Fair Housing Defense : Fair Housing Lawyer & Attorney : Fox Rothschild Law Firm : Federal Fair Housing Act (FHA), Discrimination Complaints

HUD is out with its most recent data concerning the number of discrimination complaints filed under our federal Fair Housing Act (FHA).  In 2012, HUD investigated 1,817 cases while its partner entities investigated just under 7,000 cases.  Those numbers are down a little from 2011 and 2010.  When added to the number of complaints investigated by private fair housing groups, however, the total number of fair housing complaints filed is up to over 28,000. 

Fair housing advocates take the view that a significant number of housing discrimination cases go unreported because people either do not know the law or they are afraid of the system.  Conversely, management representatives will report that a large majority of the reported discrimination claims receive No Probable Cause dismissals and are really filed by individuals who are disgruntled for one reason or another having nothing whatsoever to do with unlawful discrimination.  Where is the truth?  I have my opinion, but I will let you decide for yourself.

For what it is worth, claims alleging discrimination against those with a disability make up the largest percentage of cases (in 2012 over 55%).  Race is second at over 25% of the complaints, with national origin coming in third at just under 23% of the cases.

Furthermore, I have written many times that those of us in the professional apartment management arena must know the state (and local) laws in which we operate.  To illustrate, while the federal FHA contains the seven familiar protected classes, you need to know that:

21 states (plus DC) include sexual orientation as an additional protected class:  California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Washington, and Wisconsin.

·         12 states (again plus DC) include source of income as a protected class in their fair housing laws:  California, Connecticut, Maine, Massachusetts, Minnesota, New Jersey, North Dakota, Oklahoma, Oregon, Utah, Vermont, and Wisconsin.

What does all this mean?  HUD and its partner entities are out there looking to file discrimination complaints. You must know the laws where you operate properties.  And remember there are also city and county anti-discrimination laws that you must follow.  Because if you do not, you will really need to see a lawyer like me.

Just A Thought.

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Just yesterday, the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Justice (DOJ) issues new guidance which reaffirms that the Fair Housing Act’s (FHA’s) requirement that multifamily housing be designed and constructed so as to be accessible to persons with disabilities.

An important part of our FHA, of course, mandates that multifamily housing with four or more units, built for first occupancy after March 1991, contain accessible features for individuals with disabilities.

As provided for in the FHA and explained in the guidance issued yesterday, new multifamily housing must include:

        Public and common use areas that are readily accessible to and usable by persons with disabilities; and

         Doors that are designed to allow passage into and within all premises of covered dwellings and that are sufficiently wide to allow passage by persons with disabilities, including persons who use wheelchairs.

In addition, all premises within covered dwellings must contain:

          An accessible route into and through the dwelling unit;

          Light switches, electrical outlets, thermostats, and other environmental controls in accessible locations;

          Reinforcements in bathroom walls to allow the later installation of grab bars;

          Usable kitchens and bathrooms such that an individual using a wheelchair can maneuver about and use the space.

Importantly, the guidance also contains an explanation of the safe harbors that are available in the law to assist architects, builders, owners, and professional apartment management companies. You can take a look at the guidance here .

Just A Thought.

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Earlier this month, the Department of Justice (DOJ) announced that a property owner in Mississippi agreed to pay $27,000 to settle a lawsuit involving allegations of discrimination under the Fair Housing Act (FHA).  Specifically, DOJ’s lawsuit alleged that the defendants established and implemented an occupancy policy at ­­23 rental properties in Mississippi that differentiated between the maximum number of adults and children who could reside in each home.  As such, the DOJ claimed that the owners engaged in unlawful familial status discrimination.

Pursuant to the terms of the settlement agreement, which was approved by the U.S. District Court for the Southern District of Mississippi, the defendants must pay $20,000 to a family that was claimed to be harmed by defendants’ practices and $7,000 to the United States as a civil monetary penalty. Furthermore, the court order prohibits the defendants from discriminating against families with children in the future, mandates a non-discriminatory occupancy policy of two persons per bedroom, and requires the defendants to receive FHA training.

The November 2011 action began after a fair housing complaint was filed with the U.S. Department of Housing and Urban Development (HUD).  HUD investigated the allegations, issued a charge of discrimination, and sent to matter to DOJ.  The suit alleged that the defendants violated the FHA by refusing to rent a three-bedroom home to a woman with four children because she had “too many children” under the property’s occupancy policy. The complaint also claimed that by setting a lower maximum number of children than adults who could reside in each home, the defendants engaged in a pattern or practice of discrimination protected by the FHA.

This case is another timely reminder that while reasonable occupancy standards can be enforced, management cannot (in most circumstances) advertise properties as “No Children Allowed” and occupancy standards need to be designed in such a manner as to comply with federal, state, and local law.  While here the “two persons per bedroom” standard was noted in the order, depending on the size of the unit and/or living space, that guideline can change.

Just A Thought.

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As discussed in this space in past posts, our federal Fair Housing Act (FHA) contains a handful of exceptions, the most famous of which is the "Mrs. Murphy Exemption."  This provision in the law provides that a home is exempt from the FHA if the dwelling has four or fewer rental units and the owner lives in one of those units.  The exemption is based upon the hypothetical elderly widow, Mrs. Murphy, who would like to rent part of her home and who may desire to specifically pick out her tenants.

A frequent question we at the Fair Housing Defense blog hear is “I live in [insert name of your state here].  Does the Mrs. Murphy exemption apply?”  The general answer is “Yes” -- because the Mrs. Murphy exemption applies on a federal level to every state in the country.  However, the final answer is often more complicated because many states have their own fair housing laws that provide for more stringent protections than the “floor” set by the FHA.  When enacting their own fair housing laws, each state has the option of providing for the base exemption included in the FHA, but also has the option of limiting or eliminating the exemption under their own fair housing act.  Even though you may be in compliance with the FHA, it’s entirely possible that some action that you take might be in violation of other state or local laws, regulations or ordinances. 

As such, please see below a quick “50 State Survey” of the Mrs. Murphy exemption to provide general guidance as to whether your state follows the FHA exemption or has chosen to limit that exemption in some way.  Remember, this survey does not constitute legal advice and you should always consult with a lawyer if you have any questions about this or any other fair housing issue.

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As has been written in this space more than once, our Fair Housing Act (FHA) prohibits a variety of discriminatory conduct concerning the sale, rental or financing of residential housing. While lawsuits often are brought by individuals who have directly suffered from housing discrimination, it is also common for cases to be filed by what are known as “testers” or by the organizations that employ such testers. What is a tester and how is it that they have standing to bring suit under the FHA? And why is the use of tester evidence potentially problematic?

The issue of “tester standing” was first addressed by the Supreme Court in Havens Realty Corp. v. Coleman, 455 U.S. 363 (1981). The Supreme Court defined testers as “individuals who, without an intent to rent or purchase a home or apartment, pose as renters or purchasers for the purpose of collecting evidence of unlawful steering practices.” While some would argue that any evidence presented by someone who admits he or she is not being truthful (because they have no real interest in renting or buying the apartment/home) should be considered suspect at best, courts routinely allow testers to testify, and rarely discount the reliability of their testimony. 

In the Havens case, the Supreme Court held that testers who receive misrepresentations from renters, sellers, or brokers of real estate have standing to sue under the FHA. The Court reasoned that the FHA creates legal rights, including the right to receive truthful information concerning the availability of housing, that automatically create standing if that right is violated. Therefore, if a tester inquires and the landlord/owner misrepresents the availability of that apartment, the tester obtains standing to sue under the FHA, even if “the tester may have approached the real estate agent fully expecting that he would receive false information, and without any intention of buying or renting a home… .” 

Havens also set the ground for fair housing organizations to bring suit under the FHA. Both of the Havens testers were employed by such an organization, which claimed that it had standing because it had been “frustrated by defendants’ racial steering practices in its efforts to assist equal access to housing through counseling and other referral services.” In addition, the organization claimed that it “had to devote significant resources to identify and counteract the defendant’s [sic] racially discriminatory steering practices.” The Supreme Court held that this allegation of injury-in-fact sufficiently granted the organization standing to bring suit, though the Court noted that the organization would still have to actually prove that it suffered demonstrable injury before it could recover. 

This issue of standing may be starting to change, at least a little. In La Asociacion de Trabajadores de Lake Forest v. City of Lake Forest, 624 F.3d 1083 (9th Cir. 2010), the Ninth Circuit made it more difficult for tester organizations to establish standing. In its decision, the court wrote that a fair housing organization could not “manufacture an injury by incurring litigation costs or simply choosing to spend money fixing a problem that otherwise would not affect the organization at all.” While this is still good law in the Ninth Circuit, the view has neither been adopted nor rejected by the other circuit courts around the country.  It is a legal issue that all who are involved in fair housing should follow.

Just A Thought.

Article by Christian Moffitt.

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As the calendar turns to April, it is HUD’s annual Fair Housing Month. And this time HUD opens with an aggressive public campaign with a focus on “enforcement and education and outreach efforts and the work of its fair housing partners.” While some in the apartment management world would argue perhaps HUD’s efforts would be better focused on education as opposed to enforcement, we need to know that HUD’s public campaign is driven by enforcement and penalties as contrasted with outreach and education. All too often I see HUD view management as the opponent in fair housing matters when more likely we should be business partners working to get it right together. 

As readers of this space well know, we here at your friendly neighborhood Fair Housing Defense blog feel differently. Education is key. Training is critical. That’s why this month, we’re making that our focus, starting with a brief history and explanation of the Fair Housing Act (FHA), followed by a few entries on important cases and amendments that have shaped today’s FHA. 

The FHA was enacted by Congress seven days after the assassination of Martin Luther King, Jr. in 1968. Intended as a follow up to the Civil Rights Act of 1964, the FHA initially prohibited discrimination in connection with the sale, rental, or financing of housing based on race, color, religion, and national origin. Gender was added as a protected class in 1974. Disability (handicap) and familial status were added in 1988. To be sure, states and many localities also include additional protected class (such as source of income and/or sexual orientation) in their laws. In addition to the statute, through the Code of Federal Regulations, HUD has put forward an expansive set of rules and regulations that implement our FHA.

So, do we see overt acts of housing discrimination? Sometimes. Not too often. Curiously omitted from HUD’s materials, however, are the reams of cases which receive a No Probable Cause Dismissal as they were filed by a disgruntled applicant, resident, or former resident who was unhappy for one reason or another. Indeed, more likely in today’s world is that discrimination complaints arise when a well meaning owner/manager or realtor advertises in a manner that someone claims violates the FHA. Likewise, as evidenced by HUD’s new educational photo and by many of the questions we receive, it is becoming more common for complaints to be filed by people who require service animals and who see that an apartment complex does not allow pets. A service animal, of course, is not a pet.

These latter forms of discrimination are far less obvious and far more problematic for people in our industry. That’s why education is so important, and that’s why we’re here.

Just A Thought.

Article by Christian Moffitt.

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As I have written in this space many times before, sex and familial status discrimination are prohibited under the Fair Housing Act (FHA). Sex and familial status discrimination include denying or delaying housing related services (such as an apartment or a loan) to a woman because she is on maternity leave. HUD has reported that since 2010 it has received dozens of complaints (typically against lenders) who allegedly deny families mortgages because the wife was pregnant or on maternity leave.

The issue can potentially arise when a housing provider or bank singles out a pregnant woman for different treatment by assuming that either the woman is not being paid while out on maternity leave, that she will not have a job to go back to, or she will not want to return to work.

HUD’s view is that housing providers and lenders cannot use parental leave to form the basis for rejection if the borrower demonstrates that she intends to return to work or otherwise has enough income to qualify for the loan or apartment.

Several lenders have settled discrimination complaints in circumstances where a pregnancy or maternity leave was involved. Housing providers similarly need to ensure we do not ask improper questions such as “When are you going to have a baby?” or when evaluating housing applications.

If an apartment owner or management company has specific questions about what to ask (or not ask), let me know.

Just A Thought.

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I have been representing apartment management companies providing fair housing advice as well as defending housing discrimination cases for over fifteen 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 ("HUD") 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. I also hope we can share available resources.

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. Plus, not every jurisdiction is the same. Some common questions I see include:

• 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.

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Although most Fair Housing Defense blog entries focus on ensuring compliance with the federal Fair Housing Act (FHA), I have prepared previous posts dealing with exemptions to the law. One of those exceptions is the “Housing for Older Persons” exemption.

This provision comes into play because as I have written many times before, the FHA now prevents discrimination based on “familial status” – which means that families with children cannot be denied residency if they otherwise meet the applicable resident selection criteria. Because of this provision in the FHA (adopted back in 1988), we (for the most part) no longer see apartment communities that advertise as “Adults Only” housing.

Written into the law, however, is a protection for certain senior housing communities which can refuse to sell or rent to families with minor children. In order to qualify for the “housing for older persons” exception, a community must prove that its housing is: (a) provided under any state or federal program that HUD has certified to be specifically designed and operated to assist elderly persons; or (b) intended for, and solely occupied by persons 62 years of age or older; or (c) intended and operated for occupancy by persons 55 years of age or older.

Now, to qualify for the “55 and older” housing exemption, a community must satisfy each of the additional following criteria: (a) at least 80 percent of the units must have at least one occupant who is at least 55 years old; and (b) the community must publish and adhere to policies that demonstrate the intent of the property to operate as a “55 and older” community; and (c) the property must comply with HUD’s regulatory requirements for age verification of its residents.

Let me be clear here – the “housing for older persons” exemption is for this one use only and absolutely does not mean that a community can discriminate in housing based on race, color, religion, sex, disability, or national origin.

Just A Thought.

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In an effort to help both industry and the public have easier access to information concerning fair housing rights and responsibilities, the U.S. Department of Housing and Urban Development (HUD) just unveiled its initial housing discrimination mobile application (app) for various smartphones and other devices. The app is intended to assist the public with a quick and easy way to learn about housing rights, how to file housing discrimination complaints, and to inform the housing industry about our responsibilities under the Fair Housing Act.

HUD hopes that its app will be another tool to assist fair housing and civil rights advocacy organizations in their efforts to help individuals pursue their housing rights and for industry to educate members on their responsibilities under the law.  You can try out the app at any time.

The app also provides information about the fair housing complaint process and allows the public to access HUD’s toll-free discrimination hotline as well as a link to HUD’s fair housing website.

Time (and technology) sure marches on.

Just A Thought.

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The new proposed HUD regulations concerning “disparate impact” and the Fair Housing Act (FHA) have received much attention in the housing management and lending arenas – including an entry by your humble blog editor last week. A Fair Housing Defense Blog reader asked for my opinion about the impact of the proposed new rules. 

So, here goes. Professional apartment ownership, lenders, and management want to follow the FHA. We work every day to get it right. Discrimination has no part in our business. We want to fill all our units. We want our residents to renew their leases with us.  We want to provide loans to all qualified buyers. 

I am a defense lawyer. I defend those accused of discrimination. As such, I always would prefer clarity and certainty as to the circumstances under which my clients might be held liable (or the situations in which we would be shielded from liability).  Unfortunately, HUD’s preamble to the new rules really did not provide the type of detail I would have wanted to see.  Am I going to be forced into defending against practices that my clients developed without any discriminatory intent whatsoever? Could be. And that will be expensive and time consuming.

Indeed, HUD even declined to provide guidelines as to a defining percentage of what is an actionable different treatment between relevant protected classes. Also, just what HUD will consider to be a “substantial” business interest will need to be developed. In short, there are still many unanswered questions.

In sum, there will be more to come on this topic. Particularly if the Supreme Court decides to review the case in which the Department of Justice was asked to provide the views of the federal government. If the Court takes the case (and I think it well might), let’s hope we will get some needed guidance for the FHA regulated community.

Just A Thought.

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I wanted to briefly report on the new proposed HUD rules that provide that if a housing practice has a "discriminatory effect," HUD (or a private plaintiff) can prove liability under the Fair Housing Act (FHA), even if there is no discriminatory intent on the part of the defendant.   

As was reported in the media last week, the rule contains a three part burden shifting test for determining if a housing practice with a "discriminatory effect" violates the FHA.  As drafted by HUD, the rules provide that a facially neutral practice has a "discriminatory effect" where "it actually or predictably results in a disparate impact on a group of persons or creates, increases, reinforces, or perpetuates segregated housing patterns because of race, color, religion, sex, handicap, familial status, or national origin."

To be sure, a housing practice found to have a discriminatory effect can still be legal if management proves it has a "legally sufficient justification" for it.  What this means is that a defendant (in our world the owner, management company or landlord) will need to show that our "substantial, legitimate, nondiscriminatory" interest, could not be served by another practice that has a less discriminatory effect.  

Tellingly, HUD reported that the rule will apply to pending and future cases, describing it in the explanatory materials as "not a change in HUD’s position but rather a formal interpretation of the [FHA] that clarifies the appropriate standards for proving a violation under an effects theory." 

If that is indeed the case, why is HUD moving forward with this rule now if it does not reflect a change in HUD’s practices?  Here is the reason: 

HUD’s new rule could well be tested later this year by the United States Supreme Court, if the Court grants the pending petition for certiorari (legalese for a request that the high court accept a case) in an action which involves a claim that a local redevelopment plan violated the FHA because of a disparate impact on minorities. The potential Supreme Court review focuses on the threshold legal question of whether such claims are even permitted by the FHA.

Should the Supreme Court agree to decide the case (and there is reason to think it will as the Court asked the Department of Justice to file a brief on behalf of the federal government in October 2012), HUD will certainly argue that its new final rule is entitled to administrative deference accorded to federal agencies.  

This point is important because in a related May 2012 decision, the Supreme Court specifically rejected HUD’s position that the department’s interpretation of the Real Estate Settlement Procedures Act was entitled to administrative deference, largely because the plain language of the statute did not support HUD’s position.  

Accordingly, as HUD is correctly concerned that the Supreme Court would similarly reject HUD’s interpretation of the FHA because “disparate impact” is not in the text of the statute, the government hopes that its new rules will be viewed favorably by the justices.  HUD cannot amend the FHA on its own to simply add “disparate impact” to violations of the law. Only Congress can do that. But HUD can write the administrative rules and regulations that help enforce the law. Which it is doing here. And which it hopes will be viewed with favor by the Court.

With apologies to the late Paul Harvey:  Now you know the rest of the story. 

 Just A Thought.

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Late last month, the U.S. Department of Justice (DOJ) announced that it had reached a deal with the city of Memphis, Tennessee pursuant to the Americans with Disabilities Act (ADA) to improve physical accessibility for people with disabilities at Liberty Bowl Memorial Stadium (the “Liberty Bowl”) which hosts various college football games.

Pursuant to the terms of the agreement with Memphis, the Liberty Bowl will be required to install a total of 282 wheelchair spaces and an equal number of companion seats around the stadium at Row 25 and in the upper concourses on the home and away sides of the stadium.  These new wheelchair spaces will be spread out throughout the Liberty Bowl to provide those in wheelchairs similar lines of sight over spectators who may be standing that are comparable to those offered to individuals without disabilities.

As a part of the deal, the Liberty Bowl will be evaluated to ensure it is ADA compliant with respect to its concession stands, gates, elevators, suites, press boxes, ramps, and restrooms. Memphis also agreed that it would hire an architect to certify that each alleged ADA violation is corrected.  Although the DOJ did not file a formal complaint, the government pursued its own investigation.

While apartment communities do not typically fall under the exact same ADA requirements as do sports stadiums like the Liberty Bowl, what is important here is that we still must evaluate and respond to reasonable accommodation and reasonable modification requests from our residents with disabilities. Otherwise, you could find yourself subject to an investigation pursuant to the Fair Housing Act.

Just A Thought.

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As reported last month, the Top Ten Fair Housing Defense blog posts for 2012 included at Number 1 – the Top Ten posts from 2011. With apologies to David Letterman, we just love Top Ten lists. Hmm, perhaps I am on to something here. As such, I went back since this blog was started and compiled the Top Five read posts of all time. And here they are:

1.  Occupancy Standards -- Why They Matter (Sept 2009)

2.  Exemptions To The Fair Housing Act? Not Many -- But Here Are Some. (Jan 2011)

3.  The "Mrs. Murphy" Exemption To The Fair Housing Act (June 2010)

4.  FHA and the Statute of Limitations (June 2009)

5.  Are Punitive Damages Available in a Fair Housing Lawsuit? Only In Extreme Cases. (Nov 2010)

It is curious to me that two of the top five include attempts to find exemptions to the Fair Housing Act (FHA). So the record is clear – for almost all apartment communities that are professionally managed – you will be covered by both federal and state fair housing laws.

Occupancy standards are a very interesting issue because, like so much in the law, there is not always an easy yes or no answer. HUD has provided guidance in the past. But that guidance now essentially requires a balancing test. Additionally, certain state laws and city codes also weigh in on occupancy standards. The bottom line is while management has a right to look after safety, excessive damage and overcrowding – those issues may well lose to keeping a family (particularly if small children are involved) together.

Just A Thought.

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