This month, we will tell you how to deal with a HUD investigation based on a complaint that you or your community discriminated against someone protected by fair housing law.

These days, filing a fair housing complaint is easy. On the HUD Web site, www.hud.gov, one can find complaint forms to fill out online or to download and mail in, as well as phone numbers to call to file a complaint. Dealing with a complaint once it is filed against you or your community, though, is not quite as easy.

In this month's lesson, we will give you eight rules to help guide you if you find yourself or your community the target of a HUD fair housing investigation. For the purposes of this month's lesson, we will refer to the person who files the complaint with HUD as the complainant. At the end of our lesson, you can take the Coach's Quiz to see how much you have learned. And you can copy and distribute the “At a Glance” box on the last page so you and other staff members at your community will have a quick reference to help you remember and comply with the rules.

WHAT DOES THE LAW SAY?

The Fair Housing Act (FHA) makes it illegal to discriminate against prospects and residents based on their race, religion, national origin, color, sex, disability, or familial status. Since every prospect, applicant, and resident will fall into one or more of these categories, anyone who comes to your community to inquire about renting or buying is protected by the FHA. Thus, any prospect, applicant, and resident could be a potential complainant in a HUD fair housing investigation.

You will learn that HUD is investigating you or someone in your community when you receive notice from HUD. HUD's notice typically will specify the name and address of the person or people who are complaining of discrimination; the name and address of the owner, manager, or other person accused of committing the fair housing violation; the address and description of the location where the alleged violation took place; and an account of the alleged violation.

HUD will send you a copy of the complaint against you within 10 days of receiving it. HUD then has 100 days to investigate the complaint, although the agency frequently extends that deadline. HUD will investigate whether there is “reasonable cause” to believe that a violation occurred. During the investigation, HUD may interview people at your community, such as staff, residents, or others, and may ask you for documents and information.

The agency will attempt to arrange a settlement between the apartment resident or prospect and the owner. If the parties don't settle and HUD finds there is reasonable cause to believe that a violation occurred, HUD will issue a formal charge. Then an administrative hearing or trial on the charges will take place.

If HUD finds there is no reasonable cause to believe that fair housing law has been violated, the complaint will be dismissed. Either way, HUD will issue a report summarizing its investigation.

Thus, a HUD fair housing investigation could eventually result in no charges being brought against you and your community. Or it could end up costing you thousands of dollars in defending against a lawsuit, as well as in settlements, fines, penalties, and corrective actions, such as training.

Coach's Tip: You have 10 days from receipt of the notice of the complaint to file a response, commonly known as an answer. Filing an answer with HUD is not required, though, and you will not be penalized if you don't file one. Some attorneys think it is not necessary to file an answer in every case. Consult your attorney before you decide whether to file an answer.

8 RULES TO HELP YOU HANDLE A HUD FAIR HOUSING INVESTIGATION

Here are eight rules to help you prepare for and respond to a HUD fair housing complaint and the investigation that follows.

Rule #1: Keep Detailed Records

The first thing you should do when you receive a complaint from HUD is find out exactly what happened between your office and the complainant, says Avery Friedman, chief counsel of the Fair Housing Council of Northeast Ohio. Having a good record-keeping system will go a long way toward helping you achieve that goal.

You should maintain a record of every prospect who inquires into residing at your community. The recording system you use should be uniform, and the records should be detailed. You should establish a procedure for your rental office staff that includes opening a file every time someone inquires about renting an apartment in your community. And you should make sure your staff is aware of and uses this procedure.

You should have standardized forms for your rental office staff to fill out for every contact they have with a prospect. These forms should include, at a minimum, a telephone log; an in-person meeting log; a summarized document of every conversation, whether in person, on the telephone, or online; and a document for detailing every action taken regarding that inquiry.

The more contact you and your staff have with a prospect, the more information the records should contain. If the only contact your rental office staff ever has with a prospect is a telephone conversation about apartment availability, the records for that contact will be minimal. However, once a prospect becomes an applicant, there will be more conversations and meetings, including apartment showings. All of these events should be detailed in the applicant's file kept by your rental office.

Any staff member who has had contact with the prospect or applicant should detail the encounter. If a showing occurred, the record should specify when, what apartments were available, and what apartments were shown. It is important to summarize the conversation in which the applicant specified what kind of apartment he was looking for.

All copies of documents pertaining to that applicant should be kept in your files. This includes any documents the applicant provides, as well as those the applicant fills out for you.

Once an applicant becomes a resident, every contact between the resident and the staff should be documented and kept in the resident's file. This includes requests for maintenance, updated leases, and financial information. Also, any complaints by or about the resident should be recorded and kept in his file.

Example: A prospect complains to HUD that your rental staff discriminated against him based on familial status. He had asked to see two-bedroom apartments in your community for him, his wife, and their two children, and your staff showed him only one two-bedroom apartment in the basement. If your staff is keeping proper records, you will be able to look at that prospect's file and see that your staff showed the complainant that two-bedroom basement apartment because it was the only apartment available in your community at the time that fit his preferences.

Coach's Tip: Include record-keeping in your rental staff's initial training, and review the procedures in periodic training sessions. Your office's forms should be reviewed and updated regularly, too. Have staff members date and sign the forms after filling them out. That way, you will know which staff member to speak to if HUD notifies you of a fair housing complaint. Your staff should also note the names of witnesses, whether they are the prospect's friends or family members, or other staff members.

Rule #2: Start Your Own Investigation Immediately and Get the Facts

Once you receive notice from HUD that you are being investigated for a violation of fair housing law, you need to learn as much as possible about what you are dealing with before you can decide what your next step will be. Since fair housing complaints can be filed as long as a year from the date of the occurrence, your investigation could go way back into past activities at your community.

First, you must read the complaint and find out exactly what you or your community is accused of doing in violation of fair housing law. You can determine these basic facts from the complaint: who is making the accusation, what the accusation is, when and where the alleged act occurred, and how it allegedly occurred.

You will have to investigate the facts surrounding the complaint so you can decide whether to settle or proceed to trial. Once you know what you are accused of and what HUD will be investigating, you will need to look at your records. After reviewing them, you should know the basic facts. At a minimum, your records should tell you who on your staff dealt with the complainant, how many times, and what involvement they had.

After gathering all the key documents, you should create a list of the people who witnessed or may have witnessed the event, and interview each one of them. Remember, a witness does not have to be an expert. A witness is someone who has information you want. For example, you may want to interview your management staff. You may also want to talk to other prospects, such as all of the other families who were shown the basement two-bedroom apartment.

Example: If a resident has complained to HUD that she was sexually harassed by a maintenance worker, your records should show when the complainant requested maintenance, the nature of the request, who responded, how often, and how the request was resolved. If more than one maintenance worker provided service, these records may direct you to a potential witness.

Friedman recommends that you speak to your employees and get basic information before you respond to the HUD complaint. Don't call HUD back before you have the basic facts; that would be a waste of your time and HUD's.

By law, HUD has 100 days to complete its investigation, but HUD can extend that deadline, says Robin Hein, an Atlanta attorney who regularly defends apartment owners and managers in fair housing complaints. To meet the deadline, HUD may offer conciliation (that is, a settlement) between the complainant and you or your community.

The only way to know whether conciliation is a good choice for you and your community is if you know the facts. If your investigation shows that the complainant's claims could not have happened or didn't happen, you would want to know that before you take any steps to resolve the complaint. On the other hand, if your investigation shows that someone on your staff has repeatedly violated fair housing law, you might decide to conciliate, or settle, early to avoid further liability later.

You can't make any informed decisions about the investigation unless you know what the facts are. The more you know, the easier it will be to work with the HUD investigator and resolve the complaint, says Friedman.

Rule #3: Appoint a Fair Housing Officer

If you don't already have a fair housing officer for your community, you should appoint one, advises Friedman. The fair housing officer handles training, record-keeping, and procedures, and would be the person to turn to when you find yourself or your community the subject of a fair housing complaint.

The fair housing officer should be able to take charge of your investigation. She will know what HUD is looking for with regard to your community's procedures and records, and can expedite your community's investigation of the complaint and your responses to HUD.

Rule #4: Cooperate with HUD

HUD is not your enemy. The HUD investigator is not an arm of the complainant, and he is not out to get you.

The HUD investigator's job is to determine whether there is reasonable cause to believe that fair housing laws have been violated. To that end, the HUD investigator should be fair to both you and the complainant. Cooperating with HUD will make things go more smoothly. That does not mean, however, that you should proceed without trying to present the facts in a light most favorable to you and your community.

You should not waste the HUD investigator's time. Don't initiate a meeting with the investigator, because he has his own timetable, advises Theresa L. Kitay, fair housing attorney and trainer, and a former senior trial attorney for HUD. And conciliation discussions will usually occur over the telephone, according to Kitay.

Coach's Tip: HUD is required by law to offer conciliation, advises Kitay. Though the offer is usually made at the beginning of the process, to save time and money, it is available throughout. Conciliation can be a good tool for resolving the right kind of case, says Hein.

Often, a HUD or state enforcement agency investigator knows that the complainant does not have a particularly strong case, and sees conciliation as a way to clear the file. At times, Hein has offered the complainant, through the HUD mediator, a small settlement and a statement of no liability on behalf of his client.

This means that the owner, manager, or community does not admit to any violations, but is willing to settle in order to end the investigation and/or to avoid the risk of greater liability later on.

Rule #5: Evaluate Your Case

After you have finished your own investigation, you can evaluate the strength of your case so you can decide what to do. You may find that the complaint is without any factual basis, or you may discover that one of your staff members has violated fair housing law. These facts will help you decide whether to settle the matter or risk HUD's filing a formal charge that could result in a trial.

If you decide that you want to resolve the complaint by conciliation, you should do so as early as possible to save time, money, and energy, advises Friedman. Conciliation could involve a cash payment or something else, perhaps even offering the complainant the next available apartment that meets her preferences.

Remember, if HUD finds, at the end of the investigation, that there is no reasonable cause to believe that a fair housing violation was committed, the complaint will be dismissed. Your decision to make a settlement offer will come down to a business decision about financial risks and costs.

Rule #6: Speak with an Attorney Before Settling

Attorneys are divided on when, if ever, you should seek legal counsel in the course of a HUD fair housing investigation. Hein says you should always seek an experienced fair housing attorney's advice at the outset, before answering a fair housing complaint. Other attorneys say that if you are comfortable handling the initial stages of the investigation without an attorney, you should do so. All agree, however, that you should not enter into any resolution of the complaint or settlement without consulting an attorney.

Hein notes that if the complaint concerns the FHA's disability design and construction requirements, you should speak with an attorney immediately because of the technicalities involved and the potential for exposure to thousands of dollars in liability.

Rule #7: Don't Retaliate

It is illegal to retaliate against prospects, applicants, or residents who file fair housing complaints—even if the complaint is weak or without validity. The FHA specifically states that owners may not “coerce, intimidate, threaten, or interfere with any person” who is exercising her legal rights “or on account of his having aided or encouraged any other person in the exercise or enjoyment of” his legal rights.

Retaliation can take many forms. It could be an attempted eviction, a refusal to provide services, sabotage of existing services, or a rent increase. Anything that could be viewed as coercion, intimidation, a threat, or interference amounts to retaliatory behavior. Whatever form retaliation takes, it can be costly if you are found guilty of doing it.

Example: When a single woman inquired about and then rented an apartment, the building owner made unwanted sexual advances. This behavior continued until the woman finally filed a complaint with HUD. After being notified that HUD was investigating him for sexual harassment in violation of fair housing law, the owner notified the woman that she was being evicted.

The HUD administrative law judge ruled that the eviction was in retaliation for the fair housing complaint, and ordered the owner to pay the woman more than $32,000 in damages and penalties [HUD v. Krueger].

Retaliating against someone, such as another resident or an employee, who advised a prospect or resident to file a complaint is also an FHA violation.

Example: Resident A of your community overhears a member of your staff making offensive racial remarks to Resident B. Resident A advises Resident B to file a fair housing complaint with HUD, which Resident B does. Retaliating against Resident B for filing the complaint or against Resident A for urging Resident B to file would be a violation of fair housing law.

Finally, the underlying complaint does not have to be valid for a retaliation complaint to be valid, according to Kitay. Suppose one of your staff members advises a resident to file a fair housing complaint with HUD. HUD does its investigation and decides the complaint is unfounded, so HUD will not file charges. Retaliating against the staff member is a fair housing law violation, even though the underlying complaint was unfounded.

Rule #8: Evict Complaining Resident if Justified and Prudent

A resident who has filed a fair housing complaint may violate his lease during the course of the HUD investigation. Should you avoid trying to evict the resident because you fear a retaliatory eviction claim?

If the resident has violated the lease by not paying rent, suing to evict him while HUD is investigating will generally not be considered retaliatory—as long as you have records proving the nonpayment and your consistent enforcement of your payment rules.

However, you could run into trouble if you sue to evict a late-paying resident who has filed a complaint when you have accepted late rent from that or other residents in the past. If you have been lenient in the past, it will look bad to suddenly hold a resident's feet to the fire for being late with the rent.

If the basis for eviction is something other than nonpayment, proceed with more caution. Generally, don't try to evict a resident for a minor lease violation. You should try to evict a resident who has filed a fair housing complaint only if she is threatening the health, safety, or “quiet enjoyment” of other residents and you have a full file of records to prove it.

You will have to show HUD that you are not seeking revenge against the resident for filing the complaint. Nadeen W. Green, senior counsel at For Rent Magazine, says that could be very tough unless you have a solid case showing that:

• The resident has committed a serious lease violation; and

• You have a consistent policy of evicting residents for committing these violations.

To prove your case, you should have the following records on file:

Police reports. These serve as a strong, independent verification of the resident's behavior.

Written warnings. These show that the eviction is tied to the earlier warning, not to the resident's fair housing complaint.

Other residents' complaints. These can be used as additional proof of the resident's unruly behavior.

Records of other evictions for similar behavior. These show that you evict all such violators, not only those who file fair housing complaints.

Coach's Tip: If a resident has filed a fair housing complaint against you, never try to evict the resident without first having your attorney review your case, advise Kitay and Hein. The risks of being accused of a retaliatory eviction are too high if you don't handle the case correctly.

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

• HUD v. Krueger: HUDALJ 05-93-0196-1 (6/7/96).

Coach Sources

Raymond Cartwright: Chief Security Officer, Director of Housing and Commercial Property Div., Pennsylvania Human Relations Commission, 301 Chestnut St., Ste. 300, Harrisburg, PA; 17101-2702; (717) 787-4055; rcartwrigh@state.pa.us.

Avery Friedman, Esq.: Chief Counsel, Fair Housing Council of Northeast Ohio, 850 Euclid Ave., Ste. 705, Cleveland, OH 44114; (216) 241-FAIR; averyfriedman@fairhousingtraining.com.

Nadeen W. Green, Esq.: Senior Counsel, For Rent Magazine, 294 Interstate N. Pkwy., Ste. 100, Atlanta, GA 30339; (770) 434-6347 ext. 3003; nadeen.green@forrent.com.

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

Theresa L. Kitay: Attorney at Law, 578 Washington Blvd., Ste. 836, Marina del Rey, CA 90292; (310) 578-9134; tkitay@kitaylaw.net.

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TIME OUT!

The FHA requires HUD to refer cases that have been filed with them, with few exceptions, to state and local agencies charged with enforcing “substantially equivalent laws,” advises Raymond Cartwright, chief security officer in the Housing and Commercial Property Division of the Pennsylvania Human Relations Commission. This means there is a good chance that you will deal with a state or local agency if a fair housing complaint has been filed against you. The procedures and rules are similar, and the rules in this lesson apply to all fair housing investigations. However, many state and local agencies require you to file an answer, notes Cartwright. Check with the agency investigating the complaint to find out what its particular requirements are.

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