Behind the Headlines: Lessons Learned from the Latest Fair Housing News

In this lesson, the Coach spotlights recent news of settlements reached in fair housing cases. The amounts reportedly paid are sometimes staggering—which is news in and of itself—and show just how much it can cost to resolve fair housing complaints. But the real news is in the backstory, the events that led to a complaint against the community. It’s there that you can learn what, if anything, the community could have done to avoid the problem in the first place, or once the problem arose, to prevent it from escalating into a formal fair housing complaint.

In this lesson, we’re highlighting the news about four recent fair housing settlements. We’ll start with the headlines and then give you the backstory—the allegations in the complaint—so you can get a feel for how and why the situation led to a formal fair housing complaint. Then we’ll review the lessons learned from each scenario to help you avoid similar fair housing trouble at your community. Finally, you can take the Coach’s Quiz to see how much you’ve learned.

Editor’s Note: Since we’re looking at settlements, we get to hear only one side of the story—the allegations of the resident, the government, or the fair housing advocacy group filing the complaint. It may not be what really happened: All the owners, managers, and communities denied the allegations, so we don’t get to hear their side of the story, which may very well have gotten the whole thing thrown out of court. As a practical matter, however, it’s often better to settle to put an end to the matter, rather than face the prospect of lengthy and expensive legal proceedings. Just remember: The fact that the case was settled doesn’t mean that anyone did anything wrong.

BEHIND THE HEADLINES:

LESSONS LEARNED FROM FOUR RECENT FAIR HOUSING SETTLEMENTS

Headline #1: Landlords Pay $19,500 for Allegedly Denying Housing to Mother of Twins

CONNECTICUT, February 2016—HUD announced that a group of landlords have agreed to pay $19,500 to resolve complaints alleging discrimination against families with children. According to the complaint, the owners and their on-site property manager allegedly refused to rent a two-bedroom apartment to a single mother and her twin boys.

The Backstory: This case started when a mother said she contacted a property manager about renting a two-bedroom unit for herself and her twin 4-year-old boys. She alleged that, after learning she had two sons, the property manager told her that there would be some clean-up involved and that he would get back to her—but he never did. Two weeks later, she said her mother called the property manager on her behalf. When the grandmother reminded him about the two children, the manager allegedly said that he would need to consult with his wife, who wouldn’t be back in town for two weeks.

Suspecting discrimination, the mother asked her cousin to call about the unit. Allegedly, the property manager asked who would be living there and when the cousin said the apartment would be for her and her husband, he offered to show her the unit the next day.

The mother filed a HUD complaint, alleging that the community denied her the opportunity to rent a two-bedroom unit because she has children. Though the owners and manager denied the allegations, the parties reached a settlement. Without admitting liability, the community agreed to pay the mother $19,500 and to modify its website and advertising policy to clearly state that families with children are welcome.

“When a property owner refuses to show an available unit to a family because they have children, they’re not only denying them a housing opportunity, they’re violating the law,” Gustavo Velasquez, HUD Assistant Secretary for Fair Housing and Equal Opportunity, said in a statement. “No one should have to hide who they are or who their family is while looking for a place to live. This agreement reaffirms HUD’s commitment to ensuring that housing providers treat all applicants the same, regardless of gender, race or family status.”

Lessons Learned:

1.   It’s NOT Okay to Turn Away Families with Children: Though it’s been unlawful for 25 years, communities continue to run afoul of fair housing provisions banning discrimination based on familial status. These rules bar communities from denying housing to applicants because they have one or more children under 18 living with them. Unless the community qualifies as senior housing, it’s unlawful to screen out or deny housing to families with children.

2.   Dot Your I’s and Cross Your T’s to Qualify as Senior Housing: Don’t get lulled into a false sense of security because fair housing law recognizes an exception to the rules banning familial status for senior housing communities. It’s a limited exception, which applies only to “housing for older persons,” and there are lots of hurdles to jump before a community may qualify for the exception. Unless your community meets those specific technical requirements, you can’t simply decide that you’d prefer to rent to adults instead of people who have one or more children in their household.

3.   Testers Are on the Lookout for Discrimination Against Families: It’s common for prospects to ask friends or family members to check out suspicions that they’re getting the runaround because they have kids, but increasingly it’s testers who are contacting communities to check for discrimination based on familial status. To avoid even the hint of discriminatory intent, treat every contact as if he was a fair housing tester—he very well may turn out to be one.

Editor’s Note: This settlement is among the latest in a string of recent settlements and court filings in housing discrimination complaints based on familial status. In December 2015, for example, a Wisconsin community agreed to a $100,000 settlement to resolve allegations that it unlawfully excluded families with children from significant portions of its 230-lot mobile home park. You can learn more about the case—and sign up for free legal updates featuring the latest news on fair housing law—at FairHousingCoach.com.

Headline #2: Community to Pay $35K to Settle Dispute Over Resident’s Pit Bull

MINNESOTA, January 2016—The owners and managers of a Midwest community recently agreed to pay $35,000 to settle a lawsuit filed by the Justice Department, alleging that they violated fair housing law by placing undue conditions on a resident’s request to live with her assistance animal and then refused to renew her lease.

The Backstory: The case is about a resident who moved into an 800-unit community, which allowed pets and assistance animals, but had a “no dangerous breeds” policy that prohibited pit bulls. Before moving in, the resident allegedly had been in treatment for mental health disabilities that stemmed, at least in part, from witnessing the traumatic deaths of her boyfriend and mother. A family member gave her a young pit bull, which her treating psychologist said helped alleviate the symptoms of her disability and was a “major and required part of her treatment program.”

She apparently didn’t mention the dog when she moved into the community later that year. When the community discovered the pit bull, the resident requested a reasonable accommodation so she could keep it as an emotional support animal. Allegedly, the community denied the request and told her to remove it.

What followed were communications involving the resident, community representatives, and their lawyers, and ultimately, a series of court proceedings. During the process, the resident produced documentation from her treating psychiatrist that the specific animal was necessary for her to be able to live there and essential to her recovery from the severe trauma she suffered. In an interview before a court reporter, the psychiatrist said much the same thing.

It was about half-way through the one-year lease term when the parties came to terms. In lieu of granting her requested accommodation, the community allegedly gave her two options: either immediately terminate her lease and get some rent back or keep the dog through the end of the lease, but with conditions. Allegedly, the conditions included obtaining an insurance policy to cover the dog, requiring the dog to wear an emotional support vest whenever he left her unit, and repaying the community for any harm caused by the dog.

According to the resident, she picked the second option, but a few months later, she received notice that her lease would not be renewed. Renewed negotiations were unsuccessful, and she moved out. 

After the resident filed a HUD complaint, the Justice Department sued the community for discrimination and retaliation against the resident on the basis of her disability.

The community denied the allegations, but the parties reached a settlement to resolve the matter. Without admitting liability, the community agreed to pay $35,000 to the former resident and adopt policies, including a reasonable accommodation policy that specifically addressed requests for assistance animals. Under the new policy, assistance animals are not subject to breed restrictions or required to wear vests or other insignia that identify them as assistance animals; residents are not required to pay any fees or obtain insurance as a condition of keeping assistance animals.

Lessons Learned:

1.   Assistance Animals Are NOT Pets: Some communities ban pets altogether, while others place limits on the number, type, size, or weight of pets and impose conditions such as extra fees, security deposits, or additional rent charges. Whatever your pet policy, you must consider a request to make an exception to allow an assistance animal when needed by an individual with a disability to fully use and enjoy the community. That includes a request to keep a pit bull as an assistance animal—despite any policies banning so-called “dangerous breeds”—unless there’s evidence that the particular animal poses a direct threat to the safety or property of others.

2.   Requests for Assistance Animal Can Come Anytime: Don’t get thrown off because the resident makes a reasonable accommodation only after you discover she’s been keeping an animal in violation of your pet policy. Under fair housing law, reasonable accommodation requests may be made at anytime before or during the tenancy. The timing may be off, but it’s risky to deny the request—or make the resident jump through hoops—to overcome suspicions that she’s trying to get around your rules by falsely claiming a pet is an assistance animal. Instead, follow your standard policies for handling reasonable accommodation requests, including verification of the disability and need for the assistance animal if either or both are not known or readily apparent.

3.   Don’t Impose Extra Conditions to Allow Assistance Animals: Don’t require residents with disabilities to pay pet fees or get extra insurance coverage as a condition of allowing them to keep assistance animals. Conditions and restrictions that communities apply to pets may not be applied to assistance animals, according to HUD, though you do have recourse against residents for damages caused by assistance animals. HUD says you may require a resident to cover the cost of repairs for damage the animal causes to his unit or the common areas, reasonable wear and tear excepted, if it’s your policy to assess residents for any damage that they cause to the premises. Allowing for reasonable wear and tear, you may assess the costs against the standard security deposit charged to all residents, regardless of disability.

Editor’s Note: To learn more about fair housing rules governing assistance animals, you can download our recent webinar, “Assistance Animals: What Housing Providers Need to Know.” This one-hour program, presented by California attorney Theresa L. Kitay, offered much-needed guidance to multifamily housing owners and managers on complying with their obligations to accommodate people with disabilities who require assistance animals. To view the webinar, click here.

Headline #3: Owners Pay $40K to Settle Claims that Neighbors Harassed Resident’s Disabled Daughter

WISCONSIN, January 2016—The Justice Department announced that the owners and property managers of a 15-unit apartment community have agreed to pay $40,000 to settle allegations that they failed to stop disability-related harassment of a resident’s daughter by neighbors and then refused to renew their lease because of her disability and that of her daughter.

The Backstory: The case involved a mother and daughter who moved into the community in 2013. Both allegedly had disabilities: The mother had cerebral palsy and a vision impairment, and her 21-year-old daughter was born with Down Syndrome. A family friend helped the family by arranging their housing, taking care of their finances, communicating with others on their behalf, and running errands for them.

While moving in, the mother said they were subjected to offensive comments and gestures by at least three other residents. Among other things, the neighbors allegedly called the daughter “mentally retarded,” and said, “You don’t belong here…you belong in an institution.” Allegedly, the neighbors said much the same thing in complaints to the owner.  

A few days later, the friend said she emailed the owner, explaining that the daughter had a few rough evenings, crying loudly, but that the mother had calmed her down; she also defended the girl against the neighbors’ accusations by saying that she was a great kid and an honor student. Soon after, the friend said that the owner called her; allegedly, he said his policy was not to get involved in neighbor disputes and told them to develop a “plan” to deal with noise complaints about the daughter.

In the months that followed, the friend said she repeatedly complained to the owner and the building manager about continued harassment by the neighbors, one of whom allegedly followed them around making offensive comments and and telling them that they couldn’t use common areas. Allegedly, the mother called police, who warned the neighbor to stop the harassment, but it continued throughout their tenancy, making the daughter afraid to leave the unit.

Eventually, the residents said that their lease wasn’t renewed, so they moved out at the end of the term.

The mother filed a HUD complaint, which triggered the Justice Department to file suit against the owner and manager for fair housing violations. The complaint accused them of disability discrimination by refusing to renew the lease because of the disabilities of the mother and daughter; demanding that they develop a “plan” to deal with the daughter’s disability-related behavior; and pressuring them to move. The complaint also accused them of failure to take prompt action to correct and end the neighbors’ disability-related harassment of the residents.

Though the owner and manager denied the allegations, the parties reached a settlement to resolve the matter. In addition to paying the $40,000 settlement, the community agreed to maintain nondiscrimination housing policies, advertise that they are equal opportunity housing providers, and provide fair housing training.

“No family should have to endure degrading insults and comments in the place they call home,” Gustavo Velasquez, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity, said in a statement. “Today’s settlement reflects HUD and the Justice Department’s ongoing commitment to taking appropriate action against individuals who violate the housing rights of persons with disabilities.”

Lessons Learned:

1.   Rethink “Don’t Get Involved” Policy: It would be exhausting to get involved in every dispute between neighbors, but you should pay close attention to any complaints involving offensive comments or harassment by or against anyone based on race, color, or any other characteristic protected under federal, state, and local law. Depending on the nature and severity of the complaint, you could face liability for harassment under fair housing law if you knew about the offensive conduct but failed to do anything to stop it.

2.   Make a Plan to Address Residents’ Harassment Complaints: Promptly address any complaints of discrimination or harassment based on a protected characteristic—regardless of whether it’s against an employee, an outside contractor, another resident, or other third party. Conduct an investigation and, if warranted, take adequate steps to stop the offending conduct. Get legal advice if necessary, and document what you’ve done to resolve the matter.

3.   Stay Tuned for Upcoming Regulations: HUD is currently in the process of finalizing proposed regulations on liability for harassment under fair housing law. Under the proposed regulations, a person may be directly liable for failure to fulfill a duty to take prompt action and end a discriminatory housing practice by a third party, where the person knew or should have known of the discriminatory conduct.

Editor’s Note: For more detailed information about HUD’s proposed regulations on harassment, see the Coach’s January 2016 lesson, “A Look Ahead: How HUD’s New Proposed Fair Housing Rules Could Affect Your Community.”

Headline #4: Community Pays $251,500 to Settle Race Discrimination Claims

ILLINOIS, July 2015—The owners and operators of an Illinois mobile home community recently agreed to pay $251,500 to settle a lawsuit alleging race discrimination, according to the Justice Department. The complaint alleged that the former manager imposed more burdensome application requirements to discourage African-American prospects from living there.

The Backstory: This case is based on allegations that the community’s property manager refused to let an African-American man be added as a resident at the park when he moved in with his white girlfriend and her uncle. During the two months he stayed there, the man said that the manager’s son, who helped manage the property, subjected him to racially derogatory comments and harassment. The family said they moved out after being threatened with eviction for having an unauthorized guest unless the boyfriend moved out.

After they filed a HUD complaint, the Justice Department conducted an investigation by sending out testers to check for race discrimination. Based on the family’s complaint and the results of the testing, the Justice Department sued the owners and operators of the community for fair housing violations. According to the complaint, the testing showed that the manager treated prospects differently based on their race by, among other things:

• Requiring African-American prospects to fill out rental applications to be approved for residency, while offering lots to similarly situated white prospects without requiring them to fill out an application;
• Requiring African-American testers to have their mobile homes inspected by the manager before they could move in, but not requiring such inspections for white testers; and
• Quoting higher estimated move-in costs to African-American testers than to white testers.

Until the lawsuit was filed in 2014, the complaint alleged that there had been no African-American residents at the community since at least 2007, when the manager got the job.

The community denied the allegations, but the parties reached a settlement to resolve the case. Without admitting liability, the community agreed to pay the family $217,500 in damages and attorney’s fees and a $34,000 civil penalty. The community also agreed to implement a nondiscrimination policy, establish new nondiscriminatory application and rental procedures, conduct fair housing training, and meet reporting requirements.

“Federal law guarantees everyone the right to housing on equal terms and the right to live free from harassment because of their race or color,” Principal Deputy Assistant Attorney General Vanita Gupta, head of the DOJ’s Civil Rights Division, said in a statement. “Settlements such as this one help ensure that all people can enjoy that right.”

Lessons Learned:

1.   Keep Race Out of the Leasing Process: It’s illegal to allow race to play any part in decisions about who may live in your community. The Fair Housing Act bans refusing to rent or making housing unavailable to anyone based on his race—or that of anyone associated with him. It’s also unlawful to represent to anyone, because of his race, that a dwelling is not available for rental when such dwelling is in fact available.

2.   Consistency Is Key to Avoiding Fair Housing Problems: Federal officials and private fair housing agencies are still on the lookout for race discrimination by sending out paired testers of different races to see how they’re treated. They’re often looking for any differences in responses to inquiries about vacancies, explanations of application requirements, quoted fees and rental charges, and willingness to show units—to name a few. To avoid fair housing trouble, maintain standard policies and procedures to ensure consistent treatment of prospects, regardless of their race. And document your process with written records, such as guest cards, phone logs, unit availability logs, rental applications, wait lists, and the like.

3.   Don’t Assume Race Discrimination Is a Thing of the Past: It’s not—it’s just gone underground, according to HUD’s latest round of nationwide testing. The 2013 study found that blatant acts of housing discrimination faced by minority home seekers continues to decline, but more subtle forms of housing denial stubbornly persist. Though few prospects were denied an appointment to see an advertised unit, the study found that real estate agents and rental housing providers recommended and showed fewer available homes and apartments to African-American, Asian, and Hispanic families. The study, which involved 8,000 paired tests in 28 metropolitan areas across the country, concluded this is a national, not a regional, phenomenon.

• Fair Housing Act: 42 USC §3601 et seq.