How to protect your office from discrimination claims.

As the cost of housing has risen, so have claims of racial discrimination against the real estate industry. These claims are easy to allege and difficult to defend.

To avoid the expense, business interruption, and adverse publicity of a discrimination claim, realtors must assess their personnel, their policies, and their practices to determine how much risk they face for such a claim. Realtors should also consider getting insurance to protect their offices.

We endorse a two-pronged approach to prevent discrimination: training and establishing office procedures. The first step is to make sure that the salespersons of a real estate office do not consciously or otherwise engage in discriminatory practices.

Engage in additional training. As part of their education to obtain their licenses, brokers and salespersons are trained in fair housing requirements. Encourage additional training on an annual or semi-annual basis. Such training may be obtained from a local board of realtors or from not-for-profit fair housing organizations which, incidentally, are known to conduct surreptitious testing of real estate agencies and initiate claims when they find what they believe to be discriminatory acts.

Have a written anti-discrimination policy. The written policy should be clear and up to date with severe consequences spelled out for anyone who violates the policy. Each salesperson should sign a statement indicating that he or she has received the policy and read it and will abide by it.

Screen job applicants carefully and check references. An initial test on knowledge of the fair housing laws is appropriate during a job interview.

Self Testing Programs. Self testing programs are an excellent way to determine if any realtors are acting in a manner that could be construed as discriminatory. In such a program, a realtor or group of realtors would use minority testers and white testers to surreptitiously make inquires of the realtor about the availability of housing to determine if the realtors were acting in a discriminatory way.

The results of such testing are privileged under federal law but there is no commensurate privilege granted under state law. To be sure that the self testing is done properly include control testing which would ensure that testing methodology reflects a true discriminatory practice and not just variations in market conditions or salesperson knowledge or schedule. These tests will help to determine if improper practices are taking place and to correct them before they result in a claim. If the test finds there were no discriminatory practices, the results could be highlighted and even given to the media to establish that the office does not engage in discriminatory practices in the event a claim of discrimination is asserted with attendant publicity.

Maintain written records. Keep a log of all calls received and all client visits. These logs should include return calls, names of the callers/ applicants, and the subject discussed. Even if no dwellings are available to show the applicant, keep a record of the salesperson and the date and time of the inquiry and why nothing could be shown at that time. It's also a good idea to keep records of dwellings shown to applicants indexed by community. This would help to avoid steering claims and to establish the spectrum of applicants who were shown particular types of properties on a per community basis.

Complete Initial Applications. Fill out applications during the initial client visits. Include employment and income information to qualify that candidate for a particular type of housing. Applications may even be completed over the telephone. Note the date and time of day as well as the salesperson. Those factors, and the timing of the calls to show market conditions or salesperson knowledge or availability, can be used as reasons why two callers may have received different responses to the same inquiries.

Refuse To Do Business With Discriminators. If any landlord or owner explicitly or implicitly asks or suggests that a realtor screen out protected categories of applicants, the realtor should immediately drop that assignment and report that owner or landlord to HUD, the state or local Division of Human Rights, or the local not-for-profit fair housing organization.

What To Do If A Claim Is Made If a claim of discrimination is made against a realtor, immediately investigate and gather as much evidence as possible to refute the claim. If the realtor has insurance for such a claim, notify the insurance company immediately. If the realtor does not have insurance, find an attorney with experience in defending claims of this nature.

The attorney will guide the realtor through the defense and analysis process of gathering information, interviewing witnesses, and putting together a strategy to respond to the claim. The attorney can also help determine the best way to resolve the claim.

There may be options outside of a hearing or trial for a non-monetary disposition of the claim or for settlement for a small amount of compensation. The terms of settlement could include no admission of liability and provide for confidentiality and non-disclosure of the terms of settlement.

With proper training, testing, policies, and record keeping in place, the realtor can greatly decrease the chances of being accused of engaging in discriminatory practices.

Even if discrimination claims are made, these tips can be essential in successfully defeating such a claim.

Peter Contini

L'Abbate, Balkan Colavita & Contini