Brokers flout Fair Housing laws with impunity

When it comes to many matters relating to real estate, the Big Apple often lags the rest of the country.

One prime example discussed on this blog concerns the continuing resistance, especially by the biggest brokerages, to a Multiple Listing Service (MLS) even while reluctantly accepting VOWs (Virtual Online Web sites).

Another example involves the strictures of the Fair Housing Act, along with other anti-discrimination legislation on the municipal, state and and federal levels.

Such measures protect certain “classes” of consumers–for instance, by the source of their income, marital status, age, race and sexual orientation.  (In D.C., sellers may not discriminate by what is called matriculation, that is, against students.)  The list of protected classes can rise into the high teens.

Well schooled about the subtleties of the law when I was affiliated with Long & Foster Real Estate in D.C., I was astonished to see how flagrantly the provisions of the law were violated with impunity by brokers here in New York City.

Some firms seem to treat brokers like employees

As independent contractors, good real estate brokers work hard. (Flickr photo by Christolakis.)

A New York Times front-page article on the IRS cracking down on companies that blur the line between independent contractors and employees caught my eye.  Some brokerage firms nudge that line all the time.

What if one lawyer represented both sides?

In my four years as a broker with Long & Foster in Washington, D.C., Virginia and Maryland, only once did I complete a transaction while simultaneously representing the buyer and the seller of my listing.

The practice is known as dual agency; that is, the broker is the agent of both buyer and seller.  It is a little bit like having a single lawyer representing both complainant and respondent in the same trial.  And that would never happen.

In the D.C. area, dual agency is strongly discouraged and, in Maryland, as I recall, outlawed.  Why?  The impossibility is argued of one person being able to represent the best interests of parties on the opposite sides of a one transaction.

Conflicts of interest are virtually unavoidable.