Can Landlords Be Held Responsible for Broker’s Source of Income Discrimination Against Prospects?

In cities and states where source of income is protected under local fair housing laws, the answer is yes.

Consider what happened recently to a landlord and its broker in New York City, where the local Human Rights Law bans housing discrimination based on lawful source of income. A prospective tenant, who was eligible for housing vouchers through a NYC HIV/AIDS Services Administration program, applied to rent an apartment. In response, the landlord’s real estate agent advised the applicant via email that, to the best of her knowledge, “the building is not approved to receive any housing assistance vouchers.”

The applicant then sued the landlord and its agent for housing discrimination under NYC’s Human Rights Law provision against housing discrimination based on source of income. The tenant’s complaint didn’t state that landlord itself engaged in discriminatory conduct but that it was “vicariously liable for the discriminatory acts” of the real estate agent.

The court denied the landlord's request to dismiss the complaint against it, finding that the complaint sufficiently alleged a cause of action because the real estate agent acted as its agent. The landlord then sought to reargue the court’s decision. The court again ruled against it, finding that NYC Admin. Code Section 8-107(5)(a) applied to owners or any agents of the owners.

The court stated that it was well established that, under common law, principals may be held vicariously liable in tort for the acts of their agents acting within the scope of their authority. An action based on housing discrimination was in effect a tort action and ordinary tort-related vicarious liability rules applied [Newson v. Vivaldi Real Estate Ltd., Index No. 452625/2022, 2023 NY Slip Op 34507(U)(Sup. Ct. NY; 12/21/23)].