We’ve talked a bit on this blog about the different classes that are protected under the Fair Housing Act ( "FHA") --  including race, national origin, sex, color, disability and familial status. Today, the Justice Department’s Civil Rights Division, along with the U.S. Attorney’s Office for the Southern District of Alabama and HUD made a joint announcement underscoring the consequences that arise when a property owner appears to discriminate against actual and prospective tenants on the basis of their familial status, and specifically based on whether those tenants have children. The government entered into a settlement agreement and the court issued a consent decree with the owners and managers of Pina’s Mobile Home Park to settle charges of discrimination against families with children. In settling the action, the defendants agreed to pay up to $104,130 to the victims of their discriminatory tactics, along with a $30,000 civil penalty to be paid to the federal government.

The lawsuit arose when HUD filed a charge on behalf of a prospective tenant who attempted to rent a home at the mobile home park, and was denied because the applicant was told she had too many children to live in the park. During the owner’s initial meeting with the Complainant, the owner allegedly indicated that there were vacancies in the park, but that families with children under the age of 18 were required to pay an additional $15 per month. Once the child reached 18 years of age, that fee would increase to $30 per month. In a second meeting, the owner of the park allegedly told the Complainant that the property’s rules only permitted families with two or fewer children to reside in the mobile homes. The Complainant, however, had three children. 

During HUD’s investigation, the owner stated that the park refused families with more children because “[i]f you have too many children, you have too many problems.”

As we’ve stated before: as a property owner, you cannot discriminate against any of the classes protected by the FHA and its state counterparts. Although you may have legitimate concerns that a large number of children concentrated in one unit of your property may cause “too may problems,” such as elevated noise levels, potential property damage, and an increased number of general liability issues, as a landlord, you cannot turn away a family based on their number of children if it meets the occupancy standards.

Furthermore, you cannot charge families with children additional rental fees to offset the additional repair costs that you fear may arise.  What you can and should do is determine what the applicable laws are concerning occupancy standards where your property located and ensure management follows that law.  

Just A Thought.

Article by Christian Moffitt.

• Email This
• Print
• Comments
• Trackbacks

When dealing with occupancy standards, it used to be easy. The traditional rule of “two heartbeats per bedroom” was perceived as the way to go. HUD published what was referred to as the Keating Memorandum back in the early 1990s which detailed this standard and it was considered generally reasonable.  Over the years, I successfully defended any number of cases based on the Keating Memorandum and the two person per bedroom guideline.  Many professional apartment management companies, including those I represent, adopted that standard. But that is not, of course, the end of the story.

Occupancy standards are useful because management has an absolute right to set reasonable, non-discriminatory limits as to how many people can live in a specific apartment. Yet management must be careful so as to not discriminate against a family with children. Those rational goals sometimes conflict.

Issues come up when a tenant gets pregnant and a family increases in size. Is it appropriate to ask a family to move to a larger unit? When is it appropriate to ask the family to move? What if the family cannot afford a larger unit? What if there are no larger units available? What if a family has twins? What should you ask an applicant about a pregnancy?

To be sure, the Keating Memorandum also made clear that there could be other factors which might change the analysis. Factors such as the size of the bedroom and the age of any children living in an apartment need to be taken into account. For example, if two bedrooms are large and/or if there is a spacious living area or study, a two person per bedroom standard might be unreasonably restrictive.

Additionally, some states (like California) and even cities (like Austin, Texas) have amended their laws such that in essence “two plus one per bedroom” is the new standard.

What should management do? First, check the law in your jurisdiction. If you don’t know where to find the standard, ask a lawyer. Then examine the size and configuration of your apartment units and develop a reasonable occupancy policy that does not unfairly discriminate against families with children. Again, if your bedrooms are large or there is additional living space, you may consider adding more than just two heartbeats per bedroom. 

Always be consistent in applying your occupancy standards. Management cannot make exceptions.

You cannot ask an applicant (or a current resident) about how many children they plan on having. You can certainly ask how many people will be living in the unit. When you ask, I recommend phrasing the question in terms of “people” as opposed to “children” so there will be less confusion about management’s intent. In my view, occupancy standards which limit the number of children per unit will be view more harshly than a standard which only refers to people living in a unit.

Management cannot discriminate against families with children. I have seen many discrimination cases based on familial status. They are never fun to defend against because any number of very cute children are involved. Setting reasonable standards – and informing applicants and residents of those standards – can help ensure that such a case never gets filed. 

Just A Thought.

• Email This
• Print
• Comments
• Trackbacks

                        What happens if management posts an on line advertisement for housing with a website provider if the content of that advertisement possibly contains a discriminatory preference or a limitation based on a protected class? Two recent cases provide important guidance.

                        In Chicago Lawyers Comm. For Civil Rights Under Law, Inc. v. Craigslist, Inc., 519 F.3d 666 (7^th Cir. 2008) the court issued a decision impacting how the Communications Decency Act (“CDA”) interacts with the Fair Housing Act (“FHA”). Specifically, can a website operator be held liable for a FHA violation because of allegedly discriminatory statements in an online advertisement for housing? In this case, the appellate panel concluded that the CDA protects website operators and was not subject to the FHA since it did not post the statements or cause them to be posted. 

                        On facts with a slight – but significant – difference, in Fair Housing Council of San Fernando Valley, Inc. v. Roommates.com, LLC, 521 F.3d 1157 (9^th Cir. 2008) (en banc), the court held that Roommates.com violated the FHA by contributing to the creation or development of discriminatory statements and advertisements on its web site. While the Ninth Circuit agreed with the Seventh Circuit that websites are protected from FHA liability based on advertising content provided by others, because Roommates.com required advertisers to fill in a questionnaire stating their preferences and by directing them to other advertisers whose preferences matched their own, the court held that Roommates.com was not entitled to immunity under the CDA and would be subject to FHA liability.

                        As is always the case in these circumstances, when you use any online advertisement for housing: follow the anti-discrimination provisions in the FHA so you will not need to have an appellate court review your ad.

Just A Thought.

• Email This
• Print
• Comments
• Trackbacks

According to the U.S. Department of Housing and Urban Development’s (“HUD’s”) annual report, 10,552 fair housing discrimination complaints were filed in fiscal year 2008. That is an all time record. Some other notes from HUD’s report include:

• Allegations based on disability remain the most common basis for a complaint – in fiscal 2008, 4,675 disability complaints (or 44 percent of the total) were filed. 
• Allegations based on race were the second most frequent basis for a complaint – 3,669 race complaints (or 35 percent of the total) were filed.  
• Interestingly, the approximate percentage of complaints filed under each of the seven characteristics protected under federal fair housing law has remained relatively stable during the past four fiscal years.
• After disability and race, familial status (1,690 complaints or 16 percent of the total) and national origin (1,364 complaints or 13 percent of the total) were the most common bases of complaints. 
• Retaliation, religion, and color were the least common bases of complaints filed with fair housing agencies in the past four fiscal years. In fiscal 2008, retaliation was cited as a basis for 575 complaints (or 5 percent of the total). Religion was alleged as a basis for 339 complaints (or 3 percent of the total). Color was cited as a basis for 262 complaints (or 2 percent of the total).
• Also, the number of complaints based on “failure to make a reasonable accommodation” jumped 5 percent during the last four years. In fiscal 2008, “failure to make a reasonable accommodation” was alleged in 2,401 complaints, or 23 percent of the overall total—the third most common issue.

These figures continue to show us that management must remain vigilant. We must always train our employees to know and follow the law. We must appropriately document our resident and community files. I see no meaningful reduction in the number of fair housing complaints in 2009. Significantly, always remember that while management is alleged to have done something wrong when a complaint gets filed, it is up to us to prove our innocence in these cases. Doing so requires good education and documentation. One last point: while the number of retaliation cases is not statistically large, agencies and investigators always take retaliation cases seriously and we must clearly demonstrate that management did not retaliate against anyone because he or she filed a fair housing complaint.

Just A Thought.

• Email This
• Print
• Comments
• Trackbacks

Is it Housing Discrimination if the Buyer Does Not Meet All of the Seller’s Terms?

Not When There Was a Financing Change Which Made the Offer Not Consistent with the Listing Terms

Pamela McDonald, an African-American, wanted to buy a house in the Shasta-Redding, California area.  Her real estate agent, who was also African-American, telephoned First Shasta Real Estate, a Coldwell Banker franchisee, and spoke with a Caucasian representative, about houses for McDonald to view.  The agent prepared a pre-approval letter indicating that McDonald qualified for a loan of up to $180,000.

Coleman and her agent described the Coldwell Banker representative’s attitude after he saw them as unenthusiastic. He showed McDonald a number of listings her agent had selected, including 2075 Galaxy Way, but then suggested that McDonald look at homes “less upscale” that were more “suitable” for McDonald.

McDonald wanted to make an offer on 2075 Galaxy Way that was higher than the asking price, but included a seller carry-back.  The Coldwell Banker representative discouraged her from making the offer after consulting with the seller’s agent allegedly because of the unusual carry-back financing.  Nevertheless, Coleman faxed the offer herself to the seller’s agent, who did not respond. The seller (also Caucasian) thereafter sold the property to another buyer (another Caucasian) for a lesser amount but with no carry-back financing.

McDonald sued Coldwell Banker and various other parties in U.S. District Court (N.D. Calif.), asserting discrimination claims under California’s Fair Employment and Housing Act (FEHA) and the federal Fair Housing Act (FHA). The District Court granted summary judgment in favor of the defendants and McDonald appealed.

The Court of Appeals started its analysis by reviewing the requirements for a prima facie case under the FEHA, which, as the Court pointed noted, are identical to the requirements under the FHA. The plaintiff must show membership in a protect class, application and qualification for housing, denial of housing, and that non-protected similarly situated individuals did obtain housing.

The Court focused on the carry-back financing in McDonald’s offer. It explained that the provision did not meet the seller’s listed terms, and therefore McDonald did not demonstrate “qualification” within the meaning of the statute. It also said that the carry-back distinguished McDonald from the eventual purchaser such that they were not similarly situated.

The FEHA and FHA also allow a plaintiff to establish by circumstantial evidence discriminatory motive in refusing the housing accommodation. The Court found no evidence that the defendants took any action to secure the sale of the house to a person who was of a different race than McDonald. It found no evidence that the agents ever disparaged McDonald or treated her differently based on their race. Summary judgment for the defendants was affirmed.

Although the plaintiff was not successful here, this case provides an important reminder that every applicant should be treated the same and that management agents should refrain from commenting on specific choices made by applicants or buyers. Even if those comments may seem benign, an applicant may be offended by those remarks as was the situation in this matter.

Just A Thought.

Article by Karin Corbett

• Email This
• Print
• Comments
• Trackbacks

Not necessarily. The Fair Housing Act provides no remedy for neutral restrictions.

In September 2001, the Shoreline Towers Condominium Association adopted rules prohibiting mats, boots or objects of any sort be left sitting outside owners’ unit entry doors. The rules also banned signs on doors or in hallways. The rules were not initially enforced against religious symbols. When the hallways were repainted in 2004, all religious objects were removed in preparation for the painting. At that time, the association’s board interpreted the rules to prohibit religious (as well as other) items and ordered the maintenance staff to keep the hallways and doors clear.

When the hallway painting was completed, the residents replaced their mezuzah on the doorpost, according to Jewish tradition. The mezuzah was removed by the association because of the rule.

The residents filed suit under §§804 and 817 of the Fair Housing Act, 42 U.S.C. §§3604, 3617, and one of the implementing regulations, 24 C.F.R. §100.400(c)(2). By the time of their lawsuit, the association had adopted a religious exception to the rules, but the residents sought damages for distress they claimed in the interim, plus an injunction to prevent the association from removing religious symbols in the future. The District Court (N.D. Ill.) granted summary judgment to the condominium association. The residents appealed.

The Seventh Circuit noted that the Fair Housing Act addresses discrimination in the sale or rental of a dwelling, not discrimination after the sale. Religiously motivated harassment must be addressed, if at all, under different laws. The Court concluded that religious harassment so severe as to make a dwelling unavailable on religious grounds might be actionable under the Fair Housing Act, but here the rules were religion neutral—they targeted all objects, not just religious objects.

The residents sought a religious exception to the rules, which they described as an accommodation. According to the Court, however, the Fair Housing Act does not provide a remedy for the failure to make accommodations on the basis of a particular religion.

The majority held that deciding whether a religious accommodation must be required and how far the obligation extends is a task for the legislature. The Religious Land Use and Institutionalized Persons Acts stops with land use and prisons.

The Seventh Circuit affirmed the judgment of the District Court. The case is Bloch v. Frischholz, 533 F.3d 562 (7th Cir. 2008).  According to this Court, the Fair Housing Act requires accommodations for disabilities but not for religious beliefs and practices.

As this case proves once again, issues dealing with religion are among the most personal and emotional.  Apartment management companies and their employees must work to ensure that all religions are respected and treated appropriately.

Just A Thought.

• Email This
• Print
• Comments
• Trackbacks