Does the Statute of Limitations for FHA Claims Arising from Design and Construction Claims Expire Two Years After the Last Certificate of Occupancy is Filed?
Not Always.
A recent case from the U.S. District Court for the Western District of Washington serves as a healthy reminder to all involved in the design, construction, and operation of multifamily dwellings covered by the Fair Housing Act (“FHA”). The case explored how the statute of limitations for FHA claims arising from the design and construction of such buildings does not always expire when you think it should.
Generally, civil court actions under the FHA are subject to a two year statute of limitations, which begins to run on the date of the last occurrence of discrimination. 1 For claims arising from design and construction, courts have ruled that the “last occurrence of discrimination” is the date of the issuance of the last applicable certificate of occupancy. See e.g. Garcia v. Brockway, 526 F.3d 456, 460-461 (9th Cir. 2008).
In Fair Housing Counsel of Oregon v. Cross Water Development, LLC, et al., 2009 U.S. Dist. LEXIS 24542, the plaintiff first filed a complaint with HUD on May 9, 2005, more than one year from the date of the issuance of the last applicable certificate of occupancy of September 23, 2003. HUD dismissed the complaint because the applicable statute of limitations had clearly passed. Subsequently, the plaintiff filed a complaint in U.S. District Court on December 17, 2008, asserting that the statue of limitations was tolled while the HUD proceedings were pending. The court found that there was no basis for application for the statutory tolling provision because the plaintiff failed to timely file its administrative complaint with HUD. Although this case correctly resulted in a favorable outcome for the developers, the court was quick to note that there are two circumstances where the two year statue of limitations may be tolled.
First, the statute of limitations may be tolled under a theory known as “equitable tolling,” which allows the court to determine if the plaintiff’s delay was excusable. This doctrine applies when “a plaintiff is unable to obtain vital information bearing on the existence of his claim.” Garciaat 465. The court in such a circumstance examines whether “a reasonable plaintiff would not have known of the existence of a possible claim within the limitations period.” Fair Housing Counsel of Or. at *8. If the court finds delay excusable, the statute is tolled until the plaintiff can gather what information he needs.
Second, the doctrine of “equitable estoppel” or “fraudulent concealment” will toll the statute of limitations when the defendant, in this case a party involved in the design, construction or operation of a multifamily structure covered by the FHA, takes action to prevent a plaintiff from filing suit by misleading the plaintiff in some way.
So, what should we take from all of this? In most circumstances, a complainant will indeed either file soon after the alleged discriminatory incident took place. However, if a complainant misses the date, it can be a challenge to get the non-lawyer investigators at an agency to pay attention to a missed deadline. We always raise the issue and you should as well.
Just A Thought.
Article by Christian Moffitt
[1] A collateral statute of limitations applies when an aggrieved party opts to file a complaint with the United States Department of Housing and Urban Development (“HUD”), rather than initially file suit in court. That rule provides that a person filing an administrative complaint with HUD must do so within one year after the alleged discriminatory housing practice occurred or terminated. 42 U.S.C. § 3610(a). While such a complaint is pending with HUD, the two year statute of limitations on FHA claims is tolled by statute. 42 U.S.C. § 3613(a)(1)(B).
