Oregon sued over law banning real estate “love letters” in trending market

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A real estate company is seeking to block a new Oregon law that prohibits real estate agents from passing “love letters” from buyers to sellers.

The 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 new law, which is expected to come into effect in January, realtors will not be allowed to convey personal arguments from buyers that may include personal 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 compete for the same home, buyers will do just about anything to get their bid noticed – and that includes writing “love letters” in the hopes of establishing a personal bond 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.

No other state has followed Oregon’s lead.

Daniel Ortner, an attorney for the Pacific Legal Foundation, says Oregon 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 also signal genuine interest in a property, he said.

At the same time, Ortner says supporters of the law have produced no 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 results in 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 published 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.

The love letters gained national attention last year when the National Association of Realtors warned its members that they are not as harmless as they seem.

But as stratospheric prices and record housing stock fuel bidding wars across the country, love letters are more popular than ever.

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

But the right words can also be persuasive. In 2019, Redfin studied the most effective strategies for winning 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%.

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