A Fair Housing Complaint—Now What?

In this month’s lesson, the Coach reviews what happens if someone files a fair housing claim against you. It’s probably not a regular occurrence at your community, so you may be taken aback and not know what to do, particularly if you’ve never or only rarely received a formal fair housing complaint.

When the complaint arrives, you may be suspicious—even outraged. You’ve probably put in a lot of time and money into your compliance efforts, so it may seem hard to believe that you or your staff has done anything to violate fair housing law. It may seem unfair that you have to devote time and money to deal with what may be a frivolous complaint—or worse, an effort to make a quick buck at your expense.

Whatever your initial reaction, don’t let it affect how you handle a fair housing claim. It’s bad enough to get a formal complaint, but you could make matters worse if you mishandle your response or retaliate against the person who filed the claim against you.

Remember, your efforts to comply with fair housing law aren’t wasted just because you’ve been named in a complaint. Investing the time and effort in developing policies and training staff will help ward off claims, but it can’t provide 100 percent protection against ever facing a complaint.

Even if you dot all the “i’s” and cross all the “t’s,” you can’t prevent a discrimination claim, explains fair housing attorney Robin Hein. “But it does mean that you should have all the documentation and evidence needed to mitigate or minimize the damages, and win the claim,” he says.

In this month’s lesson, we’ve compiled some FAQs—frequently asked questions—about the fair housing complaint process. We’ll cover the different types of fair housing complaints, who may file them, and how they are resolved, so you’ll know what to do—and what NOT to do—if you or your community faces a fair housing complaint. Finally, you can take the Coach’s Quiz to see how much you’ve learned.

WHAT DOES THE LAW SAY?

The Fair Housing Act (FHA) is a federal law that prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin, and disability. In addition, nearly all states and many local governments have adopted their own fair housing laws, some of which go beyond federal requirements to cover age, marital status, and sexual orientation, to name a few additional protected characteristics.

13 FAQS ON THE FAIR HOUSING COMPLAINT PROCESS

FAQ #1: Who can file a fair housing claim?

Complaints may be filed by an “aggrieved party”—anyone who claims to have been injured by a discriminatory housing practice. That includes individuals like prospects, applicants, and residents, as well as private advocacy groups, which may file fair housing claims on their behalf. In some cases, private advocacy groups may file claims of their own based on the results of fair housing testing.

HUD may file what’s known as a “Secretary-initiated complaint” when it has received an individual complaint, but believes that there may be additional victims of the discriminatory act or wants to obtain broader relief in the public interest. Even in the absence of a formal complaint by an aggrieved party, HUD may file a Secretary-initiated complaint when its own investigation indicates that a discriminatory housing practice has occurred or is about to occur.

State and local government agencies also may file fair housing claims on behalf of an aggrieved party or on its own to protect the public interest.

FAQ #2: Who can face liability for a fair housing violation?

Owners, managers, and employees all may be named in fair housing claims. Each may be liable for violating fair housing law based on their own discriminatory statements or actions.

Owners and managers also face a second level of liability for fair housing violations. They may be held liable not only for their own discriminatory activities—such as adopting or enforcing discriminatory policies—but also for discriminatory conduct by employees or agents working on their behalf.

FAQ #3: How are fair housing claims filed?

There are basically two types of fair housing claims: One is an administrative complaint filed with HUD or its state or local counterpart; the other is a civil lawsuit filed in a state or federal court. It can get confusing because both start with a “complaint,” but the procedures involved in these two types of claims are very different, explains Hein. If you’re named in an administrative complaint with HUD, you’ll get notice by mail; if it’s a lawsuit, then you’ll be served by a deputy sheriff or process server.

Filing an administrative fair housing complaint essentially triggers an investigatory process, he says. The end result of the investigation is a final investigatory report that doesn’t conclusively close the case. Unless the complaint is dismissed, the administrative process will end either with a “charge”—a finding that there’s enough evidence to believe that discrimination could have occurred—or with a dismissal. Issuance of a charge means there’s sufficient evidence to find that discrimination occurred, but it doesn’t mean that discrimination did in fact occur. It doesn’t make you liable for a fair housing violation, but it can be used against you in later proceedings. Issuance of a dismissal ends the administrative complaint and investigation in favor of the community owner, manager, or employee.

The other option—filing a lawsuit—means that the claim goes through the court system to determine liability for a fair housing violation.

The aggrieved party (an applicant, resident, or fair housing organization) may choose either option, though administrative complaints are often the first step of most fair housing claims and focus mainly on investigation, says Hein. The law requires administrative complaints to be filed within one year of the last discriminatory act; the deadline for filing a lawsuit in court is two years.

Nevertheless, aggrieved parties may bypass the administrative process and go directly to court. Under the FHA, aggrieved parties are not required to file an administrative complaint with HUD before filing a lawsuit in court, though there may be different rules for claims filed at the state or local level.

Furthermore, the two options are not mutually exclusive, so a resident could file an administrative complaint and sue you in court, though there are rules to prevent them from being heard at the same time or result in double recovery for the same violation.

FAQ #4: How should we treat the person who filed the complaint?

Take special care to avoid even the appearance of retaliation against anyone who has filed a fair housing complaint against your community. Under the FHA, it’s unlawful to “coerce, intimidate, threaten, or interfere with” anyone for exercising his rights under fair housing law—and anyone who has helped or encouraged someone to do so.

Get legal advice before taking any adverse action against a resident who’s filed a complaint (like terminating his lease), because it could lead to a separate charge of retaliation. The FHA considers retaliation to be a separate offense, which means that you could be found liable for retaliation, even if the initial discrimination claim is ultimately found to be groundless.

By the same token, you should be careful about how you treat employees or other residents if you find out that they helped someone to file a fair housing complaint against you. The FHA’s retaliation provisions prohibit coercion, intimidation, or interference with anyone who aided or encouraged any other person in the exercise of her fair housing rights.

FAQ #5: What’s the process for filing an administrative complaint?

The administrative process starts when an aggrieved party files an administrative complaint with HUD, the federal agency responsible for enforcing the FHA.

The complaint requires basic information, including the names and addresses of the parties, the location of where the allegedly discriminatory action occurred, a short description of what happened, and the date of the alleged violation. Complaints may be filed in person, by telephone, through the mail, and online through the agency’s website, or using HUD’s new mobile app.

Complaints may also be filed with state or local government fair housing agencies. Most states have fair housing laws that are “substantially equivalent” to the FHA. The aggrieved party may file either with the state, HUD, or both. Complaints originally filed with HUD are often referred to the state or local agency. HUD and equivalent state and local agencies follow similar, though not identical, procedures for handling complaints, according to HUD.

In cases filed with HUD, the agency will review the complaint to determine if it meets certain minimum standards. If it does, HUD will accept the complaint.

FAQ #6: When do I find out about the complaint—and what should I do?

You should receive notice from HUD within 10 days after the complaint has been accepted. The HUD investigator sends the notice to all the “respondents”—that is, all parties accused of discrimination, including community owners, managers, and employees. The notice, which comes by first-class mail with return receipt requested, identifies the alleged discriminatory housing practice and explains procedural rights and obligations with a copy of the complaint. The notice from HUD may also contain discovery requests called “interrogatories” and “requests for production of documents.”

If you receive notice of a HUD complaint, it’s important to take it seriously. Don’t ignore the complaint or treat the HUD letter lightly, warns Hein. You should immediately notify your supervisor and the corporate office about the complaint. Get your attorney involved and contact risk management for evaluation and submission to any insurance carriers who may provide coverage, Hein says.

Meanwhile, you should pull the resident file or application to start working on a timeline or chronology of what happened. Many times, the community manager is aware of the underlying facts related to the complaint because there was conflict or difficulty associated with the rental application or lease, Hein explains.

You’ll have to act quickly since respondents should file an answer within 10 days of receiving the notice. Though it’s not required under federal law, Hein recommends filing an answer within that time since the FHA requires owners and managers to cooperate in responding to HUD investigations.

Don’t try to write back or respond to HUD on your own—have your attorney handle it, he warns. Remember what they say in TV crime dramas: “Whatever you say can and will be used against you.” It may not be a criminal matter, but that maxim applies here: You may inadvertently say something that isn’t accurate in the context of what occurred—or that makes matters worse.

Hein has seen that happen when landlords try to handle things themselves but make admissions in their initial response that cannot be undone or explained away very easily. For example, there may be a disconnect between the corporate office and rental office: A corporate-level regional property director may think that there are no real written rental qualification procedures and put that in the HUD response when in fact the on-site manager has a written set of rental criteria that she has always used at the property. It could also be just the opposite: The community manager responds with a misstatement without first running it by corporate or her supervisor at the regional level.

Coach’s Tip: Formalized reporting procedures are important, Hein says. Make sure they’re covered in training and included in the management’s operating policies and procedures under the section on “What to do if you have a lawsuit or housing discrimination complaint.”

FAQ #7: What happens during a HUD investigation?

The next step is a HUD investigation to determine whether there is reasonable cause to believe that a discriminatory housing practice has occurred. Among other things, the investigator (from HUD or state/local partner agency) may interview the parties and witnesses, obtain and review relevant documents, and conduct on-site investigations, when appropriate.

Whatever you do, don’t alter or try to dispose of documents related to the applicant or resident, or tell your staff or others that they shouldn’t cooperate in answering HUD’s questions.

Don’t be surprised when the investigator sends you discovery requests—long lists of questions to answer and documents to produce—even if you’ve filed a response denying the alleged discrimination. If you ignore the request and don’t respond at all, Hein warns that federal or state enforcement officials have the power to issue subpoenas and compel attendance to investigate the matter. Nevertheless, he says that you shouldn’t give statements or documents to the HUD investigator without the assistance of counsel.

HUD investigations are supposed to be completed within 100 days, but they often take longer. HUD says it’s generally impracticable to complete an investigation within 100 days when a complaint involves a great number of witnesses, large volumes of evidence, or particularly complex claims and evidence.  

FAQ #8: What is conciliation?

During the investigation phase, the law requires HUD (or its partner agency) to try to work out a settlement through a process known as “conciliation.” Settlements may include monetary payments to the aggrieved party, civil penalties to the government, or doing things like changing policies or providing fair housing training to your staff. If the parties reach an agreement, HUD will close the complaint.

Don’t rule out a settlement, even if you think you didn’t do anything wrong and the resident is just trying to harass you. You may be right (that you didn’t do anything wrong), but you could be wrong—confusing what you think the law should be, rather than what the law actually says. Either way, Hein says it ignores the realities of how the legal system works and closes off the most efficient way to respond, settle, or end the complaint.

For example, Hein says many owners or managers will take a strong position saying, “We didn’t do anything wrong, and we are not going to pay a dime to this tenant.” So, they stand on principle instead of evaluating their options and the cost of each. They may feel that making any settlement offer is a sign of weakness and only encourages more claims in the future “once the word gets out.”

But that approach is counterproductive because these cases are often settled easily with minimal out-of-pocket payments. Hein has seen cases where there was a risk to the owner or management and all the resident really wanted was to move out and avoid having the landlord come after him for a collection claim or put it on his credit report or give the next landlord a bad reference. The cost and risk in defending these cases can be considerable, he says.

FAQ #9: What happens if the case doesn’t settle through conciliation?

If the case doesn’t settle through conciliation, then the investigator completes the investigation and issues a final investigative report. Based on the results of the investigation, HUD will decide—one way or the other—whether there’s reasonable cause to believe that a discriminatory housing practice occurred.

If HUD finds there’s no reasonable cause to believe that discrimination occurred, then the complaint will be dismissed. But that might not be the end of the matter, because the applicant or resident still can file a private lawsuit even if HUD dismisses the administrative complaint.

If HUD finds that there was enough evidence to believe that discrimination occurred, then HUD will issue a determination of “reasonable cause” and charge the respondent (the community owner, manager, or employee) with violating fair housing law.

Though it’s not a conclusive determination of a fair housing violation, Hein says that the HUD charge leaves owners and managers in a very risky and vulnerable position because it can now be used as evidence against you in the next stage of the proceedings.

FAQ #10: What happens if HUD issues a charge?

Once a charge has been issued, the parties have a decision to make: whether to go forward with administrative proceedings or take the matter to court. Either party may elect to go to federal court, but the election must be made within 20 days. The procedure may be similar but slightly different if the case is being handled by a state enforcement agency.

If one of the parties elects to go to court, then the case will be handled by the Justice Department, which brings the case on behalf of the applicant or resident and the public interest. The applicant or resident also may request to have a private attorney represent his interests in court. Either party may request a jury trial.

Otherwise, the case goes on for a hearing by an administrative law judge (ALJ) within HUD (or its state or local counterpart). During the proceedings, a government attorney with HUD will represent the aggrieved applicant or resident, who may also have a private attorney to represent him.

FAQ #11: What is my best option if HUD issues a charge against me?

There is really no “best option” when deciding between whether to take the case to court or go forward with an administrative proceeding, so you should consult your lawyer about which option makes the most sense in light of your individual circumstances.

Electing to go to court will probably take longer and be more expensive. Either party can ask for a trial by jury, which may work against you since landlords often make unappealing defendants, says Hein. Remember, the HUD charge can be used against you, and if found liable for a fair housing violation, you could be ordered to pay punitive damages—in addition to compensatory damages—to the applicant or resident, along with her attorney’s fees and court costs.

Having the case heard by an administrative law judge is likely to be quicker and less expensive. If the case is heard by HUD, then you won’t face liability for punitive damages, though you could be ordered to pay compensatory damages to the applicant or resident along with civil penalties to the government. If the applicant or resident had a private attorney to represent his interests, you could be liable to pay for his attorney’s fees.

FAQ #12: What happens if the case goes to court?

If either party elects to go to court, a government attorney will file a civil lawsuit on behalf of the aggrieved person and the public interest. The applicant or resident also may hire his own attorney to represent his interests in court, although he won’t be able to recover his attorney’s fees if he loses the case. Aggrieved applicants and residents often get help from private advocacy groups, which may have staff attorneys or contacts with outside attorneys to represent them in fair housing claims.

After being served with notice of the lawsuit, you’ll have 30 days to file an answer. If you fail to do so, the court could order a default judgment against you—possibly closing off your opportunity to defend yourself in court.

Both parties are entitled to do “discovery,” a pretrial process designed to let both sides know what evidence the other side has in order to prevent surprises at trial. During discovery, the applicant or resident may request any documents you may have, ask you written questions, and take depositions, which means asking you or your witnesses questions under oath. Likewise, you can ask the same of the applicant or resident.

Often, cases are resolved by written motions presented to the judge, unless there are disputes about the facts that must be resolved at a trial. Many cases are settled prior to trial.

Otherwise, the court will conduct a trial. If the judge (or jury) rules against the applicant or resident, then the court will grant judgment in your favor. The court won’t require the applicant or resident to pay your attorney’s fees unless the suit was frivolous or filed in bad faith.

If the court finds that you violated fair housing law, you could be ordered to pay damages, civil penalties, attorney’s fees, and court costs. The court could also issue injunctive relief—a court order requiring you to do something—or stop doing something—to remedy or prevent discrimination.

FAQ #13: What happens if the case goes for hearing by an administrative law judge?

If neither party elects to go to court, then the case goes on for a hearing by a HUD administrative law judge, who will issue an initial decision. If the judge finds no violation of fair housing law, the case will be dismissed.

If the judge finds that housing discrimination has occurred, the judge can award a civil penalty to the government, actual damages to the aggrieved party, and attorney’s fees.

The losing party has the right to ask for a review of the judge’s decision by the HUD Secretary, who may affirm, modify, or overturn the decision. Afterwards, a party may appeal the Secretary’s decision in federal court.

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

COACH Source

Robin Hein, Esq.: Attorney at Law, Fowler, Hein, Cheatwood & Williams, P.A., 2970 Clairmont Rd., Ste. 220, Atlanta, GA 30329; (404) 633-5114; RobinHein@ApartmentLaw.com.

Resources

Hein, Robert P.: Georgia Apartment Law Book; Georgia Apartment Association, 2009 ed.

John Marshall Law School: A Layperson’s Guide to Fair Housing Law; July 2014.