Agent and Broker included in $100 Million Discrimination Suit and Department of Justice Action

In January 2010, Chicago native and comedian George Willborn and his wife made a $1.7 million offer on the 5-bedroom home, which the Sellers accepted. However, the Sellers subsequently refused to sign the sales contract after learning the Buyers were African-American. The residence was a 5,000-8,000 square-foot home which had been listed for $1.799 million and had been on the market for two years. The home was taken off the market after the Buyers made a $1.7 million offer–the highest offer received on the property.

Initially, the U.S. Department of Housing and Urban Development (HUD) announced charges of discrimination against the Sellers and their agent after a complaint was filed by Willborn. HUD investigators were told the Sellers “expressed a preference not to sell his home to an African-American.” After Willborn filed a complaint with HUD, the Sellers’ agent contacted him and offered to sell the home, with all its furniture, for $1.799 million. Two months later in March 2010, the home was re-listed at that price. The home remained on the market for more than two years thereafter.

The Justice Department eventually resolved the HUD complaint with the Agent and his Broker, who agreed to pay $30,000 to the Buyer’s real estate agent, despite neither admitting to any wrongdoing. Also, the Agent was required to take an educational program related to the Fair Housing Act, and the Broker agreed to provide a copy of the consent order to all its current real estate agents and to any new agents who joined the company within the next three years.

After two years of litigation, all parties settled the civil suit. The Sellers were required to contribute toward the commission to the Buyers’ agent and are being monitored by federal authorities for three years. Additional terms of the settlement were not disclosed. While it may seem crazy that in this day and age this type of behavior still occurs, real estate agents should be aware that they can find themselves in the midst of litigation when clients display this type of bias.

PRACTICE POINTER:  Real Estate Attorney Lee Drizin reminds Licensees to remember that the Fair Housing Act prevents: (a) refusing to rent or sell a dwelling, refusing or failing to provide or offer information about a dwelling, refusing to negotiate for the rental or sale of a dwelling, or otherwise making unavailable or denying a dwelling to any person because of race or color; (b) discriminating against any person in the terms, conditions, or privileges of the rental or sale of a dwelling, or in the provision of services or facilities in connection therewith, because of race or color; (c) making any statement, oral or written, in connection with the rental or sale of a dwelling, that expresses or indicates any preference, limitation, or discrimination, or an intent to make any such preference, limitation, or discrimination, on the basis of race or color; and (d) representing to persons because of race or color that any dwelling is not available for inspection, rent, or sale when such dwelling is, in fact, so available.

Drizin Law is providing this information for educational purposes only. It should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. This information is based on general principles of Nevada law at the time it was created and you should be aware laws frequently change. Moreover, the laws affecting you may differ depending on the circumstances. You should consult with a qualified attorney in your own state or jurisdiction concerning your particular situation. Review of this information does not create an attorney-client relationship.