The nation's first ban on real estate "love letters" was struck down by a federal judge. See what led to the ruling and what's next.
The nation’s first ban on real estate “love letters” has been lifted.
What’s a “love letter” when it comes to housing? It’s an attempt to connect emotionally to the seller and explain why the buyer’s offer should be accepted.
For example, a letter might say, “I can see my three kids playing in the backyard,” or “Being a person with a disability, it will be easy for me to get around your one-level home.”
In July, Oregon became the first state to prohibit the controversial letters citing their tendency to stir up Fair Housing Act violations by revealing a buyer’s race, religion, sexual orientation, familial status or disability. But on March 4 federal judge Marco A. Hernandez struck down the ban saying it likely violates the First Amendment.
His legal opinion on the matter states:
“It is not in the public interest to enforce a law that is likely unconstitutional, even one aimed at the laudable goal of reducing unlawful discrimination in housing.”
The issue wasn’t so much with the love letter ban, but with how the law (House Bill 2550) is written.
HB 2550 prohibited any written communication outside of “customary documents.” However, it failed to specify what exactly those include. Because of this, Hernandez ruled the law was overly broad and would restrict the free speech rights of real estate agents.
His preliminary injunction prevents The Oregon Real Estate Agency from enforcing the ban until he can make a final decision.
Elsewhere in his opinion Hernandez acknowledged the state’s “long and abhorrent history of racial discrimination in property ownership and housing” and pointed to expert witness testimony that found 93% of all love letters disclosed information that could violate the Fair Housing Act.
Although Hernandez has yet to make a final ruling, his preliminary injunction points to the love letter ban being voided.
If that’s the case, it would be up to Oregon legislators and the Oregon Real Estate Agency to write and pass a more specific bill. Neither party has commented on Friday’s ruling other than to confirm they will abide by it.
Even without a ban, love letters have been losing steam as seller’s agents try to steer clear of Fair Housing Act violations.
In October 2020, the National Association of REALTORS® (NAR) – America’s largest trade association with more than 1.5 million members – released guidance surrounding this practice, which includes the following:
“Inform your clients that you will not deliver buyer love letters, and advise others that no buyer love letters will be accepted as part of the MLS listing.”
The NAR guidance uses the example of a love letter depicting the potential buyer’s children running down the stairs on Christmas morning. The scenario reveals both the buyers religion and familial status, and opens the door to fair housing violations.
Despite the potential to be problematic, Hernandez argued that they may have practical applications that don’t clash with Fair Housing laws.
These scenarios include “a desire to live permanently in the area, to explain unusual provisions of the offer, to discuss a love of gardening and how the home is well-suited for the growing of plants, to admire the architectural style of the home, and to explain why a certain repair is important to the prospective buyer.”
