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A lawsuit recently leveraged against Douglas Elliman and several of the brokerage’s top luxury agents and brokers reveals the lack of clarity that persists among real estate agents about fair housing laws and how they should be upheld.
The lawsuit filed by Shaniqua Newkirk in August claims that when Newkirk sent emails to several Douglas Elliman agents in the spring of 2021 to help her find Section 8 housing, agents either did not respond, declined or did not provide her with the help she needed, The Real Deal reported.
Newkirk, who is Black, initially reached out to a pool of agents in early spring 2021 to help her find a home with her housing voucher, but did not successfully find an agent. In June 2021, she came across a list of the most successful agents and brokers in New York City and proceeded to contact them for help in finding housing.
“Newkirk was unable to secure alternative housing prior to the expiration of her voucher,” the complaint says, and was “forced to remain in a decrepit rodent and vermin-infested apartment.”
Some of the top agents from Douglas Elliman’s roster in 2021 are featured in the lawsuit as agents Newkirk alleges failed to help her, including Noble Black, Holly Parker, Tamir Shemesh, Frances Katzen, Lauren Muss, and Tal and Oren Alexander. Other leading Douglas Elliman agents named include Elana Schoppmann, Diane Johnson, Eleanora Srugo, Ann Cutbill Lenane and Janna Raskopf.
In addition to the claims against these specific agents, the lawsuit alleges that the luxury brokerage violates city laws that require a link to the Fair Housing and Anti-Discrimination notice to be “prominently and conspicuously” displayed on the company’s homepage.
“Only at the very end of the homepage in tiny font under the heading of State Disclosures is a link to the Fair Housing and Anti-Discrimination Notice,” the lawsuit states. “Defendants are more concerned with their luxury brand than they are with following the law.”
Douglas Elliman has denied the allegations.
“We will be challenging the merits of these predatory and baseless claims,” a spokesperson told The Real Deal. “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.”
Social media responses reveal agent misconceptions
Despite Douglas Elliman’s claims about its rigorous fair housing education program, several agents responded to Newkirk’s inquiries in ways that indicated a severe knowledge gap about fair housing laws, according to the complaint.
“I only specialize in luxury real estate transactions and don’t even know what sec 8 means,” Madeline Hult Elghanayan wrote in correspondence to Newkirk.
Similarly, Diane Johnson’s final reply to Newkirk was, “I really don’t know what Sec 8 voucher is?”
Jennifer Kalish told Newkirk she didn’t “have any landlords or owners that are accepting Section 8. But I will keep you in mind if anything comes to mind.”
Several other agents did not respond to Newkirk’s inquiries at all. Others, like Tamir Shemesh, initially offered their services but ultimately stopped responding to her replies.
Fair housing attorney Craig Gurian told The Real Deal that, generally speaking, fair housing violations are determined by whether or not agents responded to Newkirk in the same way they typically would with other clients. Gurian also said it’s possible that those agents who said they didn’t have applicable apartments available or didn’t work in the market sector Newkirk was looking at could be charged with a violation for not referring her to a colleague who does work in those areas.
Responses to coverage of the lawsuit on social media also show that many agents lack a full understanding of fair housing laws and their obligations to follow them.
“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?'” Steven Christie, a Douglas Elliman agent, wrote in response to a Real Deal social media post about the lawsuit.
Corcoran agent Dimitri Petrovsky likewise expressed doubt that a luxury agent would need to be held accountable to serving a client in a market sector outside of their own.
“I don’t get how these agents can be held liable for not working that sector,” Petrovsky 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.”
In a typical scenario, real estate agents can choose what clients they work with. However, since Section 8 holders are a protected class, an agent cannot deny them their services, attorney Daniel H. Kennedy, III explained to The Real Deal. The court has not yet determined whether or not that happened in this specific case, but in general, a luxury agent is obligated to assist a Section 8 client.
Four years later, Newsday investigation findings reverberate
The lawsuit comes four years after an in-depth Newsday investigation revealed systemic discrimination against people of color who presented themselves as homebuyers to real estate agents on Long Island. Douglas Elliman agents, among several other brokerages’ agents, were identified in that investigation as committing fair housing violations.
The investigation ultimately triggered a state probe, which led to the subpoena of 67 agents and executives. In 2020, the state passed legislation allowing the government to revoke real estate licenses due to discrimination.
In March of this year, the city’s Department of Housing Preservation and Development announced an initiative to spend $3.1 million to fight income discrimination, where owners or brokers refuse tenants who want to pay for housing with vouchers or public assistance.
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