The lawsuit accuses brokerages and landlords of telling renters at risk of homelessness that their coupons will not be accepted.
A classified operation by a New York City watchdog group claims to have found a pervasive pattern of discrimination by brokers, agents and landlords against renters at risk of homelessness, a new lawsuit alleges.
The lawsuit, filed Wednesday by the nonprofit Housing Rights Initiative, alleges that more than 120 companies expressed disapproval of applications from certain at-risk tenants who were using government vouchers, or otherwise dissuaded those tenants from coming forward.
The lawsuit alleges that the practice violates law in the state and in New York City, where it is illegal to discriminate against tenants based on their use of a legal source of income.
“The defendants have explicitly and systematically refused to rent apartments to tenants who intend to pay rent with government rent assistance, and have refused to allow potential tenants receiving government rental assistance the opportunity to apply for apartments,” the group stated in its filing of the lawsuit.
The groups that have been sued include brokerage franchises of Douglas Elliman, eXp Realty, Coldwell Banker, RE/MAX and several other brokerage networks. They also include a group of real estate owners.
At the center of the legal battle is New York’s CityFHEPS (Family Homelessness and Eviction Prevention Supplement) program, which offers vouchers to people at risk of homelessness. The housing rights initiative’s stinging operation called in a number of agents and brokers, pretending to be renters who were trying to secure housing with these vouchers.
Many of the accounts described in the suit followed a similar pattern.
RE/MAX Edge, a Brooklyn-based brokerage, was one of the firms mentioned in the lawsuit.
The lawsuit says an undercover worker, posing as a potential tenant, inquired about a studio apartment listed at $1,700 a month. A RE/MAX Edge partner allegedly told the worker that the apartment was available.
He then asked the potential tenant if the landlord would accept the government voucher. The brokerage colleague responded that she would review the property owner.
In a later conversation, that related was allegedly retracted from his position. After speaking with the management company, the partner reportedly said the apartment would not be available at all.
“So you’re saying it won’t – that I won’t be able to use it here, then?” asked the worker.
“Yes, yes, because this is cooperation,” the brokerage partner replied, according to the filing.
Co-op housing, a co-ownership model for apartment communities in New York, has appeared more than a dozen times in the accounts. A customer allegedly told the group that the co-ops “do not take” vouchers. Another worker was asked to “stay away from co-operative societies” because “you cannot make coupons in a co-op.”
In an email to Inman, a RE/MAX spokesperson said that when an agent acts outside the law or the values of the franchise network, it expects franchisees to “immediately rectify the situation.”
Unlike the RE/MAX Edge franchise, the name of the national organization is not mentioned in the lawsuit.
“Our expectation from all RE/MAX agents is not just to meet the minimum requirements of applicable laws, regulations and ethical codes, but to aspire to levels of honesty and professionalism that go beyond the rest of the industry,” the company spokesperson said.
Coldwell Banker and eXp Realty spokespeople Thursday morning did not respond to a request for comment from Inman. They and Douglas Elliman were among the many real estate brands that had franchises in the lawsuit.
Douglas Elleman told Inman via email that the company does not comment on pending litigation.
If the Housing Rights Initiative wins the lawsuit, it asks the court to require real estate companies not to give tenants the impression that the voucher income will not be accepted by the landlord.
The group also requests that real estate companies be required to update their policies, train their staff, and establish testing systems to ensure compliance with this aspect of the Fair Housing Act.
Email Daniel Houston