Our Practice Areas Tell Us About Your Issue

Online postings on neighborhood racial composition bringing scrutiny

Some real estate websites are posting racial information of neighborhoods.

Potential commercial and residential real estate buyers are likely to ask a variety of questions before committing to a sale or lease. Data on neighborhood crime, property taxes and median property value of the neighborhood are standard questions relevant to a commercial or residential real estate deal.

But what about the ethnic, religious or racial composition of a neighborhood? Potential buyers and tenants have shown interest in such information in the past. Currently racial information at the neighborhood level is available on some brokerage websites or referral websites for agents.

Companies who offer such information online argue that it is already available to the public and so does not violate any federal law. Some civil rights groups disagree, however. In June, the National Fair Housing Alliance indicated it was investigating the practice and did not rule out filing a complaint to the Justice Department. The group has been responsible for several anti-discrimination legal actions in recent years, some of which have resulted in large settlements.

In 2009 the National Fair Housing Alliance threatened to bring a complaint to the Justice Department one real estate site that made the racial composition of a neighborhood available for individual listings. Once threatened, the site agreed to take down the information. However, it continued to provide the data for neighborhoods, just not individual listings.

A legal and ethical violation?

The National Association of Realtors prohibits in its ethics code volunteering information regarding the racial, religious or ethnic composition of a neighborhood. The Fair Housing Act has prohibited discrimination based on race or religion since it was passed nearly 50 years ago.

However, some sites have insisted that the practice does not violate any federal law and that the information is largely taken from U.S. Census Bureau data. Potential interested purchasers would be able to look up similar information without cost if they chose to do so. As such, posting racial information about a community online violates neither ethical standards nor the law, they argue.

Currently the law on the matter is unclear. Some online brokerages and real estate websites continue to provide community-level racial information.

Residential real estate must comply with all federal and local laws

There are myriad aspects to any real estate development deal. Land acquisition, zoning regulations and leasing agreements are only the tip of the iceberg when it comes to the need for understanding real estate law in Seattle and avoiding potential disputes.

Parties to any real estate development deal should contact an experienced real estate attorney to help advise them on their legal needs.

Keywords: Real estate, development, ethics,