Alabama's largest real estate company pays $100,000 for steering African-Americans

The largest real estate company in Alabama will no longer steer prospective African-American homeowners to homes in minority neighborhoods, under an agreement reached in May with the Justice Department, two private citizens, and a civil rights organization. Under the settlement agreement, the company will also pay $100,000 into a damages fund for discrimination victims who have or have not been identified.

The agreement, filed together with a complaint in U.S. District Court in Birmingham, resolves complaints that First Real Estate Corporation engaged in unlawful discriminatory conduct that violated the Fair Housing Act. Specifically, the complaint focused on the practice of racial steering. Real estate agents use steering to try and keep neighborhoods all-white or all-African-American.

Complaint alleged that realty company gave only minority clients to African-American agents

In the federal complaint, the Justice Department alleged that First Real Estate agents steered African-American clients toward predominantly minority neighborhoods while white clients were directed to white neighborhoods. The Justice Department also alleged that First Real Estate steered potential customers to company sales agents based on race, and that they advertised properties located in areas with a high minority population differently than properties in other areas.

Under the settlement agreement, First Real Estate Corporation will:

  • establish a $100,000 fund to compensate persons whom agents may have injured because of the company's alleged discriminatory practices;
  • assign customers to agents without regard to race;
  • modify its advertising so the availability of homes that it has listed for sale is provided to everyone;
  • educate agents and employees of their responsibilities under the Fair Housing Act; and,
  • not consider the race of a prospective homeowner and neighborhood in deciding where to show a home.

First Real Estate also has agreed to promote fair housing in the Birmingham metropolitan area by sponsoring clinics for prospective home buyers and by developing a marketing plan to promote all communities in the metropolitan area as open to all races and nationalities.

Former agents sued real estate company

The Justice Department first became involved in the case after learning about a private civil suit filed in November 1995 by two African-American former sales agents. The agents asserted that the company only referred African-American customers to them and discouraged them from showing homes in white areas.

In December 1997, the Fair Housing Center of Northern Alabama, a private organization, sued raising similar allegations. The Center will assist First Real Estate to promote fair housing in Birmingham. The May settlement resolves the private suits and the Justice Department suit.

Agreement should serve as model for real estate agents in Birmingham and the U.S.

"We are pleased that First Real Estate has chosen to work cooperatively with the United States and the private plaintiffs to assure that the guarantees of the Fair Housing Act are a fact of life in our community," said G. Douglas Jones, the U.S. Attorney in Birmingham. "The decree should serve as a model for all Realtors."

Joan Magagna, Acting Chief of the Housing Section of the Civil Rights Division, agreed. "The Justice Department is firmly committed to making fair housing a reality for all Americans," Magagna said. "No one should ever be denied the right to live where they choose simply because of the color of their skin."

The monetary fund will be paid to victims identified through a claims process conducted by the Justice Department and the private plaintiffs.

Details about this and other Department of Justice fair housing cases are available in the DOJ web site at http://www.usdoj.gov.