LEGAL CORNER: New Fair Housing Regulations Go into Effect on June 20, 2020
John Dolgetta, Esq. | May 2020
During this difficult period, when individuals and businesses are concerned primarily with the personal and economic impact being caused by the COVID-19 Pandemic, it is important that real estate brokers and agents continue to keep up with the new legal developments. On Dec. 16, 2019, Gov. Andrew Cuomo announced new regulations (“New Fair Housing Regulations”), approved by the New York State Real Estate Board, to assist with combating housing discrimination [see https://on.ny.gov/2Wv44g5 and https://bit.ly/3bq639H]. These regulations were a direct result of the Newsday investigation which rocked the real estate industry in Long Island as well as the rest of New York. These new regulations are set to go into effect on June 20, 2020 and all licensees need to be aware of these new requirements.
The New Fair Housing Disclosure
Under subsection (a) of Section 175.28, “[a] real estate broker shall be responsible to ensure that each individual licensed pursuant to Article 12-A of the New York Real Property Law and associated with such broker provides to a prospective purchaser, tenant, seller, or landlord upon first substantive contact a disclosure notice furnished by the Department….” This new disclosure (the “Disclosure”) which sets forth references to relevant provisions of the New York State Human Rights Law, also provides the consumer with the necessary information as to how to file a complaint for housing discrimination. A copy of the new disclosure is located on the New York State Department of State website [see https://on.ny.gov/2Wu05Ar]. It is incumbent on the broker to ensure that their agents are provided with this new disclosure and that they provide this to all clients upon “first substantive contact.”
The Fair Housing Disclosure May Be Provided Electronically
Section 175.28(b) provides that the Disclosure “…may be provided to a prospective purchaser, tenant, seller, or landlord by any of the following means: e-mail, text, electronic messaging system, facsimile, or hardcopy.” If an agent elects to provide a prospective purchaser, tenant, seller, or landlord with the Disclosure by e-mail or other “electronic communication” which contains a link that directs any such person to the Disclosure, the e-mail or other communication must include text that clearly states the link contains information regarding the New York State Human Rights Law. A licensee cannot relay this information verbally.
The New Disclosure Requirement Applies to All Properties
Section 175.28(c) requires that the Disclosure must be provided to all prospective clients in connection with “…all real property whether or not it is used or occupied, or intended to be used or occupied, wholly or partly, as a home or residence of one or more persons regardless of the number of units, and shall include: condominiums; cooperative apartments; vacant lands, including unimproved real property upon which such dwellings are to be constructed; or commercial properties.” Therefore, all real estate licensees, not only those who deal with residential real property, must be sure to provide the Disclosure and must be aware of the New Fair Housing Regulations. Brokers must be sure to have these forms ready to be disseminated to prospective clients and consumers starting on June 20th.
Section 175.8(d) further requires that any real estate broker, licensed real estate salesperson, or licensed associate broker who provides the Disclosure must obtain and maintain a signed acknowledgment for no less than three (3) years. If the Disclosure is obtained electronically (i.e., by e-mail, text, electronic messaging system, or facsimile), then a copy of it must be maintained for no less than three (3) years as well. If a prospective client declines to sign the disclosure notice, a licensee must “…set forth under oath or affirmation a written declaration of the facts regarding when such notice was provided and shall maintain a copy of the declaration for not less than three years.” This is the same type of oath or affirmation that a real estate licensee is required to obtain when a prospective client refuses to deliver a New York State Disclosure under Section 443 of Article 12-A of the New York Real Property Law [see Section 443(3)(e) at https://bit.ly/2Asdlx5].
New Section 175.29: Posting of Fair Housing Laws in Every Office
Under Section175.29(a), a real estate broker must display a required notice (the “Fair Housing Notice”) at each office and branch office operated by the broker. A copy of the notice can be found on the Department of State website [see https://on.ny.gov/2xYZYDx]. The Fair Housing Notice contains the substantive provisions of the New York State Human Rights Law relative to housing accommodations. The Fair Housing Notice provides consumers with the information as to how to file a Human Rights complaint.
Subsection (b) requires that the Fair Housing Notice is “…prominently [emphasis added] displayed in the window of such office and any branch office maintained by such broker if [emphasis added] such broker also provides listings or other postings in the window of such location and must be visible to persons on that portion of the sidewalk adjacent to such office or branch office.” However, Subsection (b) goes on to state that “…[I]f any office or branch office is not accessible from the sidewalk or if postings are otherwise prohibited by any other applicable law…,” then the Fair Housing Notice must be posted in the same location where the business license is posted under Section 441-a of Article 12 of the Real Property Law [see https://bit.ly/3dJGdiF].
The Fair Housing Notice is Required to Be Posted on Websites
Section 175.29(c) requires the Fair Housing Notice is posted on “[a]ll websites created and maintained by real estate brokers, associate real estate brokers, real estate salespersons and any real estate team, as such term is defined by Section 175.25 of this title….” The Fair Housing Notice must be “prominently and conspicuously” displayed on the homepage of any website maintained by all licensees, including teams. A link to the Department of State’s Fair Housing Notice must be installed on the homepage and the link should be displayed “prominently,” not hidden or buried on the homepage.
The Fair Housing Notice Must be Displayed at All Open Houses
Section 175.29(d) further requires that all real estate licensees must display the Fair Housing Notice at all open houses. In addition, all licensees conducting an open house must ensure that the Disclosure required under Section 175.28 is made available for all attendees. Again, it is important to note that unless “first substantive contact” occurs, the Disclosure is not required to be given to all attendees, it just needs to be available for distribution.
New Section 177.9: Video Recording and Record Preservation
Required for Entities that Conduct Real Estate Instruction
A controversial part of the new regulations includes a requirement that all courses provided by entities approved by the Department of State must record all courses “…pertaining to fair housing and/or discrimination in the sale or rental of real property or an interest in real property…in its entirety.” Section 177.9(a) requires that both the video and audio be recorded. Subsection (b) requires that the recording be maintained for at least one (1) year after the course was provided to a student. However, “[I]f the entity knows or suspects that the recording is or will be the subject of litigation, then the approved entity shall maintain such recording as required by law.” The recording is subject to any audit of the Department of State.
Fair Housing Regulations Provide Additional Protections and Requirements
It is important for brokers, associate-brokers and licensed salespersons to focus on the requirements of the new Fair Housing Regulations. While it may be difficult to focus on these requirements with everything else that is occurring right now, June 20th will be upon us quickly. All licensees must begin implementing the changes required to be made to their websites and office procedures, so that the Disclosure and Fair Housing Notice are posted and ready to be delivered to their prospective clients as required under the new regulations. While many view the new regulations as burdensome, these regulations are issued with the primary objective of protecting the consumer from discrimination. Ultimately, it is the responsibility of real estate agents to promote fair housing and protect the consumer.