The state of Oregon grabbed national attention last year for passing a law to ban “love letters” sent from potential homebuyer to homeseller, and often intermediated through real estate agents. These missives, lawmakers contended, make emotional appeals to homesellers, and are a minefield for Fair Housing Act violations.
But on Thursday, Marco Hernandez, a federal judge based in Oregon, ruled that the new law violates the free speech rights of real estate agents. In a highly nuanced, 29-page written order, the judge voided a law that went into effect Jan. 1.
Ultimately, the judge found that Oregon’s ban “of all non-customary documents” sent from prospective buyer to seller in a real estate sale is a “broad sweep” that will have the effect of banning “other innocuous information prospective buyers provide in love letters.” This ban, the judge added, specially restricts the speech of agents, who, in practice, write or at least edit the letters in question.
The decision is a victory for Total Real Estate Group, a self-described “progressive mid-size boutique real estate firm” with locations in Portland and Bend, Oregon, and Pacific Legal Foundation, a libertarian organization whose lawyers brought the case.
Pacific Legal Foundation attorney Daniel Ortner called the order a major free speech victory. “The state cannot ban important speech because someone might misuse it,” Ortner said in a statement. “Oregon’s overly broad speech restriction is clearly not justified.”
Meanwhile, it’s back to the drawing board for Oregon legislators and the Oregon Real Estate Agency, the state body in charge of enforcing the law and the named defendant in the case.
The agency declined to opine on the ruling, but a spokesperson did provide a statement, noting, “The Oregon Real Estate Agency will not enforce HB 2550 unless a further court order allows the law to go into effect.”
Indeed, the judge’s opinion is a preliminary injunction, which means a final judgment has not been made in the case.
Despite the ruling, much of Hernandez’s order parrots arguments from the state legislature. For example, the judge begins his opinion discussing Oregon’s notoriously racist past, noting the state’s “long and abhorrent history of racial discrimination in property ownership and housing,” particularly against Chinese immigrants and Black people.
The judge then directly ties that history into the letters that homebuyers send to get the attention of sellers. An expert witness for the state, the judge noted, found that 93% of all letters disclosed the potential buyer’s, “race, color, religion, sex, sexual orientation, national origin, marital status, familial status, or disability.” Factoring in any of those identifications in a real estate sale defies the Fair Housing Act.
While the state may not present direct evidence that letters sent by homebuyers produce discrimination, “significant cicrumtantial evidence supports defendant’s stated interest,” the judge said.
So, why rule for Total Real Estate Group?
Hernandez rules that the legislation, House Bill 2550, is too broad and is not “tailored” to specifically solve the problem of letters that perpetuate discrimination.
“Some examples from the love letters in evidence are as follows,” the judge wrote, “To express a desire to live permanently in the area, to explain unusual provisions of the offer, to discuss a love of gardening and how the home is well-suited for the growing of plants, to admire the architectural style of the home, and to explain why a certain repair is important to the prospective buyer.”
A law that may eliminate these communications goes too far, the judge ruled.
Like Hernandez, real estate agents have expressed a mix of views on love letters, and the potential prohibition. Beyond the question of discrimination, many complain love letters are a hassle to both give and recieve. What most agents do agree on is that these correspondence are often part of a real estate sale, especially in a high-demand market.
“Many agents,” Teri Pacitto, an agent at Sotheby’s Realty in Westlake Village, California, told HousingWire in June, “see the need to write these letters that are based on personal reasons and are emotionally driven in order to get the seller to consider their offer over the others.”
