Elliman fair housing suit picks at agent confusion

Does lip service count as service? 

That’s the question at the center of a discrimination lawsuit that’s ensnared Douglas Elliman and nearly a dozen top real estate agents in New York City.

It’s also a question agents may be asking themselves about industry leaders, four years after a bombshell expose on housing discrimination on Long Island prompted executives from the city’s biggest residential firms to change the industry’s zeitgeist. 

The lawsuit filed in August by Shaniqua Newkirk, a Section 8 voucher holder, against Elliman and 30 of its past and present agents alleges the defendants violated discrimination statutes in the Fair Housing Act by ignoring her emails or by providing her with inadequate help.

Some agents, like Tamir Shemesh initially offered to help but ignored follow up inquiries from Newkirk, who identified herself immediately as a Section 8 client in all of her initial emails. Others, like Noble Black, told Newkirk they didn’t have any listings in her price range. Some agents expressed confusion about what Section 8 is and others ignored her outreach altogether. 

“We will be challenging the merits of these predatory and baseless claims,” a spokesperson for Elliman said in a statement on the lawsuit. “Douglas Elliman has a zero-tolerance policy towards unfair and illegal treatment of any individual or group. We pride ourselves on our mandatory agent training program that is inclusive of rigorous fair housing law education.”

Compass, Elliman, Brown Harris Stevens, Corcoran and Coldwell Banker Warburg hold regular training and/or discussions on fair housing, according to representatives for each brokerage, and agents are also required to take three hours of fair housing continuing education classes every two years. 

But confusion seems pervasive in the industry, despite firms overwhelmingly pledging a commitment to education four years ago. Comments on The Real Deal’s social media responding to news of the lawsuit took issue with the variety of responses the plaintiff included in the complaint. 

“Don’t agents have the ability to say hey, I work as a luxury agent, I do not do rentals … I do not service areas outside of where I choose?” said Steven Christie, an Elliman agent in New York. 

Dimitri Petrovsky, a Corcoran agent, expressed exasperation at the idea that luxury agents would have to respond to a client in another sector of the market. 

“I don’t get how these agents can be held liable for not working that sector,” he wrote. “If they had listings that fit the criteria and refused to show it to her that would be different. But how can you ask an agent who works luxury markets. This really sounds like a staged situation to go after big names.”

The list of defendants in the suit filed last month in federal court reads as a who’s who of New York City luxury agents, including several that have appeared in TRD’s rankings of the city’s residential brokers with tens, or hundreds, of millions in sales volume. 

“We aren’t allowed to specialize in certain areas or price points? We have to help every single person who comes to us anywhere in the state of New York in any price range because that’s where we are licensed?” Compass agent Christine Muldoon wrote. 

Normally, agents are free to choose their clients. But Section 8 holders are a protected class, meaning they cannot be denied service. Whether that occurred in Newkirk’s case remains to be decided, but generally speaking, luxury agents cannot ignore a Section 8 client.

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“In order to carry out the purpose of the anti-discrimination law, you need to have some extra checks and balances,” said attorney Daniel H. Kennedy, III. “While it probably isn’t going to seem fair to the average agent you talk to, it’s just necessary.”

Kennedy said brokerages are hesitant to beef up their training because doing so might blur the line between independent contractor and employee status for agents. But Neil Garfinkel, who works as broker counsel for REBNY, said brokerages can likely avoid that complication. 

“Brokerages have an obligation to supervise their agents,” he said. “They can’t demand that someone attend a training every week. But I believe fair housing is so important that if they require their agents to attend a fair housing course that they absolutely have the right to do that and it would not bleed over the line.”

This article has been updated with a statement from Douglas Elliman on the lawsuit.