Bulletin: NY000095

Dear Associates:

Please see National Legal Department Bulletin NL000050 , which addresses the issue of illegal discriminatory restrictive covenants.

In New York, General Obligations Law §5-331 prohibits discrimination in terms or covenants in deeds, mortgages and other instruments affecting real estate, based on race, creed, color, national origin, or ancestry. Such provisions are void as against public policy and unenforceable.

The applicable federal statute (42 U.S.C. §3604(c)), more narrowly deals with the sale or rental of housing. The relevant part of the statute reads as follows:

"...it shall be unlawful.....(c) To make, print, or publish, or cause to be made, printed, or published any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin, or an intention to make any such preference, limitation, or discrimination."

This federal statute has been interpreted by the Justice Department as prohibiting title companies from showing the discriminatory terms of prohibited restrictions.

The instructions in the National Bulletin must be followed in New York, with one exception: because the statutes overlap, where a covenant contains other terms which must be excepted, do not raise the exception as shown in NL000050 , use one of the forms below instead:

R-9 Covenants and Restrictions in (Liber, R.L., Reel) _____(C)p _____, but no reference is made hereby to any provision therein imposing restrictions based on race, color, religion or creed, sex, handicap, familial status, national origin, or ancestry, as such restrictions are void and unenforceable under New York law or federal law, or both.

R-9.1 Restrictive covenants in (Liber, R.L., Reel) _____ (C)p _____, except for restrictions which are void and unenforceable under New York law or federal law, or both.

If copies of covenants are provided, any discriminatory covenants must be blanked out in the copies.