Legal responsibility and penalties, cease and desist zones, and nonsolicitation orders

Responsibility and remedies

New York real estate licensees must comply with fair housing law. A client's discriminatory instruction does not excuse discriminatory conduct. Brokers must supervise their salespersons' fair housing compliance.

Under Executive Law § 297, a finding of unlawful discrimination after a hearing can lead to an order stopping the practice, affirmative corrective action, compensatory damages, and punitive damages. In the administrative housing proceeding, punitive damages to the aggrieved person may not exceed $10,000. Compensatory damages address injury; punitive damages punish misconduct. Do not transfer that administrative punitive-damages cap to a court action.

Section 297 generally requires a choice between an administrative complaint and a court action, subject to exceptions such as specified administrative dismissals. In a housing case, any party may elect a civil court action within twenty days following a probable-cause determination; an attorney representing the Division of Human Rights is appointed to present the complaint, or the complainant's attorney may do so with the Division's consent.

Two solicitation controls

New York's Secretary of State establishes both controls under Real Property Law § 442-h. A cease and desist zone responds to intense, repeated solicitation. Within the defined zone, residential owners may file statements requesting no solicitation. The restriction protects an owner whose name appears on the current cease and desist list. It covers direct listing solicitation by brokers, salespersons, and others regularly engaged in buying and selling real estate, including telephone calls, mail, and personal contact. Mere residence in the zone does not replace list membership.

A nonsolicitation order addresses intense, repeated solicitation that has caused owners reasonably to fear declining values because people of different racial, ethnic, social, or religious backgrounds are moving into the area. After a public hearing and reasonable investigation, the Secretary may restrict solicitation of residential listings or sales throughout the defined area. Its operation does not depend on individual owners joining a cease and desist list. Read the order's terms to determine which solicitation methods it prohibits. Under 19 NYCRR § 178.4, properties on both sides of named boundary streets are included.

Duration and practice

A nonsolicitation order cannot be effective for more than five years, but may be readopted or amended through the required procedures. A cease and desist zone rule also lasts no longer than five years and may be readopted for additional periods of up to five years. Owner statements expire when the zone rule expires or is repealed.

Distinguish a geographic cease and desist zone from a Section 297 order directing a respondent to stop discrimination: they address different conduct through different mechanisms. Before prospecting, check the applicable order, geographic boundaries, and current owner list.