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Lawsuit filed over Oregon's home buyer 'love letter' ban

Oregon banned potential home buyers from including "love letters" to persuade a seller to choose their offer. A lawsuit claims that's a violation of free speech.

PORTLAND, Ore. — A real estate company in Oregon is filing a lawsuit over the state's ban on so-called home buyer "love letters," claiming that the ban illegally censors free speech.

Potential buyers have long included these letters with their home offers to describe themselves, their family and how they intend to use the home they're interested in, as a means to persuade the seller to choose them over other qualified offers.

The first-in-the-nation ban on home buyer love letters was passed in Oregon last year. Lawmakers in favor claimed the letters could reveal personal information about the prospective buyer that may open the door to discrimination.

"While this may seem harmless, these letters can actually pose fair housing risks because they often contain personal information and reveal characteristics of the buyer, such as race, religion, or familial status, which could then be used, knowingly or through unconscious bias, as an unlawful basis for a seller’s decision to accept or reject an offer," the National Association of Realtors wrote on its Fair Housing blog in October 2020. 

The Association put out guidance discouraging agents from accepting love letters from buyers last year, but the practice remains popular nationwide. 

On Friday, Total Real Estate Group, a boutique real estate firm with locations in Bend and Portland, filed a lawsuit against Oregon State Real Estate Commissioner Steven Strode and Oregon Attorney General Ellen Rosenblum, claiming that the love letter ban is a violation of free speech. The lawsuit claims the law is based on speculation and that no cases of discrimination based on such letters have been documented.

RELATED: Oregon bans home buyer 'love letters'

"Nothing in the legislative record indicates that sellers frequently or ever rely on information discovered in a love letter as a basis for discriminating against someone based on a protected class. The Legislature could not point to a single Fair Housing claim arising from a love letter, and the NAR is unaware of any such claims arising from this standard practice," the lawsuit says. 

Daniel Ortner, an attorney with Pacific Legal Group, who filed the lawsuit, said the ban unfairly targets first-time homebuyers and others who may have trouble competing in a tight housing market. 

"A lot of sellers want to make sure that their house is used and loved by someone who buys it, they don't care just about the dollars and cents," he said. "They care about the emotional aspect of selling the house they've lived in for years. They don't want to sell to an investment firm that's going to rent the house out or use it for an Airbnb, they want to sell it to someone who's going to live in the house."

Supporters of the ban say that a seller's decision should come down to the terms of the offer only. But in the lawsuit, Pacific Legal Group argues that buying a home is an inherently emotional process.

"The State of Oregon [is] rendering this financially and emotionally significant decision into an impersonal process little different from purchasing groceries at the self-checkout machine," the lawsuit claims.

KGW News reached out to Steven Strode, the Oregon Real Estate Commissioner, who was named as a defendant in the lawsuit. His office said they could not comment on pending litigation.

Editor's note: The video above originally aired in July 2020. 

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