Fair Housing 101: How To Comply With Fair Housing Law

April 9, 2010

This month marks the 42nd anniversary of the passage of the Fair Housing Act (FHA), the federal law that bars housing discrimination on the basis of race, color, religion, national origin, sex, disability, and familial status.

This month marks the 42nd anniversary of the passage of the Fair Housing Act (FHA), the federal law that bars housing discrimination on the basis of race, color, religion, national origin, sex, disability, and familial status.

Although the law has been on the books for more than four decades, housing discrimination remains a serious problem that is generating increased enforcement activity by federal, state, and local government agencies and activists. Just a few months ago, HUD announced that 98 fair housing organizations and other nonprofit agencies from across the country will share $26.3 million in funding—$21.1 million of which is earmarked for private enforcement grants to help groups investigate alleged housing discrimination.

Unless communities dedicate sufficient time and effort to ensure compliance with fair housing law, the results of such attention can add up to millions in penalties and damages—not to mention attorney's fees, lost productivity, and damage to your community's reputation.

In the past six months alone, for example, two communities have agreed to multimillion-dollar settlements to resolve lawsuits filed by the U.S. Department of Justice under the FHA. In November 2009, a California community owner agreed to pay $2.725 million—the largest monetary payment ever obtained by the department in the settlement of a rental housing discrimination case—to resolve allegations of housing discrimination against African-Americans, Hispanics, and families with children. The second highest followed in February 2010, when the owners, former owners, and managers of a Kansas community agreed to a combined settlement of $2.13 million in an FHA case filed by the department alleging housing discrimination based on race.

This month's issue reviews the basics of federal fair housing law—who must comply, who is protected, and what it covers—as well as some state and local variations. Then we'll suggest six rules to ensure compliance with fair housing law. Finally, you can take the COACH's Quiz to see how much you've learned.

WHAT DOES THE LAW SAY?

The FHA is a federal law that bars housing discrimination on the basis of race, color, religion, national origin, sex, disability, and familial status. Though the law bars discrimination in other housing transactions, including sales, brokerage, insurance, and lending, we are going to concentrate on its provisions regarding rental housing.

The FHA applies to most public and private rental housing communities, though there are exceptions for:

Owner-occupied buildings with no more than four units;

Single-family homes rented without a broker; and

Housing operated by religious organizations or private clubs that limit occupancy to their members.

Owners, managers, and employees all may be held liable for discriminatory policies or practices in violation of the FHA. Depending on the circumstances, owners may be held liable for discrimination or harassment by managers, employees, and even outside contractors or other residents, if they knew or should have know about the problem, but did nothing to stop it.

Protected Characteristics

Here's a rundown of the characteristics protected under the FHA:

Race and color. The FHA bans discrimination based on both race and color, two separate but closely related characteristics. Generally speaking, race refers to a person's physical appearance and color refers to a characteristic of a person's race, so discrimination claims based on color are often coupled with claims based on race.

National origin. The FHA bans discrimination based on national origin, which generally refers to the country that a person or his ancestors come from. Discrimination claims based on national origin can arise not only from exclusionary practices, but also linguistic profiling—treating prospects or applicants differently because of the way they speak. In some cases, discrimination claims based on national origin are closely tied to claims based on race or color. For example, a community that showed a preference for members of certain ethnic groups, such as Korean people, could be accused of discrimination based on race, color, and national origin.

Religion. The FHA prohibits discrimination based on religion, which generally means that communities may not discriminate against members of a particular faith or belief system. The law does not define “religion,” but fair housing experts say that the law's protections are broad enough to prohibit discrimination against individuals who are not affiliated with a particular religion or do not ascribe to particular religious beliefs. In some cases, fair housing complaints may include claims based on both religion and national origin, for example, if the community discriminates against individuals who are Muslim or of Middle Eastern descent.

Sex. The FHA bans discrimination based on sex, which generally means that communities may not exclude or otherwise discriminate against anyone based on his or her gender. Sexual harassment is a form of discrimination based on sex, and involves two types of unwanted sexual conduct:

Conditional tenancy (also known as “quid pro quo” discrimination) occurs when a resident is pressured to succumb to unwelcome sexual advances in exchange for either positive or negative treatment (such as getting a discounted rent or avoiding eviction for late rent payments); and

Hostile housing environment occurs when a resident is subjected to severe and pervasive sexual harassment that unreasonably interferes with the use and enjoyment of the premises.

Familial status. By familial status, the FHA generally means households with one or more children who are under 18 years of age, where the child is living with:

A parent;

A person who has legal custody (such as a guardian); or

Someone who has the written permission of the parent or legal custodian to care for the child.

The ban on familial status discrimination also applies to pregnant women and anyone in the process of securing legal custody of a minor child, such as a foster or adoptive parent.

Overly restrictive occupancy standards can lead to discrimination claims based on familial status because they limit the housing choices of families with children under 18. In general, the law considers two people per bedroom—regardless of gender—to be a reasonable occupancy standard, but there are exceptions based on the size or configuration of the unit or the bedrooms.

Under certain conditions, senior housing communities may exclude families with minor children or impose different terms and conditions of residency from the familial status provisions. To be entitled to the exception, the senior community must qualify as “housing for older persons” because its housing is:

Provided under any state or federal program that HUD has determined to be specifically designed and operated to assist elderly persons;

Intended for, and occupied solely by, persons who are 62 or older; or

Intended and operated for occupancy by persons 55 and older (communities where at least 80 percent of the occupied units have at least one occupant who is 55 or older and meet other requirements).

Disability. In the parlance of the time, the law bans discrimination based on “handicap,” though the term “disability” now is more commonly used. Disability generally means a physical or mental impairment that substantially limits one or more major life activity.

The law protects not only individuals who have a disability, but also individuals with a record of such disability (such as medical history of such an impairment), or those who are regarded as having such a disability (such as someone who is believed to have a mental illness, but in fact does not have such an impairment). In general, individuals who currently use illegal drugs or pose a direct threat to the health and safety of others are not considered disabled under the FHA.

COACH'S TIP: The FHA allows states, counties, and municipalities to expand fair housing protections beyond the seven characteristics listed in the federal law. Many have responded by banning housing discrimination based on characteristics such as sexual orientation, marital status, age, ancestry, creed, political affiliation or belief, arrest or criminal history, military or veteran status, immigration status, domestic violence survivor, lawful occupation, source of income, student status, HIV status, personal appearance, and genetic information.

Unlawful Conduct

The FHA outlaws certain rental practices if based on race, color, religion, national origin, sex, disability, and familial status, including:

Refusal to rent or negotiate for housing;

Making rental housing unavailable;

Using different qualification criteria or applications, such as income standards, application requirements, application fees, credit analysis, or rental approval procedures;

Setting different terms, conditions, or privileges for the rental of housing, such as different lease provisions related to rental charges, security deposits, and other lease terms;

Providing different housing services or facilities, or denying access to community facilities;

Failing to provide or delaying maintenance or repairs;

Falsely denying that housing is available for inspection or rental;

Discouraging the rental of a unit by exaggerating drawbacks or saying that the prospect would be uncomfortable or incompatible with existing residents;

Assigning residents to a particular section of a community or floor of a building;

Threatening, coercing, intimidating, or interfering with anyone exercising a fair housing right or assisting others who exercise that right; and

Making, printing, or publishing any statement that indicates a preference, limitation, or discrimination (which applies to single-family and owner-occupied housing otherwise exempt under the FHA).

Additional Requirements Related to Disability

The FHA has three additional prohibited practices to protect individuals with disabilities:

Refusal to allow reasonable modifications to the unit or common use areas, at the applicant or resident's expense, if necessary for the individual with a disability to fully use the housing;

Refusal to make reasonable accommodations in the rules, policies, practices, or services if necessary for the individual with a disability to fully use and enjoy the housing;

Failure to meet the following accessibility requirements in the design and construction of rental housing with four or more units that were first occupied after March 13, 1991:

  • Accessible entrance on an accessible route;

  • Accessible common and public use areas;

  • Doors sufficiently wide to accommodate wheelchairs;

  • Accessible routes into and through each dwelling;

  • Light switches, electrical outlets, and thermostats in accessible locations;

  • Reinforcements in bathroom walls to accommodate grab bar installations; and

  • Usable kitchens and bathrooms configured so that a wheelchair can maneuver about the space.

6 RULES TO ENSURE COMPLIANCE WITH FAIR HOUSING LAW

Rule #1: Establish a Written Fair Housing Policy

A written fair housing policy is a simple, low-cost strategy to avoid fair housing trouble. Having a written policy lets everyone—from your staff, to prospective and current residents, to fair housing advocates and regulators—know that you do not tolerate discrimination based on race, color, national origin, religion, sex, disability, familial status, or any other characteristic protected by state or local law.

Although the policy alone can't guarantee you'll never face a discrimination complaint, it's often the first document that fair housing officials look for when conducting an investigation. Having a policy in place—and featuring it prominently on your office walls, in your written marketing materials, in your application package, and in your operating policies and procedures—formally acknowledges your community's commitment to fair housing principles and practices. If you do have a problem, the policy sends a message that it's a rare exception—not a policy or practice in your community—an important defense strategy in FHA cases.

Rule #2: Maintain Written Procedures

Breathe life into your fair housing policy by implementing procedures to ensure that your community does not exclude or otherwise discriminate against anyone based on race, color, or any other characteristic protected under federal, state, or local law.

Having written policies and procedures—and applying them consistently—helps reduce the likelihood that your community will be accused of acting in a discriminatory or arbitrary manner while dealing with prospects, applicants, or residents. And if you ever face a discrimination complaint, the written procedures allow you to prove that—whatever the details of the complaint—your community acted in a consistent manner and you had legitimate business reasons for doing what you did.

In particular, the written procedures should reflect that your community does not make decisions about who lives there—or treat prospects, applicants, or residents differently—based on any characteristic protected under federal, state, or local law.

Advertising and marketing. Review your advertising and marketing to ensure that it does not imply any preference—for or against—anyone based on any characteristic protected under federal, state, or local law. The law outlaws both explicitly discriminatory statements—such as “No Children—and subtle suggestions that express a preference—such as using only white models—in online or print media as well as brochures or other marketing materials.

Application process. Your application procedures should explain the steps in the process and emphasize that your community applies reasonable, objective criteria to screen applications, such as credit and rental history requirements. Your policy should indicate whether your community uses an independent screening service, and how information about credit, income, employment background, and other screening criteria is obtained and used to determine when applicants are accepted. It also should describe how applicants are notified about approval or rejection of applications, and if an application is rejected, the reasons why and the source of that information.

Terms and conditions. The policy should reflect that everyone is subject to the same terms and conditions of tenancy, including financial requirements, such as fees and security deposits. It should cover procedures for requests for maintenance services to counter any claims that you delayed or denied maintenance services for discriminatory reasons. In describing standards of conduct, such as rules governing noise and the use of recreational facilities, it should be clear that the rules apply to all residents and do not unfairly prohibit or limit children's activities or use of facilities. The policy should also describe the consequences for residents who fail or refuse to abide by your standards of conduct, up to and including eviction.

Periodically review and update your policy and procedures. Schedule a time each year to get feedback from your staff on how to formally address any problems that arose during the year that aren't adequately covered in your current policy and procedures.

Rule #3: Provide Training to Employees

Employee training is critical to your fair housing program. Make sure your employees have a thorough understanding of your policies and procedures to ensure that they apply the rules consistently, regardless of race, color, and any other characteristic protected under federal, state, and local law.

Emphasize that employees must refrain from unlawful “steering—any comments or conduct that suggest a prospect should—or shouldn't—live in your community—or in a particular area within your community—because they have children or any other discriminatory reason. And to avoid claims that your community applied different terms and conditions for discriminatory reasons, instruct employees that they can't bend the rules for people they like—or apply the rules more harshly for people they don't.

Sometimes, fair housing claims are triggered by the perception of discriminatory motives, so make sure your training emphasizes basic “people skills” so that all employees know that they are expected to treat everyone in the same courteous and professional manner. Make sure they are prepared to respond to questions by prospects or applicants about the kind of people who live in your community by developing a standard answer that affirms your community's commitment to fair housing law.

Provide all employees—not just your leasing staff—with fair housing training. It's important to ensure that employees such as office personnel, maintenance workers, landscaping crews, pool attendants, and housekeeping staff understand the basics of fair housing law since any interaction with the public could lead to a fair housing problem. And with fair housing training, these employees will be better equipped to recognize and report a potential fair housing problem if they overhear or observe questionable comments or conduct by residents, other employees, or vendors.

COACH'S TIP: To minimize the risk of fair housing complaints triggered by misconduct by outside contractors, a staff member should explain your community's fair housing policy—including common sources of problems, such as sexual harassment—to all contractors who work at your community and give them a copy of the policy before they get started.

Rule #4: Designate a Fair Housing Coordinator

Appointing a staff member as your community's fair housing coordinator can greatly enhance your compliance efforts. Once you make sure the staff member is well trained in fair housing matters, she can act as your in-house expert to oversee employee training, answer questions from other staff members, and handle tricky fair housing matters, such as accommodation requests and complaints by or about applicants or residents.

In arranging for formal fair housing training, the coordinator should evaluate which of the various forms of training—such as off-site seminars, on-site experts, or online programs—will best suit your community's needs. After scheduling the training, she can monitor employee attendance to make sure that all employees receive periodic training. If new employees are hired before the next formal training session, the fair housing coordinator's duties include explaining the basics of fair housing requirements to new hires—a must, according to fair housing experts—before they interact with the public.

On a day-to-day basis, the fair housing coordinator is the one who is available to field questions from other employees about fair housing issues. With proper training, the fair housing coordinator will be able to answer many questions—or know where to go to find the answers to complicated questions, such as state or local apartment associations, local fair housing agencies or organizations, or your attorney.

Finally, the fair housing coordinator will be tasked with handling all fair housing matters, including accommodation and modification requests, discrimination complaints, and complaints about neighbors, staff, or community policies. Among her duties may be to talk to the applicant or resident, compile information needed to evaluate requests or investigate complaints, and work with senior management or legal advisors to resolve the matter.

COACH'S TIP: Encourage the fair housing coordinator to contact your attorney for guidance as soon as it appears that you could have a fair housing problem on your hands. These days everyone is trying to keep expenses to a minimum, but it's less costly to get legal advice to resolve potential problems at an early stage rather than to mount a defense after a formal discrimination complaint is filed. Your attorney is a valuable resource who can help you negotiate your way through complicated fair housing issues, such as responding to accommodation or modification requests, and to keep you updated on changes in state and local law.

Rule #5: Be Careful with Accommodation and Modification Requests

Disputes over parking spaces, support animals, and structural changes often lead to discrimination complaints. The rules are complicated, so it's a good idea to take special care when handling accommodation and modification requests from individuals with disabilities. We'll review the basics, but you'll need to dig deeper in particular cases to ensure that you respond properly.

HUD guidelines state that an applicant is not entitled to a reasonable accommodation or modification unless he asks for one, but the law does not require that the request be made in a particular manner or at a particular time. In general, a resident or applicant makes a reasonable accommodation request whenever he makes it clear that he is requesting an exception, change, or adjustment to a policy, practice, or rule because of a disability. Similarly, a request for a modification occurs whenever it's clear that the applicant or resident wants to make a structural change, at his expense, to the interiors or exteriors of the unit or to common or public use areas because of a disability. The request need not come directly from the person with the disability; the request may be made by a family member or someone acting on his behalf.

HUD acknowledges that the FHA does not require communities to adopt any formal procedures for accommodation or modification requests, but the agency says that written procedures can help housing providers by preventing misunderstandings about the nature of the request and, in the event of later disputes, provide records that the request received proper consideration. Nevertheless, communities must consider a request even if the applicant or resident does not use your preferred forms or procedures for making such requests.

Ideally, your policy should detail the procedures for receiving, evaluating, and resolving accommodation and modification requests. But make sure that your procedures, including any forms used, do not run afoul of HUD rules on the type of disability-related information that you may—and may not—request for the purposes of evaluating an accommodation or modification request.

In general, an individual is entitled to a reasonable accommodation or modification when there is a clearly identifiable disability-related need for the requested accommodation or modification. If both the disability and the disability-related need for the requested accommodation or modification are apparent, then the community may not ask for further information without violating the general rule outlawing disability-related inquiries. If, however, either the disability or the disability-related need for the requested accommodation or modification is not apparent, communities may request certain disability-related information needed to evaluate the request.

In addition, the law requires that the requested accommodations or modifications must be reasonable. When it comes to reasonable accommodations, communities may not deny the request simply because it may involve some costs—or demand extra fees or deposits as a condition of granting the requested accommodation. In general, an accommodation request is not reasonable if it would impose an undue financial or administrative burden on the community or would fundamentally alter the nature of the community's operations. Nevertheless, determining whether a requested accommodation is unreasonable should be made on a case-by-case basis, and only after the community engages in an “interactive process” to discuss whether there is a reasonable alternative that would effectively address the resident's disability-related needs without excessively burdening the community.

With respect to modification requests, HUD lists examples that typically are reasonable, such as widening doorways to make rooms more accessible for people in wheelchairs, installing grab bars in bathrooms, lowering kitchen cabinets to a height suitable for persons in wheelchairs, adding a ramp to make a primary entrance accessible, or altering a walkway to provide access to a public or common use area. As long as there is a disability-related need for requests such as these, the law generally requires the community to permit the modification, and the resident is responsible for paying the cost of the modification.

Rule #6: Keep Good Records

In some ways, good recordkeeping is like a good insurance policy—it's there to protect you if, despite your best efforts to be careful and obey the rules, you run into a problem. The records are there to prove that you treated prospects, applicants, and residents fairly and consistently—and that you had legitimate, nondiscriminatory reasons for any decisions that you made.

Maintain uniform, detailed records of every contact with prospects and applicants, including logs of telephone calls and in-person meetings. If a showing occurred, you should have records detailing when it occurred, what units were available, and what units were shown. In addition, you should keep copies of documents compiled during the application process, including the application and accompanying documentation, screening results, notices of approvals or denials, and notes of phone and personal conversations.

Resident files should include any contact between the resident and the staff, including any complaints by or about the resident. In the file, document how you investigated the complaint and what you did to resolve it. In addition, keep good records related to maintenance and repair requests, such as a log with the date and time you received the request, when your staff responded, and how it was resolved.

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April 2010 Coach's Quiz

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