He Fought The Law, And The Law Won

He Fought The Law And The Law Won 850 x 250

The Facts

Jake Lawrie, a newly minted independent real estate agent, advertised multiple properties for rent online on behalf of a new client. Based on guidance from the property owners, Jake noted in his promotions that housing assistance, such as section 8 housing vouchers provided by the Department of Housing and Urban Development, would not be accepted as payment. This representation is a violation of state and federal law. Jake received notice of the violation directly from the Division of Civil Rights on behalf of the state, which used its statutory authority to propose fines against him. The Division of Civil Rights is responsible for enforcing the Law Against Discrimination (LAD) which provides, in relevant part, that it is unlawful for real estate agents to discriminate against prospective tenants based on the source of lawful income they plan to use to pay rent. 


The Result

Typically, claims of housing discrimination are brought on behalf of potential renters, or a tester, who allege that they discriminated against by an insured real estate agent. However, in this instance, as Jake received notice of the violation directly from the state, it is not a licensing complaint. Because it was a direct fine levied per state statute, the damages were excluded from coverage under policy. The state levied fines totaling $15,000 against the agent. 

Risk Factors

Risk Factor #1

Jake was unaware of state and federal laws regarding tenant discrimination. Be diligent in following all relevant laws and requirements, especially those related to discrimination. 

Risk Factor #2 

All real estate professionals should be cognizant of relevant laws in the area where they transact business. Complete regular training to ensure compliance with local and federal laws.   

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