the state lawmaker who sponsored the legislation, told USA TODAY in August that Oregon does not impede free speech.

“We limit the transmission of communications that are irrelevant and could potentially violate fair housing laws,” he said.

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No other state has followed Oregon’s lead.

Daniel Ortner, an attorney for the Pacific Legal Foundation, said the law is “a flagrant violation of the First Amendment”.

“Love letters” can help first-time buyers compete with cash-rich buyers or institutional investors and can help sellers find buyers who will take care of their homes and be good neighbors, Ortner said. The letters signal genuine interest in a property, he said.

Ortner said supporters of the law had not produced any examples of fair housing complaints or lawsuits as a result of love letters.

“It’s a solution in search of a problem. There is no evidence that this is a real problem that actually leads to discrimination, ”he said. “And you can’t just ban entire types of communication lest a small part of it might be used by someone in some way. “

The backlash against love letters is part of an industry-wide account with its complicity in decades of housing discrimination and segregation that have kept black Americans from homeownership.

In 2019, Newsday released the results of a three-year covert investigation that uncovered discriminatory practices in the sale of homes by real estate agents that helped maintain the segregation of neighborhoods in Long Island, New York. Officers treated people of color unevenly, especially black residents, the investigation found.

Efforts to reform racist practices and increase black home ownership intensified after the murder of George Floyd in Minneapolis.

Last year, the National Association of Realtors warned members that love letters were not as harmless as they seemed.

But as stratospheric prices and record low housing inventories fuel bidding wars, love letters are more popular than ever.

Realtors have said they don’t want to disadvantage their buyers in competitive situations by refusing to let them through. In addition, they said, sellers are primarily influenced by the price and terms of the offer.

But the right words can be convincing. In 2019, real estate brokerage Redfin studied the most effective strategies to win a bidding war. Cash offers have more than tripled a buyer’s chances. Writing a love letter came in second, increasing the odds of a buyer by 59%.

This article originally appeared on USA TODAY: Oregon sued over law banning real estate “love letters” in trending market