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Fair Housing Defense

Information on and Compliance with the FHA

Here Are Examples of Individuals Not Covered by the Fair Housing Act

Posted in FHA Basics

For most of us involved in the professional apartment management and housing world, we begin with the assumption that each property and person is covered by the federal Fair Housing Act (“FHA”) and/or state, city, county, or local anti-housing discrimination law.  Much of the time that is an absolute correct place to start.  But, not always.  Here are some people NOT covered by our FHA:

 

  1. Juvenile offenders and sex offenders are not persons with disabilities recognized under the law;
  2. Neither are current users of illegal controlled substances; and
  3. Individuals (even those with a disability) whose residency would constitute a “direct threat” to the health or safety of other individuals or whose continued residency might result in substantial physical damage to the property or injury to other persons, unless the direct threat can be eliminated or reduced by a requested reasonable accommodation.

 

Remember that the FHA does not permit the exclusion of people based on fear, speculation, or stereotype about a particular disability.  The determination must rely on an individual assessment based on reliable and objective evidence.

 

Again, most of our applicants, residents, guests, and apartment communities are certainly covered (and indeed should be covered) by the fair housing laws.  But, given the circumstance, you might want to think about if the FHA does not apply.

 

Just A Thought.

“Disparate Impact” Claims Survive Fair Housing Act Challenge

Posted in Discrimination, FHA Basics

In a case closely watched by many in the housing and civil rights communities, the U.S. Supreme Court yesterday validated a tool that the federal government and housing advocates have used for the past 40 years in an effort to combat housing discrimination.  In a 5-4 decision that surprised many of us (including me) who follow the Fair Housing Act (FHA) and related issues, the Court concluded that “disparate impact” claims are cognizable under the FHA, even though the words “disparate impact” do not appear anywhere in the statute.

What made the ruling surprising is that this is the third time in five years that the Supreme Court had accepted a case to answer the question.  The first two cases (one from Minnesota and one from New Jersey) both settled shortly before oral argument.  It was perceived by many (including me) that those cases settled because neither the Administration nor civil rights groups wanted the current nine justices to opine on this issue of law.  I suspected the Court would not try to answer the question three times in five years if it was going to keep the law as is.  Nevertheless, the Supreme Court decision provides that federal fair housing law permits individuals to challenge lending rules, zoning laws and other housing practices that have a disparate (legalese for “harmful”) impact on protected classes (legalese for “minority groups”), even if there is no proof that the property owner or bank intended to discriminate.

Now, the ruling is a win for the Obama Administration and fair housing advocates who argued that the FHA encompasses challenges to race-neutral policies that have negative effects on minorities.  Although the decision essentially validates current practice, it is a step back for banks, property owners, and insurance companies who believed such claims – which are based solely on statistical evidence – were not explicitly permitted under the FHA.  In upholding the tactic, the justices let stand a legal strategy that has been used for decades to challenge discrimination in housing, zoning, occupancy standards, mortgage lending, and insurance underwriting.  Importantly, as I believe every federal appeals court to consider disparate impact had upheld the practice, this ruling will not mean any change in current law, although the practice certainly has received more publicity in the media as the challenges have wound though the various courts.

In the case decided yesterday, the fair housing group argued that even if there were no motive to discriminate, the Texas policy still unfairly hurt African American residents.  Specifically, it was contended that the effect of the policy was to perpetuate segregated neighborhoods and to deny African Americans a fair chance to relocate into areas with better schools and lower crime.  Texas argued that it was simply unfair to have to justify or change policies that don’t intentionally discriminate and, in fact, would mandate that they start making race conscious decisions to avoid liability.

In his majority opinion, Justice Anthony Kennedy concluded that language in the FHA prohibiting discrimination “because of race” permits the disparate impact cases.  He wrote that these challenges “may prevent segregated housing patterns that might otherwise result from covert and illicit stereotyping.”  In his dissent, Justice Samuel Alito warned that the tactic can result in unwanted outcomes, noting a case from Minnesota in which a landlord used the law to sue city officials who forced him to combat rat infestation and unsanitary conditions in low income housing.

So, does this decide the issue once and for all?  Perhaps.  But, perhaps not.

Earlier this month the U.S. House of Representatives adopted an amendment to one of the fiscal year 2016 federal appropriations bills by a 232-196 vote.  The amendment would prohibit the Department of Justice from using funds to prosecute and obtain settlements from lenders, landlords, and insurers in discrimination cases based on the disparate impact theory.  Now, it is too soon to know if this amendment will survive the balance of the legislative process, but I will keep a watchful eye to see if “disparate impact” survives yet again.

So, what was my prediction as to the outcome of this case?  I had it 5-4 the other way.  Yet another reminder that it is close to impossible to predict with certainty what a court is going to do.

Just A Thought.

Arizona Court Finds City Bound by Arizona Fair Housing Act

Posted in FHA Basics

Thanks to Fair Housing Defense blog reader (and fellow management counsel Mark Zinman) for calling my attention to a new state court decision from Arizona.  I have written many times in this space that everyone in the professional apartment management business must comply with our federal Fair Housing Act (FHA) as well as applicable state, city, county or other local laws.  And that includes cities (at least in Arizona).

In an opinion issued earlier this month, the Arizona Court of Appeals held that the City of Tempe must comply with the Arizona Fair Housing Act (AFHA).  Even though the city does not actually rent apartments or homes, it does administer a housing voucher program.  This decision is consistent with other fair housing cases that a municipality can be liable for violations of the AFHA.   Again, everyone (including entities and municipalities) must be aware of the scope of the fair housing laws when dealing with the rental of apartment homes or units.

In the new case, a person filed a fair housing complaint alleging that the City of Tempe wrongfully denied his application for a housing voucher. The complaint was filed with the Arizona Attorney General’s office.  While the case was being investigated, the City filed a lawsuit seeking a judicial declaration that it was not bound by the AFHA because it doesn’t rent units – the City only administers the housing assistance voucher program.  In a nutshell, the argument was that the Attorney General’s office was prohibited from investigating the city.  The trial court ruled against Tempe.  Tempe then appealed that determination to a higher court.

In its decision, the appellate court concluded that “when the AFHA was enacted, it was well-established under federal case law that municipalities are included in the FHA definition of ‘person.’” This holding reiterated the long standing principle that all persons, entities and municipalities are bound by the AFHA. The Court of Appeals ultimately concluded that even though the city does not itself rent apartment homes or dwellings, as the whole point of the Housing Choice Voucher Program is to help eligible individuals obtain housing that they might otherwise not be able to afford, the practical impact of denying an application to participate in the program has the ultimate effect of making certain dwellings “otherwise unavailable” to applicants.  As such, because Tempe administered the voucher program, it was bound by the AFHA because it could make rental units unavailable to applicants.

And finally, in addition to providing useful guidance as to Arizona fair housing law, the Court of Appeals upheld an award of $108,090 in attorneys’ fees to the Attorney General and against the city.   And remember, the issue here was not if a fair housing violation took place – this case concerned whether the Attorney General had the authority to investigate if a violation of the AFHA took place.  Yet another cautionary tale as to the significant scope of the state and federal fair housing laws.  Again, thanks to Mark for the details and content on this new case.

Just A Thought.

Responding to Readers Concerning “Disparate Impact” and the Fair Housing Act

Posted in Discrimination, FHA Basics

Guess I need to add “disparate impact” to the list of topics that interest Fair Housing Defense blog readers.  My last post dealing with a vote by the U.S. House of Representatives to limit the way “disparate impact” is used in various case and investigations generated quite a response.  First, a housekeeping note.  A couple of readers noted I made an identification error concerning which side of a discrimination case uses disparate impact.  Let me clear that up:  Various plaintiffs (and/or HUD or the Department of Justice) may attempt to use statistical data to show that a decision by a defendant (owner of housing and/or a professional apartment management company) has a “disparate impact” on a protected class and, as such, violates the Fair Housing Act (FHA).  Defendants (owners and/or managers) will contend that the FHA requires intentional conduct by someone to discriminate and that an otherwise benign policy should not impose liability.  Hope that clears it up.

Another reader thought I was unclear concerning the vote in the House.  Earlier this month the House voted 231-195 to include the language which would prevent “disparate impact” from being used.  Then, just last week, the House voted 216-210 to adopt the Transportation, Housing and Urban Development and Related Agencies Appropriations Act for Fiscal Year 2016 (H.R. 2577), which contained essentially the same amendment.  Generally, the Republicans are voting to essentially remove “disparate impact” from the law while generally the Democrats are voting to keep “disparate impact” in the FHA.  Now, the U.S. Senate will need to speak on the topic as well.  And it is likely that a House-Senate conference committee could well get involved.  As such, it is fair to report we have a ways to go before knowing what the final legislation will look like.

Your humble editor appreciates that you read this space and care enough to work with me to get it right.

Now, I also got a few responses concerning the merits of “disparate impact.”  It is clear that this issue has struck a responsive chord.  Trust me, I heard from both sides.  Some readers view the efforts to strip “disparate impact” from our laws as an assault on the civil rights legislation that was passed over 40 years ago.  Others view it as textbook governmental overreaching in that the language is not in the law and, as such, should not be permitted unless and until Congress changes the statute.  Some of the comments (on both sides of the issue) were appropriately written and reflected respect for the opposing view.  Others, less so.

To be sure, the U.S. Supreme Court will weigh in on “disparate impact” and our FHA, likely before the end of the month when it issues a decision on a case from Texas.   I will report back.  And duck when the comments come flying in.

Just A Thought.

The U.S. House of Representatives Gets Into the “Disparate Impact” Debate and Votes to Exclude “Disparate Impact” Claims from the FHA

Posted in Discrimination, FHA Basics

Regular Fair Housing Defense blog readers may remember that the U.S. Supreme Court heard arguments on a case involving our Fair Housing Act (FHA) back in January.  A decision is expected before the end of this month answering the question: are disparate impact claims cognizable under the current fair housing statute?  Again, while federal case law from the past 40 years confirms that disparate impact claims (which are typically proven by the means of statistical analyses showing a disproportionate impact on a protected class) are viable, the words “disparate impact” are not in the FHA and a number of lawsuits have been filed challenging the practice.  The plaintiffs typically argue that someone must have intended to discriminate in order to state an actionable claim.

In an effort to change the law going forward, just last week the U.S. House of Representatives passed an amendment to one of the fiscal 2016 spending bills which would specifically prohibit the U.S. Department of Justice from using federal funds to prosecute and/or obtain legal settlements in lawsuits from landlords, insurers, or lenders based on disparate impact claims.  The vote in the House was 232-196.  All House Republicans voted in favor of the amendment as did 11 House Democrats.  While it is too early to determine if the language will be signed into law, it is a development worth following – particularly as we wait for the Supreme Court to rule.

Again, from my seat as management’s lawyer, we just want to know the rules of the road.  We will do our best to get it right.  And I look forward to some clarity.

Just a Thought.

Is Following the Seven Protected Classes in the Federal Fair Housing Act Enough to Avoid a Discrimination Complaint? Most Likely Not.

Posted in FHA Basics

Law360 published an article I wrote (shameless plug here) concerning 47 years of the federal Fair Housing Act (FHA) and current Department of Justice and Department of Housing and Urban Development fair housing enforcement and investigation trends.  The article generated a question that I wanted to address.  Our federal FHA contains seven protected class:  race, color, national origin, and religion (which were all contained in the initial 1968 law), sex (added in 1974) as well as disability and familial status (added in 1988).  My reader wanted to know if only following those protected classes would be enough to avoid a housing discrimination complaint?  The answer to that question is most likely no.  There is no federal preemption with respect to protected classes.

While indeed the FHA is the law of the land, many individual states (as well as various cities and counties) have adopted their own fair housing laws which include additional protected classes, such as source of income, sexual orientation, marital status, occupation, status as a student, member of the military, and/or age.  What this means is if you operate in an area covered by additional fair housing laws, you need to know the laws in your specific jurisdiction.

The good news is that you can find out what laws apply in your jurisdiction via an online search or by checking with a lawyer like me.  Again, it will not be a defense to say that “well, I just did not know the law.”  As professional apartment management, we are tasked with knowing (and following) applicable law.  Hope that helps.

Just a Thought.

Are Individual Roommate Searches Covered by the FHA? No.

Posted in Uncategorized

I received an interesting question this week:  are roommates (and searches for roommates) protected under the Fair Housing Act (FHA).  What used to be done in newspapers (and now largely done on-line through various websites) are efforts to help people find a roommate.  Many times people are looking for roommates based on a given sex, age, race, sexual orientation and/or familial status.  And these are the types of classifications covered under federal and state fair housing laws.  In sum, can an individual roommate search be done in a manner that would violate the FHA if done by a professional apartment management company?

Well, a local fair housing group in California thought roommate searches should be covered by the fair housing laws and literally made it a federal case.  The specific legal question was if an individual bedroom within an apartment or house is a “dwelling” subject to the FHA?  The U.S. Court of Appeals for the 9th Circuit concluded that no, the FHA does not protect roommates.  The opinion basically took view that, quite unlike an apartment community, the leasing office does not have to live with the resident.  The court concluded that applying the FHA to inside a home or apartment would permit the government to restrict the ability to choose roommates compatible with individual lifestyles and would reflect a serious invasion of privacy, autonomy and security.

While there are always two sides to every issue, the court took the view that, for example, a woman might want a female roommate because of security or modesty concerns.  Similarly, an orthodox Jew may prefer a roommate with similar beliefs and/or dietary restrictions.  These are but two examples of legitimate reasons why the FHA has been held not to apply in individual roommate searches.  Hope that makes sense.

Just A Thought.

A Fair Housing Defense Blog? Here’s Why.

Posted in FHA Basics

Why a Fair Housing Defense blog?  It is a question I got this morning.  And it struck me that I have not posted this introduction for some time now.  I have been representing apartment management companies, their employees, and providing fair housing advice as well as defending housing discrimination cases for over 17 years. I have had a docket of cases stretching from Alaska to Florida and just about everywhere in between. My cases get investigated by the U.S. Department of Housing and Urban Development, the U.S. Department of Justice  in addition to many state, city, and county agencies.

The goal of this blog is to provide a forum for issues of interest to apartment owners and management companies as well as professional apartment management employees.

Ours is a Noble Mission – we provide important housing. We are committed to following the federal Fair Housing Act (“FHA”) as well as the many state and local laws which prohibit discrimination in housing. Noting that you do not discriminate on the basis of race, color, sex, disability, national origin or familial status is only a good start.

On its face, the law seems simple enough: don’t discriminate. All applicants and residents should be treated equally and with respect. But, each situation is fact intensive and requires an individualized review of the circumstances.

For what it is worth, each year I see more and more reasonable accommodation and reasonable modification requests from resident (and/or applicants) with disabilities.  Furthermore, the number of service/companion animal requests exponentially grows.

Some common questions I see include:

  • How do I respond to a reasonable accommodation/modification request?
  • What medical verification is appropriate?
  • What about those which add source of income as a protected class?
  • Should you accept vouchers?
  • Do you know the difference between a reasonable accommodation and a reasonable modification?
  • Who pays for a reasonable modification?
  • Does a request for a reasonable accommodation have to be related to the claimed disability?
  • What is Section 504 of the Rehabilitation Act of 1973 and why are two agencies investigating the same complaint?
  • Can I have occupancy standards for my apartments?
  • What do you do when the investigator asks you to halt eviction proceedings in an effort to settle the case?
  • How do you handle an investigator who wants to interview all of your employees? Or review all your files?
  • What about when the investigator who wants to knock on the doors of your residents?
  • Should you still evict a resident even after he has filed a fair housing complaint?
  • Should you place an advertisement in a church flyer?

Those are just some of the issues I hope to explore. I will do my best to give some insight based on my experience and offer solutions.

There will be no lectures here, but I will try to leave you with –

Just A Thought.

Early Termination of a Lease as a Reasonable Accommodation?

Posted in Disability, Discrimination

A Fair Housing Defense blog reader sent me a question today that I wanted to address as it comes up from time to time.  As we know, our federal Fair Housing Act (FHA) was amended in 1988 to add individuals who are disabled as a class protected from housing discrimination.  As such, federal law requires management to make accommodations with respect to our rules, policies or services at a community when such an accommodation may be necessary to ensure that the disabled resident has an equal opportunity to use and enjoy a home.  Sounds simple enough.

The question I received is:  what happens when management receives a reasonable accommodation request that seeks early termination of a lease by a disabled resident as a reasonable accommodation because of a disability?  And further, that management wave any early termination fees.    On the one hand it does not seem logical to permit a resident to break a lease as an accommodation when the whole purpose of the FHA is to find and maintain housing for all.  To phrase it another way, the whole reason behind the FHA is to get people into homes — not to permit residents to leave.   On the other hand, are there circumstances under which the law will support breaking a valid lease as being consistent with the principles in the FHA?

In practice, however, the law holds that a resident may develop a disability, or an existing disability may become so severe during the term of a lease, that he or she cannot meet the obligations of their lease. In cases in which there is no reasonable modification or reasonable accommodation that can remedy the situation, the resident may have no choice but to find alternative housing. In such a case, the resident should request that management permit an early termination of the lease, and if it is reasonable, management may have to grant the request. Either the resident or management may offer an alternative accommodation, such as another, more suitable unit.  As with all determinations of reasonableness, management may only refuse to terminate the lease without penalty if the accommodation would result in an undue burden or would substantially alter the terms of the agreement. In determining reasonableness, the landlord may consider the following:  (a) the likelihood of filling the vacancy given vacancy rates in the area/building; (b) any particular characteristics of the dwelling that make it desirable or undesirable; (c) the amount of time remaining on the lease term; (d) the size of the owner’s business; and (e) the owner’s overall resources.

A request by a disabled resident for early termination of a lease can be considered one of many suitable reasonable accommodations.  Management must evaluate that request and determine if it should be granted or perhaps seek an alternative accommodation that can meet the needs of management and the resident.  To be sure, a determination of what is or isn’t a reasonable alternative is very fact-specific and will be a decision made on a case-by-case basis by courts in the event that the issue is litigated.  These situations are further evidence that management must remain current in responding to requests from residents and we must know the law.  Hope that helps.

Just A Thought.

The Relationship Between Familial Status Discrimination and Housing for Older Persons

Posted in Discrimination, FHA Basics

A fair housing issue that can cause unintended problems for management is the intersection of the inclusion of familial status as a protected class and certain housing limited to older persons.  On its face, the provisions seem to conflict.  On the one hand, management can get sued for prohibiting (or even appearing to discourage) families with children from applying. Yet on the other hand, certain communities are designated as housing for older persons.  Here is a quick summary of the law on this point:

Under our Fair Housing Act (FHA), it is illegal to limit the admission of children into your community.  This includes a prohibition on restricting families with children to certain floors or specific buildings in a community.   There is an exception in the law which provides that if a community is designated as “housing for older persons” or “designated senior housing” there can be restrictions on kids.   There are three general categories of such housing for older persons:  (a) housing provided under specific state or federal programs; (b) housing intended for persons 62 years of age or older (in that all residents must be at least age 62) or (c) what happens most commonly, “55 and older” designated senior communities.

In the 55 and older communities, at least 80% of the housing units must have at least one resident aged 55 or older.  To operate under the provision in the law, the community is required to demonstrate its intent to exist as senior housing in all of its advertising, lease provisions, rules, and practices. The community must track (typically be means of a survey) its resident composition on a regular basis (defined to be at least once every two years).  If it is determined that the number of units with someone 55 or older falls below the 80% level, the community can no longer be designated as senior housing.   What I have found is that in practice it is hard for an existing non-senior community to convert to becoming senior housing.

You should be able to easily identify if a community holds itself out as housing for older persons.  If you do not see such promotional materials, it is likely the property has not sought such a designation and the FHA protection for families with children is in place.  Hope that makes sense.

Just A Thought.