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Fair Housing Defense

Information on and Compliance with the FHA

DOJ Announces an $850,000 Settlement to Resolve Multiple Race and Familial Status Housing Discrimination Lawsuits

Posted in Discrimination, FHA Basics

Think that the U.S. Department of Justice (DOJ) has lost interest in prosecuting Fair Housing Act (FHA) discrimination cases?  Think again.  Earlier this week, DOJ announced that two property owners in Ohio agreed to pay $850,000 to settle lawsuits filed by the DOJ as well as other private parties and Ohio state officials claiming that the defendants discriminated on the basis of race and familial status at properties they formerly owned.

The proposed agreement would conclude a DOJ complaint filed in 2011 alleging that the property owners discriminated against African Americans and families with children at three Ohio apartment communities.  The settlement would also terminate companion lawsuits raising similar allegations filed by Stark County, the Ohio Civil Rights Commission as well as a number of other former property managers and residents.   Indeed, in an order issued earlier this year, the judge noted that 10 former employees of the defendants had specifically testified that they were instructed to discriminate against African Americans and that other former employees told the judge that they been instructed to discriminate against families with children.  Accordingly, the court concluded that the DOJ had presented sufficient evidence of a pattern or practice of unlawful discrimination by the defendants for the case to go to trial before a jury.

Under the terms of the settlement, which still must be approved by a federal judge in Ohio, the defendants will pay:  $650,000 in damages and attorney’s fees to the plaintiffs in the lawsuits filed by the Ohio Civil Rights Commission, Stark County and several former residents and property managers;  $175,000 in damages to 11 additional former residents and employees identified by DOJ who had been harmed by the defendants’ discrimination; and a $25,000 in a civil penalty to the United States.

Because of the serious nature and scope of the allegations, the settlement also requires that the defendants hire an independent management company to oversee all of their rental properties, receive training on the requirements of the FHA and report to the United States for a period of three years on their compliance with the settlement.  The settlement also requires the defendants to hire a third party to periodically test their properties to ensure compliance with the FHA.

Make no mistake, the financial and reporting components here are higher than what would otherwise be typical in a FHA case.  Because of the pattern or practice allegations that DOJ believed it could prove at trial, it likely made the case much more expensive to resolve.   If you are unsure of your policies or want to check your compliance with the FHA, you might want to check with a lawyer like me.

Just A Thought.

DOJ Settles Another Familial Status Discrimination Case — This Time for $100,000

Posted in Disability, FHA Basics, Uncategorized

Last week, the Department of Justice (DOJ) announced that the owner and manager of an apartment community in Cleveland agreed to pay $100,000 to settle allegations of housing discrimination brought by families with children.

In the case, DOJ alleged that the defendants violated the Fair Housing Act (FHA) by following an illegal policy of refusing to rent apartments to families with children.  Additionally, the complaint alleged that the owner and manager had a policy of evicting tenants or asking tenants to move if they had a child or children while living at the community.  While FHA does contain an exemption to permit housing that is reserved for older persons under certain circumstances, this community did not meet the requirements for that provision in the law.

The settlement, which still must be approved by a federal judge before it is final, requires the defendants to pay $90,000 to victims of their discriminatory actions, and to pay $10,000 in civil penalties to the United States.   The agreement further mandates that the community remove any restrictions on occupancy by families with children, train its employees on the FHA and provide reports to DOJ to make sure that such discriminatory policies are not implemented in the future.

While there are always two sides to every story, this case is another cautionary tale that – in most cases – a professional apartment management company cannot simply refuse to rent to an applicant because he or she has a child or children.  To be sure, if you want to attempt to qualify your community as housing for older persons – you will really want to speak with a lawyer like me to help ensure your property can meet all of the tests in the law.

Just A Thought.

Are Victims of Domestic Violence Protected by the Fair Housing Act? The Likely Answer Will Not Surprise You.

Posted in Discrimination, FHA Basics

Last month HUD announced a settlement with the owners of two New Hampshire properties to resolve allegations that they engaged in housing discrimination for failing to rent to a woman who was a victim of domestic violence.  While victims of “domestic violence” are not a separate protected class under our Fair Housing Act (FHA), HUD now takes the position that this resident was discriminated against because of her gender (which, of course, is a FHA protected class) and, in addition, HUD looked to the federal Violence Against Women Act (VAWA) statute for additional protection as the VAWA was strengthened and reauthorized by Congress in 2013.

HUD’s view in this case was that the resident was a victim twice – first by the person who committed the acts of domestic violence against her and then by her apartment management team.  The allegations in the complaint included that management refused to renew a lease because the local police had responded to 911 calls concerning allegations of domestic violence.  A second complaint was filed when the woman could not get a lease from a new potential landlord, again because of the previous domestic violence visits by the police. Pursuant to the settlement agreements, the complainant will receive $13,550 from the named respondents and the landlords will participate in fair housing training as well as monitoring.

While I absolutely know that there are two sides to every story, the optics here just look bad for management.  If your leasing office learns of a situation in which a resident is a potential victim of domestic violence, the prudent course of action is to fully engage in the interactive process and work to find a solution.  Simply declining a renew a lease, without more, can lead to the need to speak with a lawyer like me.

Just A Thought.

A “Poor Door” — And The Fair Housing Risks Involved

Posted in Discrimination, FHA Basics

As new mixed apartment communities/buildings are constructed or rehabilitated across the country, one issue that is coming to light is what is being referred to as the “poor door” – a separate entrance for affordable housing residents.  Although a “poor door” has received governmental approvals, the concern is that the controversy surrounding its use will continue to increase as more similar housing projects are constructed.  What typically happens is a property is built with, for example, a separate door for market rate buyers/renters and a different door for affordable housing tenants.

The concern, of course, is if the affordable residents are being treated as “second class citizens” and those tenants are stigmatized in a manner which does not reflect how our fellow citizens should be treated under the fair housing laws.  The other side of the argument is that the developer would not have constructed the building at all without government assistance or incentives and, as such, the housing would not even exist.  I think it fair to report that this is yet another unanticipated issue that has arisen as governments partner with developers to seek creative solutions to increase the number of available, affordable housing units across the country.

In my view, while a “poor door” is not discriminatory on its face in violation of the Fair Housing Act (FHA), if the net impact of the “poor door” is such that protected classes are somehow singled out – there will be an argument that a “poor door” has a disparate impact on minorities and is therefore against the law.  I feel certain this practice will be challenged by both administrative complaints filed with HUD as well as in federal court.  If your project is one with a “poor door” — it may well ultimately be found lawful, but you most definitely will want to speak with a lawyer like me to help reduce the FHA disparate impact risk going forward.

Just A Thought.

Does the Fair Housing Act Apply When a Woman is on Maternity Leave? You Bet. Here is How.

Posted in Disability, FHA Basics

Over the past couple of months, HUD has announced two Fair Housing Act (FHA) settlements involving pregnancy and maternity leave that deserve mention in this space.  The cases involved similar fact patterns in which mortgage loans were denied or delayed to women because they were on maternity leave.  In the first case, a lender agreed to pay $48,000 after a married couple filed a HUD complaint alleging that the lender denied a refinancing application because the wife was on maternity leave.  The investigation revealed that the bank had done that same thing to four other applicants who were also on maternity leave.  In the second case, in which the defendant agreed to pay $25,000 to resolve the allegations, the lender asserted its mortgage insurance guidelines required the woman to have returned to work so as to count her income.  Nevertheless, the lender agreed to settle the case.

As a part of the settlements, both institutions further agreed to training and developing a policy to address borrowers on maternity leave or who are pregnant.

What do these cases mean for professional apartment management as we look to fill our units?  Ensure the proper screen is completed when running the credit check.  Make sure you do not unintentionally discriminate because a woman is pregnant or is on maternity leave such that there may be an issue with income qualification.  Indeed, part of this may be adopting a policy concerning calculating income when an applicant is pregnant, is on maternity leave, and/or paternity leave.

Just A Thought.

Federal District Court in Florida Dismisses Three Fair Housing Act Mortgage Cases

Posted in Discrimination, FHA Basics

Earlier this month, the U.S. District Court for the Southern District of Florida dismissed with prejudice the Fair Housing Act (FHA) claims in three suits filed by the City of Miami against large mortgage lenders Bank of America, Wells Fargo, and Citigroup.  In a nutshell, the city alleged the lenders engaged in predatory lending in certain less advantaged communities, that the allegedly predatory loans were more likely to result in foreclosure than were loans originated elsewhere, and that higher than average rates of foreclosures allegedly caused by those banking/mortgage practices unlawfully reduced the city’s tax base and thus increased the costs of providing important city services.

The district court judge, following recent precedent from the U.S. Supreme Court, concluded that purely economic injury is outside what is referred to as “the zone of interest” of the FHA. The court further noted that the “policy behind the [FHA]‘s emphasizes on the prevention of discrimination in the provision of housing” while the city’s alleged “economic injury from the reduction in tax revenue . . . [and] expenditures” in contrast is not impacted by membership in any protected class.  Accordingly, the judge wrote that the city’s claim fell outside the FHA’s zone of interest and the city lacked standing to sue.  The court went so far as to acknowledge a different conclusion by a district judge in California, but the court noted that it was required to apply the “zone of interest” test to the FHA claims.

The judge further noted that the city could not establish proximate cause because it did not allege facts that isolated the lenders’ practices as the cause of any alleged lending disparity, citing the independent actions of a multitude of non-parties during the recent financial crisis that “break the causal chain.” The court went on to reject the city’s statistical correlations as insufficient to support a causation claim. Finally, the court concluded that the FHA claims were time barred and that the continuing violation doctrine did not apply to extend the time limit.

Although not binding across the country, this opinion is useful to management as we interpret the FHA as requiring some sort of discrimination to be actionable as contrasted with simply allegations of economic harm.

Just A Thought.

Here is a Reasonable Accommodation Request Checklist

Posted in Disability, FHA Basics

Reasonable accommodation (or reasonable modification) requests from residents with disabilities can come in many different forms.  Here is a handy reasonable accommodation (or reasonable modification) request checklist for leasing office team members to use:

1.  A reasonable accommodation must be requested.  In other words, management cannot make the request for the resident.

2.  A reasonable accommodation request can be made at any time, by the person with a disability (resident or applicant), by a family member of the person with a disability, or by someone else who is acting on behalf of the person with a disability.  There is no maximum number of requests a resident can submit.

3.  A reasonable accommodation request does not have to be in writing.  It can be done orally or by any other effective method.  To be sure, my preference is that the leasing office receive requests in writing – but there is no requirement that a resident do so.

4.  There are no “magic” words.  As long as it can be determined that the resident has a disability, that he or she has made a request, and that the request is reasonably related to his or her disability – that is good enough.

5.  Management may request documentation to the extent necessary to verify the disability and how that disability is related to the reasonable accommodation or modification request.

6.  Do not seek confidential medical records of your residents.

7.  Disability verifications can come from a variety of medical, mental, physical, or psychological health care professionals.

As I have previously written, management must review each request.  We do not have to grant each specific request, but we must evaluate and use the interactive process to see what is reasonable.  Try to respond within a reasonable time.  Always respond in writing.  And keep a copy of our response in the resident’s file.

Just A Thought.

Things To Do On The Fourth of July

Posted in Uncategorized

Once a year here at the Fair Housing Defense blog I go off topic.  Today is that post.

Tomorrow is the Fourth of July.  Cookouts with family and friends.  Maybe a baseball game. (Indeed, I will be at the Nationals/Cubs game in Washington).  Fireworks.  A picnic.  A red, white, and blue parade.  Flags everywhere.  Everything that is right about America.   And a reminder just how lucky we are to live in this great country.  So:

If you see a member of the United States military, thank him or her for their service.  I do not pretend to understand the details of the political situations in Iraq and Afghanistan, but I know our soldiers have done everything asked, requested, and required of them.  And more.

If you are with your kids and see a police officer, remind your son or daughter that police officers work every day to keep us safe.

Similarly, if you go by a fire station, let your kids know that firefighters are the people who literally rush into burning buildings to get the rest of us out of them in an emergency.

Finally, if you have not spoken with your mother or father (or brother or sister) for a while, pick up the phone.  You should do it in any event, but particularly make a call today if there is a petty disagreement that has been lingering for too long.

You will be glad you did.

Just A Thought.

How Long is “Reasonable” to Respond to an Accommodation or Modification Request?

Posted in Disability

I am involved in a new matter right now involving a reasonable accommodation request.  As I have written any number of times, management must evaluate and consider every reasonable accommodation (and/or reasonable modification) request received from our residents/applicants.  No issue about that whatsoever.  The point that struck me as odd is that opposing counsel demanded management respond within 48 hours or they would deem the request denied and file a complaint.

To be sure, management needs to timely review and respond to all requests.  But, a self-imposed 48 hour deadline?  Seemed a bit unrealistic to me.  Which opens the door to the next question:  just what is reasonable?  There is no firm bright line in the law on that.  I have seen 10 days, two weeks, 15 days and 20 days all fall within the definition of “reasonable.”  And those time frames feel about right.  I certainly have never had a court, administative agency, or federal department mandate that 48 hours was the outside edge of “reasonable”.

Can I conceive of an emergency situation in which 48 hours might be reasonable and 72 hours might not be?  Perhaps.  But, I continue to believe that reasonable accommodation and reasonable modification requests are best done through the interactive process with management and the resident working together cooperatively.  And that can take more than just a couple of days.

Now, there are absolutely situations in which an unresponded to reasonable accommodation request can (and should) be considered denied.  Sometimes it is just inadvertent — for example if leasing office staff members change and a file is not appropriately documented.  Sometimes management is just slow.  Neither circumstance is textbook and we try to put procedures in place to avoid such an unforced error.  But, it can (and does) happen.

And if there is an unreasonable  delay, that is when management needs to speak with a lawyer like me.

Just A Thought.

Is That Dog a Pet or a Service Animal?

Posted in Disability, FHA Basics

A Fair Housing Defense Blog reader sent me a question related to my recent entry on service animals.  Specifically, my reader wanted to know how to distinguish a service animal from a pet.  There are a couple of issues involved with this question – so I will try to hit the high points.  First, service (or companion) animals perform important functions for their owners.  Some service animals are easy to spot – such as the dog that assists an individual with a vision impairment.   I have found it useful to think of service animals as similar to a wheelchair – as they are needed to assist a disabled individual with physical or emotional needs.

In our apartment management arena, there is an important distinction between service animals and pets as a service animal is exempt from extra pet rent and/or related pet fees.  The problem I see (also noted by my reader) is that some individuals wish to avoid paying pet rent/fees and simply claim their dog is not a pet, but is a service or companion animal.  Notwithstanding the disappointing and less than ethical behavior of these people, it truly does a disservice to the animals who assist individuals with real needs.  Another reason some people attempt to classify their pet as a service animal is that service animals are exempt from size and/or breed prohibitions.

At the outset, while many service animals wear a special vest or collar, there is no requirement that the animal have any such identification.   As such, there are many times when management is absolutely within our rights to seek confirmation from a medical/health care professional that the animal is not a pet.  And yes, a companion animal can be verified by a medical/health care professional.  Also, while formal animal training can be useful and there are many good trainers out there, the DOJ/HUD guidance on this point is clear that there is no requirement in the law mandating that a service or companion animal be specially trained.

Hope that helps.

Just A Thought.