Deadly Fair Housing Sins: Old and New

Part I: Recurring Violations of Long-Standing Rules

This month, we’re starting a two-part lesson on the deadly sins of fair housing law. Though the deadly sins are historically seven in number, we’ve added a few more to cover the most costly fair housing violations. And we’re breaking it down into two parts—deadly fair housing sins, old and new. This month, Part I of the lesson will cover old—that is, recurring violations of long-standing fair housing rules. And next month, Part II of this lesson will focus on the new—emerging trouble spots identified by our fair housing experts.

     Let’s start with the old sins—violating federal fair housing rules that have been on the books for many years, but continue to trigger costly fair housing claims. Federal fair housing law has long banned discrimination based on race, color, religion, national origin, sex, disability, and familial status. Yet each year, thousands of fair housing complaints are filed, the bulk of which involve disability—at a whopping 40+ percent—followed by race, and familial status. Just last year, communities paid out thousands—and in some cases, millions—to resolve allegations involving these basic federal fair housing rules.

     We’ll review the seven deadly recurring sins of federal fair housing law—and suggest strategies to keep your community from committing them. Then you can take the COACH’s Quiz to see how how much you’ve learned. 

WHAT DOES THE LAW SAY?

The Fair Housing Act (FHA) forbids housing discrimination because of race or color, national origin, religion, gender, disability, and familial status (having children under age 18). The law applies to rental, sales, lending, and other housing transactions.

     With respect to rental housing, the FHA declares certain practices to be unlawful when based on any of these characteristics. Among the prohibited practices are:

• Making housing unavailable by excluding or otherwise denying housing;
• Imposing different terms, conditions, or privileges for rental, such as higher rental payments or fees, more stringent screening criteria, or different housing services;
• Making discriminatory statements, including advertising;
• Misrepresenting the availability of rental units; and
• Threatening, harassing, or retaliating against anyone for exercising their rights under fair housing law.

     Taken together, these provisions prohibit communities from denying housing or treating people differently based on their race, color, religion, national origin, sex, disability, or familial status. Discriminatory conduct can be overt or subtle—it’s just as unlawful to refuse to rent to African-American prospects as it is to treat them differently than whites by quoting higher rent or applying more stringent screening criteria. The same is true whether it’s aimed at families with children, people of certain ethnic groups, and others protected under the FHA.

     In addition to these general provisions, there’s another important category of additional protections afforded to individuals with disabilities. The FHA imposes certain obligations on housing providers—with respect to reasonable accommodations, reasonable modifications, and accessibility design features—to ensure that individuals with disabilities have the same opportunity as everyone else to have full use of the community.

HOW TO AVOID COMMITTING 7 DEADLY FAIR HOUSING SINS

Deadly Sin #1: Improperly Handling Reasonable Accommodation or Modification Requests

Failure to properly deal with reasonable requests for accommodations or modifications by individuals with disabilities has led, at least in part, to the high number of disability discrimination claims each year, according to HUD.

     Under the FHA, it’s unlawful to deny a request for a reasonable accommodation—that is, an exception to or alteration of rules, policies, practices, or services—when necessary for a person with a disability to have equal opportunity to use and enjoy a dwelling. Common requests involve assistance animals or designated parking spaces. 

     The FHA also makes it unlawful to refuse to permit an individual with a disability, at his expense, to make reasonable modifications—structural changes—when necessary to afford him full enjoyment of the premises. Requested modifications may be inside units, such as removal of carpeting or installation of visual smoke detectors, or outside in common areas, such as installation of ramps or curb cuts in the parking lot.

     Some requests present difficult challenges, but many complaints arise simply from the failure to take requests seriously or to address them properly. Ignoring accommodation or modification requests, delaying a response to them, or turning them down without proper consideration may itself lead to a fair housing complaint—regardless of the merits of the request.

     To avoid committing these sins, fair housing experts urge communities to adopt and apply uniform policies and procedures for handling reasonable accommodation and modification requests. Train employees on how to recognize accommodation requests and to report any time residents say they need or want something because of a disability. Thoroughly evaluate the request and respond in a timely manner. Be sure to document every step in the process so you’ll have everything you need—just in case you are called to defend your actions.

Deadly Sin #2: Treating Assistance Animals as Pets

Don’t confuse assistance animals with pets! Each year, communities find themselves accused of violating the reasonable accommodation rules by applying rules restricting pet ownership to applicants and residents with qualifying assistance animals.

     Though people commonly recognize that guide dogs for people with vision or hearing impairments are assistance animals, the FHA rules on assistance animals broadly apply to species other than dogs, with or without specialized training, and to animals that provide emotional support. Complaints often arise when communities treat assistance animals as pets, particularly when the animal doesn’t seem to have any special skills or the individual doesn’t have any obvious impairment.

     Example: In September, a Florida condo association agreed to pay $18,000 to settle a HUD complaint alleging that it refused to make an exception to its no-pets policy to allow a resident to keep an emotional support animal as a reasonable accommodation for her disability.

     HUD alleged that the association’s board unlawfully refused to allow the resident, who had mental and physical impairments, to keep her support animal, even though she provided medical documentation attesting to her need for the accommodation. At the same time, according to HUD, some of the same board members who supported denying the resident’s request had or had previously had animals in their units.

     Under the settlement, the community agreed to pay the resident $18,000 and allow her to keep her emotional support animal. In addition, the community must adopt a reasonable accommodation policy and obtain fair housing training for all of its board members [HUD Conciliation Agreement, Point East Three Condominium Corporation, Inc., September 2012].

     To avoid committing this deadly fair housing sin, be sure to handle requests for assistance animals as you would any other reasonable accommodation request. The fact that the individual making the request doesn’t have an apparent disability, or the nature of the animal’s services aren’t apparent,  doesn’t mean that she isn’t entitled to have an assistance animal under fair housing law.

Deadly Sin #3: Ignoring Accessibility Problems

There’s a potential powder keg lurking in communities across the country: Accessibility problems from failure to satisfy the FHA’s design and construction standards. Those rules require that multifamily housing structures built for first occupancy after March 13, 1991, contain accessible features for persons with disabilities. The requirements include accessible common areas, bathrooms, and kitchens, as well as wider doors and environmental controls that can be reached by persons who use wheelchairs. Failing to include these features violates the federal fair housing law.

     Though the rules have been in place for more than 20 years, federal enforcement officials and private fair housing groups continue to pursue claims against those involved in building new housing developments for failure to satisfy those standards. The cases are complicated, tying up owners, developers, architects, and builders in court for years—and in some cases, settling for millions.

     Example: In June 2012, the Justice Department announced that a Texas-based developer and affiliated entities agreed to a landmark $10.5 million settlement to resolve allegations of disability discrimination in the design and construction of multifamily housing complexes throughout the country. Since 1991, the developer and its affiliates built 210 multifamily properties in 26 states and the District of Columbia.

     Shortly before a trial involving 32 properties, the parties reached a settlement, requiring the developers to pay $10.25 million to establish an accessibility fund to increase the stock of accessible housing in the communities where their properties are located, including providing retrofits at their properties. In addition, the developers must pay a $250,000 civil penalty. The developers have since left the multifamily development and construction business, but if they re-enter the business, the settlement requires them to design and construct covered multifamily dwellings to fully comply with FHA and ADA requirements [U.S. v. JPI Construction, L.P., June 2012].

     Owners, as well as developers and builders, may be on the hook for violating these design and construction standards. So what, you may be asking, are you to do once the property has been built?

     The answer, according to fair housing experts, is to pay attention to any complaints about accessibility problems at your community. Even casual remarks from a resident in a wheelchair about accessibility problems—for example, curbs without a curb cut, kitchens and bathrooms with insufficient maneuvering space, or out-of-reach temperature controls—could be the first sign that there may be design flaws at the community.

     Depending on the nature of the problem, address the resident’s concerns under your policies governing reasonable accommodation or modification requests. And, if warranted, alert the management to a potential fair housing problem related to the community’s design or construction.

Deadly Sin #4: Discriminating Based on Race

Ending race discrimination was the among the key goals of federal fair housing law, but each year, federal officials pursue complaints of race discrimination—often from African-American prospects who claim that they were denied housing because of their race.

     In some cases, communities have been accused of enforcing a policy against renting to African-Americans, but more common are complaints based on the wayward actions of managers or employees. In the past few months, several communities have been forced to pay thousands to settle the accusations that an employee misrepresented the availability of housing to African-American prospects: 

     Example: In late November 2012, the owner and operator of a Wisconsin community agreed to pay $57,500 to settle allegations that he violated the FHA by denying housing to African-American prospects because of their race.

     The complaint alleged that the community’s former manager told an African-American couple who were interested in renting an apartment that there were no apartments available, even though the complex had posted a sign advertising vacancies. Suspicious, the couple asked a white friend to contact the complex, and the manager allegedly told the white friend that he had apartments available.

     Based on their complaint, a private fair housing organization conducted testing, which allegedly confirmed that the manager was telling African Americans that apartments were not available, while showing available apartments to white prospects.

     The settlement requires the defendants to pay the couple $47,500 in damages, plus a $10,000 civil penalty. The community also agreed to develop and maintain nondiscrimination housing policies and attend fair housing training [U.S. v. Geneva Terrace Apartments, Inc., November 2012].

     Example: In October 2012, the owners, managers, and superintendent of a 72-unit community in the Bronx, New York, agreed to pay $75,000 to settle allegations of discrimination against African-American apartment seekers. The lawsuit was based on the results of testing conducted by a private fair housing organization at the request of federal enforcement officials.

     The complaint alleged that the community misrepresented the availability of apartments, quoted higher prices, failed to provide rental applications, and failed to show apartments to African-American testers while similarly situated white testers were told about apartments, shown apartments, provided applications, and quoted lower prices. As part of the settlement, the community’s superintendent admitted that, on repeated occasions, he informed African-American prospects that there were no available apartments; but, on the same day, he informed white prospects that there were available apartments in the building.

     The settlement requires the defendants to pay a $40,000 civil penalty and establishes a $35,000 victim compensation fund. In addition, the community must implement a policy of uniform, nondiscriminatory standards and procedures for showing available apartments to prospective tenants; educate employees on housing discrimination laws; and submit periodic reports about rental activities and submit to federal authorities [U.S. v. Loventhal Silver Riverdale LLC, October 2012].

     The FHA also makes it unlawful to subject residents to different terms and conditions of the tenancy because of their race. Communities may face complaints of racial discrimination based on alleged discriminatory treatment of African-American residents by a staff member.

     Example: In September 2012, the Justice Department filed a lawsuit against the owners and manager of approximately two dozen rental homes in North Carolina, alleging that the manager discriminated against African-American residents.

     The case began when a former tenant at one of the properties contacted the Justice Department to report the manager’s conduct. After an investigation, the Justice Department filed the complaint, accusing the manager of: delaying or refusing to perform maintenance or repairs at properties rented by African Americans and refused to credit them for repairs they paid for or made themselves; verbally harassing African-American residents with racial slurs and epithets; and threatening, harassing, and retaliating against African-American residents who resisted his discriminatory housing practices. The case is now pending in federal court [U.S. v. Cochran, September 2012].

     To avoid committing this deadly sin, it’s essential to review your policies and procedures to prevent and detect any incidents of racial discrimination by your subordinates. Provide all employees with adequate training and supervision to ensure that they aren’t acting out of racial bias when handling leasing and maintenance operations on your behalf.

Deadly Sin #5: Excluding Families with Children

Communities continue to get into fair housing trouble when it comes to families with children. Under the FHA, it’s unlawful to refuse to rent to families with children under the age of 18 unless the community qualifies as senior housing. Nevertheless, federal officials continue to press claims against communities accused of unlawfully turning away families with children.

     Example: In August 2012, the owner of a 16-unit apartment complex in South Carolina agreed to pay $25,000 to settle a lawsuit that he had violated federal fair housing law by discriminating against families with children.

     The complaint alleged that in online advertising, the owner listed vacant one-bedroom units, which stated “No kids,” and that the voicemail message on his office phone stated that “tenants must be at least 21.”

     The Justice Department conducted an investigation as part of its Fair Housing Testing Program. Based on statements to fair housing testers, the department filed suit, accusing him of maintaining a policy or practice of discouraging families with children from living in the apartment complex.

     Under the settlement, the owner must pay $15,000 in damages and a $10,000 civil penalty, adopt a nondiscrimination policy, and receive fair housing training [U.S. v. Altman, August 2012].

     In some cases, communities have been accused of discriminating against families with children by operating as a senior housing community without satisfying the legal requirements needed to qualify as “housing for older persons.”

     Example: In November 2012, HUD charged a Minnesota condominium association and property managers with violating the FHA by maintaining a policy that prohibited children under 18 from living in the building, even though the property didn’t meet the federal qualifications to be housing for older persons.

     HUD alleged that the condo association and its property managers notified the owners of a condo unit that they were violating community rules by allowing their minor children to live with them for more than 30 days in a calendar year, levied fines against them, and filed a lawsuit in state court in an effort to keep the children from living with them. According to HUD, the condominium association failed to meet the federal requirements to qualify as housing for older persons because the association didn’t formally and routinely verify the ages of the complex’s residents. The case will be the subject of an administrative proceeding, unless either party elects to take the matter to federal court [HUD v.7000 Sandell Condominium Association, Inc., November 2012].

     To avoid committing this deadly fair housing sin, communities must not deny housing to families with children under 18—or others protected under the familial status provisions. The only exception applies to senior housing communities—but only if they adopt policies and procedures to ensure strict compliance with the law’s technical requirements.

Deadly Sin #6: Imposing Overly Restrictive Rules on Families with Children

Another deadly fair housing sin occurs when communities enforce unduly restrictive occupancy policies and other rules that effectively exclude or discriminate against families with children.

     Federal officials are cracking down on communities that deny housing to families because of overly restrictive occupancy standards. Although a general rule of thumb is two people per bedroom, communities must abide by state or local laws that may allow more than that number to live in a particular unit. The rules are gender-neutral, so communities could face a fair housing complaint for refusal to rent to families because children of opposite sexes may share a bedroom.

     It’s also unlawful to treat families differently because they have young children living with them. For example, it’s unlawful to limit a family’s choice of housing by steering them away from upper floors or other conditions, such as water hazards, out of concerns about safety or liability.

     Another problem arises when communities apply different terms or conditions on families with children. This runs the gamut of charging higher rent or other fees to adopting rules that unreasonably restrict children’s outside activities.

     Example: In March 2012, the owner of a Pennsylvania community agreed to pay $15,000 to settle claims of discrimination against families with children.

     HUD received the initial complaint from a fair housing organization, which alleged that its testing showed that the manager charged households with children more than same-size households without children. HUD’s charge also alleged that the owner and manager made discriminatory statements, including in online advertisements, indicating a preference against families with children and discouraging families with children from applying for housing.

     Under the settlement, the owner agreed to pay $15,000 to the fair housing organization and implement a nondiscrimination policy at the community. The complex will also display fair housing signs in its leasing office, as well as the “Equal Housing Opportunity” logo on its vacancy signs and other rental materials [HUD v. Breckenridge Plaza, Inc., March 2012].

     Example: In February 2012, the owners and managers of an Oregon community agreed to pay $55,000 to settle allegations of housing discrimination against families with children. State fair housing officials received several complaints from current and former residents. Once made aware of the allegations, the owners and managers stepped forward to cooperatively resolve fair housing claims, according to state officials.

     Under the settlement, they agreed to remove policies from tenant rules and regulations that prohibit, among other things, children from riding bicycles, tricycles, “Big Wheels,” skateboards, or roller skates on the property, policies that prohibit children from having toys on private patios, and agreed not to enforce policies that restrict where children can play on the property. These policy changes will apply to approximately 8,300 units under the company’s management.

     The agreement requires payment of a total of $35,000 to six current and former residents, $20,000 in attorney fees and costs of $20,000 to the state agency, and nearly $10,000 to a legal services agency. They also agreed to pay for a playground structure for the center courtyard area at the community and to refrain from collecting fines and other tenant debts that accrued as a result of enforcement of potentially unlawful policies.

     To prevent this deadly fair housing sin, communities must ensure that community policies, including occupancy standards, don’t unfairly limit or discourage families with children from living there. Check your resident rules—you may adopt reasonable rules to ensure the peaceful enjoyment of the premises, but make sure that they don’t impose unfair restrictions on families with children.

Deadly Sin #7: Failing to Prevent Sexual Harassment

Take all steps necessary to prevent sexual harassment, a form of sex discrimination banned under the FHA. Though sexual harassment is clearly unlawful, federal enforcement officials recently resolved several high-profile cases in which owners were forced to pay millions because of sexual harassment of female residents.

     Example: In September 2012, the owner and manager of dozens of residential rental properties in Bakersfield, Calif., agreed to pay more than $2 million to settle allegations that he sexually harassed female prospects and residents.

     The complaint alleged that the owner, who had been in the real estate business for more than 30 years, sexually harassed the women by making unwelcome sexual comments and advances, exposing his genitals to female residents, touching women without their consent, granting and denying housing benefits based on sex, and taking adverse actions against women who refused his sexual advances.

     Under the settlement, the owner must pay $2.075 million in damages to 25 individuals identified as victims and a $55,000 civil penalty. The agreement also required him to hire an independent manager to manage his rental properties and imposed strict limits on his ability to have contact with current and future residents [U.S. v. Sorensen, September 2012].

     Example: In May 2012, the owners and managers of three residential buildings in Manhattan agreed to pay more than $2 million to resolve allegations that they discriminated on the basis of sex and subjected numerous female residents to severe, unwelcome, and pervasive sexual harassment.

     According to the complaint, the owner employed a Level 3 registered sex offender as the superintendent of the properties. The superintendent allegedly sexually harassed female residents by attempting to enter their apartments while inebriated and demanding sex; engaging in unwelcome groping and fondling; subjecting them to unwanted verbal sexual advances; demanding sexual favors in return for tangible housing benefits such as rent reductions; and taking adverse actions against women who refused to comply with his demands for sex.

     The complaint also accused the owner’s son, who managed the properties, of creating a hostile environment for female residents by repeatedly subjecting them to vulgar and offensive epithets because of their gender, threatening them, and engaging in other intimidating, humiliating, and abusive behavior.

     According to the complaint, the owner received complaints about the employees’ sexual harassment, but failed to take any steps to stop it.

     The settlement requires payment of more than $2 million to the six alleged victims and $55,000 in civil penalties, and permanently bans the superintendent from having any involvement in the management or maintenance of occupied rental housing properties [U.S. v. Barnason, May 2012].

     To avoid committing this deadly fair housing sin, it’s essential to effectively supervise employees as well as any third-party vendors and contractors who may interact with residents. Develop policies to ensure adequate safeguards to avoid potential problems involving anyone entering residents’ units for maintenance or repairs. And address any complaints of sexual harassment quickly and effectively. Once aware of a problem, owners are more likely to incur liability for sexual harassment by subordinates, outside contractors, or even other residents, if the owner knew or should have known about it and did nothing to stop it.

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