Judge halts ban on real estate ‘love letters’

Would-be homebuyers are still allowed to write personal letters to home sellers in Oregon. That’s after a federal judge granted a preliminary injunction against a law that bans them.

In 2021, Oregon became the first state in the nation to ban homebuyers from writing so-called “love letters” to sellers as a way of improving their chances of being selected to buy a house. HB 2550 prohibited letters, photographs, and any written communication outside “customary documents.”

Supporters of the law say that personal letters fuel housing discrimination because they can reveal a buyer’s race, religion, sexual orientation, or other protected class. But U.S. District Court Judge Marco A. Hernández concluded that the law “likely violates” a real estate agent’s First Amendment rights.

During the initial hearing, real estate agent Cheri Smith suggested HB 2550 would lead to angry and dissatisfied clients. The love letter practice, she said, allowed her clients to compete with higher offers, including those submitted by investors.

Smith also expressed concern that the law would lead to clients accusing her of not fulfilling her ethical and fiduciary duty to “disclose material facts known by the seller’s agent.”

In his opinion, Hernández recognized that evidence had been submitted showing love letters likely do enable discrimination and that sellers are influenced by those letters in determining which offer to select.

Hernández noted the “laudable goal” of the law, as evidence shows that “housing discrimination is an enduring societal problem.” However, he said the law was too broad, as it banned significant speech beyond references to a buyer’s personal characteristics.

Hernández further expressed the opinion that an alternative suggested by the plaintiff, one that required real estate agents to redact personal information, would be “a more precise tool to address the government’s interests.” The injunction will remain in effect until Hernández makes his final decision after discovery.

The suit against HB 2550 was filed by the Pacific Legal Foundation, on behalf of a Bend, Oregon-based real estate firm.