REAL ESTATE - CIVIL RIGHTS - ACCEPTANCE OF REAL ESTATE LISTINGS FROM PROPERTY OWNERS WHO MAY DESIRE TO DISCRIMINATE.
(1) Under the provisions of the nondiscrimination amendment to RCW 18.85.230 (relating to the suspension, revocation or denial of real estate licenses), as enacted by the 1967 legislature, a real estate broker or salesman may receive a listing from a property owner even though the owner indicates that he desires to discriminate in the sale of his property, so long as the listing agreement does not prevent the broker or salesman from rendering all services contemplated by the listing to prospective purchasers of the property without discrimination because of race, color, creed or national origin.
(2) A real estate broker or salesman is free to inquire of the owner of property previous to accepting a listing as to whether or not the owner desires to discriminate in the sale of the property.
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April 14, 1967
Honorable Wesley C. Uhlman
State Senator, 32nd District
Cite as: AGO 1967 No. 14
By letter previously acknowledged you have requested an opinion of this office on two questions regarding the activities of real estate brokers and salesmen in connection with the nondiscrimination amendment to RCW 18.85.230, which was enacted by the 1967 legislature. Your questions are as follows:
(1) "May a broker or salesman receive a listing from the owner of real estate when the owner indicates that he desires to discriminate in the sale of the property?"
(2) "Is a broker or salesman free to inquire of the owner of the property previous to listing whether or not the owner desires to discriminate in the sale of the property?"
[[Orig. Op. Page 2]]
We answer both questions in the affirmative, subject to certain qualifications set forth in our analysis.
RCW 18.85.230 provides that the state director having responsibility for licensing of real estate brokers and salesmen1/ may temporarily suspend or permanently revoke or deny the license of any broker, associate broker or salesman who is guilty of any of the various acts of misconduct specified therein. Prior to the enactment of chapter 22, Laws of 1967, the statute contained a total of seventeen separate grounds for suspension, revocation or denial of such licenses.
By § 3, chapter 22, Laws of 1967, the legislature has provided the following additional ground for suspension, revocation or denial of a license:
"(18) Discriminating against any person or persons because of race, creed, color or national origin while acting in the capacity of a real estate broker, associate real estate broker, or real estate salesman: PROVIDED, That prior to taking any action to suspend, revoke or deny the license of any broker or salesman upon grounds specified in this subsection, the director shall issue an order to any such broker or salesman to cease and desist in such act or practice of discrimination and upon receipt of an assurance in writing of discontinuance thereof shall take no further action to suspend, revoke or deny the license of such broker or salesman unless within six months thereafter such broker or salesman engages in a further act or practice of discrimination. Such assurance of discontinuance shall not be considered an admission of a violation for any purpose."
Your opinion request, in effect, raises the question of whether the particular types of conduct which you have specified would constitute grounds for suspension, revocation or denial of a real estate broker's or salesman's license under this 1967 amendment. However, before proceeding to answer your precise questions, we believe certain preliminary remarks are in order.
[[Orig. Op. Page 3]]
As we understand it, a real estate listing is, in essence, an agreement whereby a property owner promises to pay a real estate broker or salesman a commission in return for procurement by the broker or salesman of a person ready, willing and able to purchase the property on terms acceptable to the owner. See, Dryden v. Vincent D. Miller, Inc., 56 Wn.2d 657, 354 P.2d 900 (1960), and cases cited therein. However, it is notable that real estate brokers and their salesmen have been traditionally classified as special agents, having only the limited authority to find a purchaser for the property that their principals have listed for sale. Accordingly, a broker or salesman, under the ordinary real estate listing agreement, does not have the authority to sell or execute a contract of sale on behalf of the property owner; rather, he has only the limited authority to procure a purchaser.2/ Thus, under ordinary circumstances, the property owner cannot be bound to sell his property by a contract executed on his behalf by a broker or salesman, even though the broker or salesman has procured a buyer who is ready, willing and able to purchase the property. Accord,Carstens v. McReavy, 1 Wash. 359, 25 Pac. 465 (1890);Sylliaasen v. Hanson, 48 Wash. 608, 94 Pac. 187 (1908); Hardinger v. Columbia, 50 Wash. 405, 97 Pac. 445 (1908);Hutchins v. Wertheimer, 51 Wash. 539, 99 Pac. 577 (1909);Pacific Mutual Life Insurance Company of California v. Munson, 115 Wash. 119, 196 Pac. 633 (1921); Larson v. Bear, 38 Wn.2d 485, 230 P.2d 610 (1951). Mechem's Outlines of the Law of Agency, 4th Ed., § 563, p. 390; Restatement of the Law, Agency 2d,§ 53, p. 157.3/
A second point to be preliminarily noted is that the nondiscrimination amendment, subsection (18) of § 3, chapter 22, Laws of 1967,supra, is expressly limited in application to situations involving a licensee ". . . while acting in the capacity of a real estate broker, associate real estate broker, or real estate salesman: . . ." RCW 18.85.010 contains [[Orig. Op. Page 4]] the following definitions of these particular terms:
"(1) 'Real estate broker,' or 'broker,' means a natural or artificial person, acting independently, who for commissions or other compensation, engages in the purchase, sale, exchange, rental, or negotiation therefor, of real estate, or interests therein, and for business opportunities or interest therein, belonging to others, or holds himself out to the public as being so engaged;
"(2) 'Real estate salesman' or 'salesman' means any natural person who represents a real estate broker in any of his activities;
"(3) An 'associate real estate broker' is a person who has qualified as a 'real estate broker' who works with a designated broker and whose license states that he is associated with a designated broker;"
Accordingly, it is to be seen that a licensee, when in the performance of any of the acts falling within these statutory definitions, would be acting in the capacity of a real estate broker, associate broker, or real estate salesman.
With this orientation we may now consider your first question, which is:
"May a broker or salesman receive a listing from the owner of real estate when the owner indicates that he desires to discriminate in the sale of the property?"
From our preliminary discussion it can readily be seen that a real estate broker or salesman, when performing services pursuant to an ordinary real estate listing, is acting in the capacity of a real estate broker, associate broker, or real estate salesman. Thus, it follows that under the nondiscrimination amendment, the broker or salesman is required, at the risk of loss of his license, to perform such services as are contemplated by the particular listing without discrimination against any person because of that person's race, creed, color or national origin. If he does so, he will, in our opinion, have met and performed the obligations imposed upon him by the legislature even though he may have failed to obtain a buyer acceptable to the property owner.
[[Orig. Op. Page 5]]
This view, it is to be noted, is in accordance with a recent decision of the California supreme court in a case construing the Unruh Civil Rights Act (Cal. Civ. Code, § 51). The law, which had been held in companion cases to apply to real estate brokers,4/ provides in pertinent part:
"All persons within the jurisdiction of this State are free and equal, and no matter what their race, color, religion, ancestry, or national origin are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever."
InVargas v. Hampson, 57 Cal.2d 479, 370 P.2d 322 (1962), the California court considered a case wherein plaintiffs, who were of Mexican ancestry, alleged that the defendant real estate broker had taken a cash deposit for them for the purchase of a home in a tract development, but had subsequently returned the money and refused to close the transaction because of the plaintiff's racial characteristics. The trial court had sustained a demurrer to the complaint on the basis that it could not be determined from the complaint whether the plaintiffs were "complaining of defendant's actions solely as they relate to the conducting of his own business or whether they are complaining of defendant's actions as the agent of third parties."
The supreme court, in affirming the trial court, declared:
". . . In some circumstances, of course, both a broker and an owner may be guilty of discrimination, but a broker who in good faith does all within his power to serve a member of a racial minority is not liable if the broker's failure to complete the transaction is due solely to the owner's refusal to sell because of the buyer's race or color." (Emphasis supplied)
An apparent corollary of this principle, it would seem, would be that where a broker or salesman commits an act of discrimination which constitutes grounds for suspension, revocation or denial of his license under the 1967 nondiscrimination [[Orig. Op. Page 6]] amendment, he will not be able to avoid loss of his license (pursuant to the procedures set forth in the amendment) solely by showing that his act of discrimination was committed at the direction of the property owner. In this connection, it must be assumed that the legislature, in enacting the nondiscrimination amendment, was aware that it is the function of a real estate broker or salesman to represent property owners in their real estate dealings. Thus, it must be concluded that the legislature intended to impose certain limitations on the conduct of the broker or salesman in their relations with persons of all races, creeds, colors or national origins, without regard to what desires may be expressed by the property owner in regard to such matters.
However, the precise issue raised by your first question is simply whether a real estate broker or salesman may accept a listing, or act pursuant thereto, where the property owner has placed no restriction upon the conduct of the broker or salesman, but has simply indicated that he desires to discriminate in his decision as to whether to sell or execute a contract of sale. We believe that he may.
In considering this question in the light of the provisions contained in subsection (18), § 3, chapter 22, Laws of 1967, supra, our fundamental purpose is to ascertain, if possible, and give effect to, the intention of the legislature. In seeking this intent, first resort must be made to the language used by the legislature because the intention of the lawmakers is to be deduced, if possible, primarily from what is said in the statute under consideration. See,In re Kurtzman's Estate, 65 Wn.2d 260, 396 P.2d 786 (1964); Martin v. Aleinikoff, 63 Wn.2d 842, 389 P.2d 422 (1964); andLynch v. Dept. Labor & Industries, 19 Wn.2d 802, 145 P.2d 265 (1944).
However, where, as in the case of the nondiscrimination amendment before us, the intention of the legislature is not entirely apparent from the express language of the law, other aids to statutory construction must be used. One well-established rule of statutory construction is that, in a case such as this, resort may be had to the history of the passage of the law under consideration. The applicable rule was enunciated by our court in Lynch v. Dept. Labor & Industries, supra, as follows:
"It is a rule of statutory construction that resort may be had to the history of the passage of a law under consideration. State ex rel. Griffin v. Superior Court, 70 Wash. 545, 127 Pac. 120; State ex rel. Northwest Airlines, Inc. v. Hoover, 200 [[Orig. Op. Page 7]] Wash. 277, 93 P. (2d) 346; Shelton Hotel Co. v. Bates, 4 Wn. (2d) 498, 104 P. (2d) 478; Ayers v. Tacoma, 6 Wn. (2d) 545, 108 P. (2d) 348; Crawford, Statutory Construction 383, § 216; 2 Sutherland, Statutory Construction (3d ed.) chapter 50, p. 481.
"In fact, from the record before this court, the 'legislative intent' becomes clearly evident from the history of the passage of the law under consideration, andto disregard that history would be to ignore the above expressed principle that legislative intent is the paramount factor in construing a law." (Emphasis supplied)
See also,Procter & Gamble Co. v. King County, 9 Wn.2d 655, 115 P.2d 962 (1941); and, for two of the more recent cases wherein the court examined the legislative history of an act in order to ascertain and thereby give effect to legislative intent, see Nostrand v. Balmer, 53 Wn.2d 460, 335 P.2d 10 (1959); State ex rel. Blume v. Yelle, 52 Wn.2d 158, 324 P.2d 247 (1958).
Our research of the history of the nondiscrimination amendment to RCW 18.85.230 reveals that on January 24, 1967, there was introduced in the House of Representatives a bill designated House Bill 426. The primary sponsor of this bill was Representative Sam Smith. In its original form, the bill proposed adding an additional subsection (18) to RCW 18.85.230, to read as follows:
"(18) Discriminating against any person or persons because of race, creed, color or national origin while acting in the capacity of a real estate broker, associate real estate broker, or real estate salesman; or, while so acting, soliciting, offering, accepting or retaining a listing of real property for sale, rental, lease or exchange with the understanding that persons may be discriminated against in connection therewith because of race, creed, color or national origin." (Emphasis supplied)
Thus, in its original form, House Bill 426 seemingly would have made it a ground for suspension or revocation of a license for a broker or salesman simply to accept or retain a listing of real property for sale with the understanding that persons may be discriminated against in connection therewith because of their race, creed, color or national origin. However, on February 28, 1967, in response to an amendment proposed by Representative Merrill, the House of [[Orig. Op. Page 8]] Representatives struck, in its entirety, the portion of the proposed amendment which we have above underscored.
Thereafter, House Bill 426 proceeded into the House Rules Committee, from whence it never returned. Then, during the first week of March, there arrived in the House a bill, designated Senate Bill 378, which had just been passed by the Senate. This bill contained a number of amendments to various sections of chapter 18.85 RCW. On March 7, Representative Sam Smith submitted, for consideration by the House, a proposed amendment to Senate Bill 378 which, in precisely the form proposed, was adopted and became § 3, chapter 22, Laws of 1967, supra. Notably, this amendment, insofar as the specification of additional grounds for license suspension or revocation was concerned, was identical to House Bill 426 as it read following the adoption of Representative Merrill's amendment on February 28, 1967.5/
In connection with his proposed amendment to Senate Bill 378, Representative Smith was questioned at some length by Representative Chapin during a colloquy occurring on the floor of the House on March 9, 1967. Because of its pertinence to the issue here under examination, particularly in the light of the preceding events as above related, we believe it appropriate to set forth the full text of this discussion, as extracted from the transcript of the Journal of the House of Representatives for March 9, 1967, as follows:
"YIELDING TO QUESTION
"At the request of Mr. Chapin, Mr. Smith yielded to question.
"'Mr. Smith, I don't have a copy, and I don't think any of us do, in my Senate book of this amendment. I would like to ask you this. Am I correct or not in my understanding that under your amendment, if a home owner directs an agent that he does not desire to show his home to any particular group, then if the agent goes along with those wishes, he is not in violation?'
"'Let me explain it this way. Under the amendment, a real estate broker has to [[Orig. Op. Page 9]] communicate all offers to the owner. The owner makes the decision whether or not to sell. If the owner does not want to sell, all well and good; he has discharged his duty. But the real estate broker himself may not discriminate.'
"'You haven't answered my question. Under your amendment, if I am a home owner and I go to a realtor and say, "I want you to sell my house, but I don't want you to show my house and I am not interested in selling my house to a particular group," and as a result he doesn't show it to a particular person that comes along and would otherwise like to see the house, is he in violation?'
"'Under this law, the real estate broker should tell the owner, "The law requires me to communicate any offer to you or to show it to anyone. It is up to you [whether] to accept the offer." That is all he has to do to discharge his duty. He doesn't have to go any further.'"
Immediately following this colloquy, the House of Representatives enacted Senate Bill 378, as amended, and returned it to the Senate, which, in turn, concurred in the bill as amended and sent it on to the Governor. The bill was signed into law by the Governor on March 10, 1967.
In the light of this historical background to the legislature's enactment of the nondiscrimination amendment contained in chapter 22, Laws of 1967, it seems fairly apparent that the legislature had no intention to bar a real estate broker or salesman from receiving a listing from the owner of real estate simply on the basis of the owner's indication that he desired to discriminate in the sale of his property. Having originally been presented with a bill which apparently would have provided such a barrier, the House of Representatives rejected the bill in that form and, ultimately, passed the nondiscrimination amendment in a form which, so far as is pertinent, was identical to the earlier bill following the [[Orig. Op. Page 10]] deletion therefrom of the sanction against accepting a real estate listing ". . . with the understanding that persons may be discriminated against in connection therewith because of race, creed, color or national origin."
Accordingly, on the basis of the analysis and the reasoning set forth above, we answer your first question as follows:
A real estate broker or salesman may receive a listing from a property owner even though the owner indicates that he desires to discriminate in the sale of his property, so long as the listing agreement does not prevent the broker or salesman from rendering all services contemplated by the listing to prospective purchasers of the property without discrimination because of race, color, creed or national origin.6/
We believe that this conclusion is not only supported by the analysis and reasoning set forth above, but further, that it is consistent with the essential purpose of any nondiscrimination statute pertaining to residential housing. The evident purpose of such legislation is to enlarge the opportunities for minority groups to obtain better housing. Since a substantial percentage of all property sales are processed through real estate agencies in our state, it would logically follow that a statute directed against discrimination by persons and firms in the real estate business should be an effective means of enlarging housing opportunities for members of minority groups. In other words, the imposition of a sanction on discrimination by real estate brokers and salesmen should have the result of increasing the availability of real estate agency services to all who are qualified purchasers, notwithstanding the race, color, creed or national origin of the particular person. Although the availability of such services does not guarantee to the prospective purchasers a right to buy, it should at least broaden channels for negotiation. An interpretation of the nondiscrimination amendment which would prevent real estate brokers or salesmen from even receiving listings, in cases where the property owner has indicated a desire to discriminate, might very well defeat the above described purpose of the statute. The result of such an interpretation might well be a drop in the employment of real estate brokers and salesmen by those property owners who desire to discriminate in the sale of their properties. Thus, instead of enhancing the opportunities of members of minority groups to obtain better residential housing, such an interpretation of the statute might instead work to defeat this objective.
[[Orig. Op. Page 11]]
We turn now to your second question which, repeated for ease of reference, is:
"Is a broker or salesman free to inquire of the owner of the property previous to a listing whether or not the owner desires to discriminate in the sale of the property?"
Again, we would remind that the nondiscrimination amendment is merely a provision adding discriminatory conduct by real estate brokers and salesmen to the previously existing grounds for suspension, revocation or denial of their licenses. It is quite apparent that the act of inquiring of the owner of property as to his intentions, in regard to discrimination, would not, in and of itself, constitute an act of discrimination in violation of the amendment. In fact, we can conceive of certain circumstances whereunder such an inquiry would probably be advisable. Manifestly, the ultimate goal of a real estate broker or salesman is to sell property. It would therefore seem a legitimate concern to the broker or salesman to know whether the property owner seeking to utilize the broker's or salesman's services is going to be willing to sell his property to a member of a minority group.
In short, the propriety of an inquiry such as is specified in your second question lies in the reason for the inquiry. However, the legal answer to your second question must be that the real estate broker or salesman is free to inquire of the owner of the property, previous to accepting a listing, as to whether or not the owner desires to discriminate in the sale of the property. The mere act of asking such a question could not, in our opinion, constitute an act of discrimination justifying suspension, revocation or denial of a broker's or salesman's license.
It is hoped the foregoing will be of assistance to you.
Very truly yours,
JOHN J. O'CONNELL
ROBERT R. MACKIN
Assistant Attorney General
*** FOOTNOTES ***
1/I.e., the Director of Motor Vehicles, see chapter 156, Laws of 1965.
2/See, State of Washington Real Estate Manual for Brokers and Salesmen, 1st Ed. (1960), p. 66.
3/Under such circumstances the obligation of the property owner, under the ordinary listing agreement, is at most simply to pay the agreed upon commission. The point, though, is that under the ordinary agreement, the broker or salesman does not sell the property; he simply procures a buyer willing and able to buy.
4/See, Burks v. Poppy Construction Co., 57 Cal.2d 463, 370 P.2d 313 (1962); andLee v. O'Hara, 57 Cal.2d 476, 370 P.2d 321 (1962).
5/In addition, Representative Smith's amendment to Senate Bill 378 contained the lengthy proviso, which was not in House Bill 426, regarding the procedures to be followed prior to taking any action to suspend, revoke or deny the license of a real estate broker or salesman upon grounds specified in the amendatory subsection.
6/This conclusion, of course, should be related in time to the date upon which chapter 22, Laws of 1967 is scheduled to become effective; i.e., June 8, 1967.