At the end of last month, the U.S. Department of Housing & Urban Development (HUD) issued a formal charge of housing discrimination against the developer, owner, construction company, and architect of a multifamily property in New York, asserting that the parties failed to design and construct a condominium development in Queens, NY in compliance with the accessibility requirements of the Fair Housing Act (FHA).

The FHA, of course, mandates that multifamily housing built after March 1991 contain accessible features for disabled individuals. These requirements include accessible kitchens, bathrooms, common areas, wider doors, and lower controls that can be reached by residents who use wheelchairs. These design and construction features are required to be included in order for multifamily properties to be in compliance with the law.

HUD’s charge of discrimination followed an investigation which was started with the filing of a discrimination complaint back in 2012 by a resident at the property asserting that the Respondents designed and constructed a building with any number of inaccessible features. As a part of its investigation, HUD conducted an on-site inspection and claims it discovered various design and construction problems. Specifically, HUD now asserts the property lacks safe and accessible routes between units and common areas in addition to issues with the property’s main entrance, hallways, shared outdoor terrace, patios, trash rooms, and its parking garage. Finally, HUD’s complaint alleges its investigation revealed multiple violations inside individual units, including inaccessible doors, bathrooms, kitchens, and environmental controls.

The case will now be heard by a HUD Administrative Law Judge, unless one of the parties chooses to send the case to federal court. As regular readers of this space are aware, I always know there are at least two sides to every story and that a complaint simply puts forward one side. The takeaway for defense lawyers like me, however, is that we need to advise our clients to follow the design and construction requirements contained in the law/regulations. Indeed, there are even safe harbors to help prevent complaints like this.

Just A Thought.

As predicted in this space a couple of months ago, on June 20, 2018, the U.S. Department of Housing & Urban Development (HUD) published a notice of proposed rulemaking in the Federal Register entitled “Reconsideration of HUD’s Implementation of the Fair Housing Act’s Disparate Impact Standard.”

What’s going on here?  Here is a summary, in English (as opposed to legalese):

“Disparate impact” involves testing a rule or a policy that looks neutral on its face, but which has a discriminatory impact on a protected class. While the phrase “disparate impact” is not contained in the text of the Fair Housing Act (FHA), courts have read the phrase into the law, most recently with a 2015 U.S. Supreme Court decision, which held, by a 5-4 margin, that “disparate impact” can be used in certain circumstances. It was clear to the Obama Administration that a “disparate impact” case was likely to reach the Supreme Court (as two prior FHA cases were accepted by the high court but those matters settled prior to the justices issuing a decision).

In an effort to bolster the use of “disparate impact” in fair housing cases, HUD adopted a Disparate Impact Rule (if I recall correctly, in 2013) discussing how “disparate impact” can and should be used in fair housing matters. Now, the Trump Administration is taking another look at HUD’s 2013 rule to see if indeed it is consistent with the Supreme Court’s 2015 FHA decision.

With its notice, HUD is requesting public comments related to:

  1. Are the Disparate Impact Rule’s burdens of proof appropriately assigned?
  2. Does the Disparate Impact Rule’s definition of “discriminatory effect” strike the appropriate balance for legitimate claims? In other words, are legitimate claims protected and are unmeritorious claims discarded?
  3. Should there be a safe harbor or other defenses to claims of “disparate impact” liability?
  4. Should the Disparate Impact Rule be revised to improve clarity, reduce uncertainty, decrease regulatory burdens, or assist the housing community and the public in determining just what is lawful under the FHA?

Comments to HUD are due on or before August 20, 2018. I am not breaking new ground here in predicting the Trump Administration’s view concerning the appropriateness of “disparate impact” in fair housing claims will be different from that of the Obama Administration.

As the lawyer for professional apartment management, my view continues to be that I want clarity in the law. I want to be able to tell my clients the rules of the road. If “disparate impact” is included in the FHA, fine. If it is outside the statute, just let us know. Uncertainty, however, is not helpful as we attempt to provide the best advice we can.

There will be more to come here.

Just A Thought.

Earlier this week a number of fair housing advocacy groups filed a lawsuit in U.S. District Court in Maryland asserting that a major financial institution and a property management company are violating the Fair Housing Act (FHA) by exposing predominately minority communities to economic harm, increased crime, and a less than optimal quality of life by failing to market and maintain its foreclosed properties in the same condition as the financial institution does in communities with a majority of Caucasian residents.

Based on a claimed multi-year investigation involving over 1,600 foreclosed homes in more than 30 metropolitan areas, the complaint alleges that bank-owned homes in communities of color are more likely to have overgrown grass, unsecured doors as well as various health and safety problems when compared to better maintained homes located in predominantly white communities.

The plaintiffs assert they want to hold the defendants responsible for “unjust policies and practices” while the bank contends it applies “uniform practices to the management and marketing of vacant bank-owned properties…regardless of their location.”

This is one of a series of actions filed by fair housing advocacy groups against lenders across the country in an effort to use disparate impact to assert claims of discrimination by banks and property management entities in predominantly African American and Latino communities. These groups are using the FHA in an effort to combat perceived segregation. Defendants will rely on their records and will likely try to increase the size of the statistical areas identified by the plaintiffs in an effort to weaken the disparate impact claims involving demographics.  There is a long way to go here.  I will be certain to report back as the case progresses.

Just A Thought.

 

Last week, the U.S. Department of Housing & Urban Development (HUD) announced settlement of a disability discrimination Fair Housing Act (FHA) case from San Francisco, CA.  A family filed a fair housing complaint asserting their apartment community failed to transfer them in violation of the FHA as their infant son had a disability and management was required to transfer them to a non-smoking unit.

The infant involved here has a condition that impacts his breathing. The family requested a transfer to a smoke-free building as a reasonable accommodation related to the young man’s disability. The family asserted that instead of moving them to a smoke free building, management simply provided them an air purifier. HUD concluded that solution was insufficient and brokered the settlement.

Pursuant to the terms of the agreement, the Respondents agreed to pay $12,000 and develop a grievance procedure that complies with Section 504 of the Rehabilitation Act of 1973.

As I have written in this space and elsewhere, complaints concerning disability discrimination now reflect over 50% of all of the housing discrimination complaints filed across the country. My docket similarly reflects the shift confirming that disability claims make up more than half of all the complaints that cross my desk. Indeed, HUD reports that in 2017 the department (as well as its state and local fair housing advocacy groups) investigated over 4,500 complaints in which disability discrimination was claimed. This is a trend which is simply not going to go away. Professional apartment management needs to ensure we have procedures in place to review, evaluate, and respond to each reasonable accommodation (or reasonable modification) request that is submitted by our residents.  Or you may really need to speak with a lawyer like me.

Just A Thought.

A case with difficult facts from Florida involving the Fair Housing Act (FHA) as well as other civil rights laws made the news earlier this week. An immigrant from India (who is Muslim) entered into an agreement to buy a home in an upscale island neighborhood near downtown Tampa. When the purchasers came to the house to do a final inspection and some cleaning, a neighbor walked toward the house and started yelling. The neighbor allegedly said things like “This sale will not take place!” and “You are not welcome here!” and “I will break all of your f-ing windows and I will burn you f-ing house down!” The neighbor also made insulting comments about Muslims.

The neighbor was just sentenced for violating the FHA and related civil rights statutes which protect threating or interfering with another person’s housing opportunities because of their race or religion. A part of the resolution includes a $30,000 restitution payment to cover the deposit the family lost when they canceled the closing on the house. In addition to the criminal matter, the neighbor is also facing a civil suit for violating the FHA and related anti-discrimination laws.

I know the facts here were extreme. No professional apartment management team would think of using this type of language when dealing with potential purchasers or renters of housing. But this case is a simple reminder that emotional outbursts can cause significant distress as we engage in our housing operations.

Just A Thought.

 

 

Last month the U.S. Department of Housing & Urban Development (HUD) approved a settlement agreement concluding an assistance animal Fair Housing Act (FHA) discrimination case from Nevada. An applicant submitted a reasonable accommodation request (that was appropriately medically verified, according to HUD) to keep an assistance animal due to her disability. As reported in the complaint, the leasing agent told the applicant that the owner did not allow pets because the floors had recently been upgraded to hardwood. After being told animals were not allowed, the applicant did not further attempt to lease the unit.

As reported here many times, however, professional apartment management typically must waive “no pet” rules when residents and/or applicants make reasonable accommodation requests that are appropriately medically verified. While there are always two sides to every story, my suggestion is to train your leasing office employees so nobody can ever credibly claim that you forbid service or emotional support animals because of hardwood floors. Always ensure your team knows the difference between a pet and an assistance animal. Or you may need to speak with a lawyer like me.

The terms of the settlement involved a $6,000 payment to the applicant, a requirement for fair housing training, as well as the adoption of reasonable accommodation policies to ensure any future requests are appropriately (and timely) responded to.

Just A Thought.

In a case filed last week, the U.S. Department of Housing & Urban Development (HUD) formally charged property owners in Syracuse, New York with violating the Fair Housing Act (FHA) asserting that the  owners failed to accommodate a disabled resident with an assistance animal at a community that otherwise has a “no pets” policy. While management is absolutely within its rights to declare a property pet free, leasing offices have to be able to review and evaluate reasonable accommodation requests from residents/applicants with disabilities seeking, for example, an assistance animal.

In this case, HUD asserts that the resident submitted a letter from her physician describing how the resident has a disability and how the animal alleviates anxiety and assists in preventing panic attacks. When the leasing office was reached to further discuss the request, the resident’s representative (a local fair housing group) was allegedly told that if the resident provided a $600 security deposit and insurance coverage (in the range of between $500,000 and $1 million), management would consider the accommodation request. When the resident brought the dog back to the property, she was served with an eviction notice asserting the animal was a pet and was being kept in violation of the “no pets” policy. The local court stayed the eviction action pending resolution of the HUD complaint.

As always, there are two sides to every story and just because something is in a complaint does not make it true. However, I would urge you to train your leasing office staff members to never say anything like “I know you are playing the disability game. We’re not playing it” as is claimed here. Also, do not attempt to charge a pet deposit for an assistance animal. And do not require special insurance for an assistance animal. These are hot button items and will raise red flags with HUD.

To be sure, management can and should review all medical verifications to do our best to determine that the document was not simply purchased over the internet by answering a few simple questions and using a credit card. Yes, some residents are indeed attempting to “play the disability game.”  But there are ways to engage in the interactive process that should be considered.  If you have what you believe are legitimate concerns, perhaps you should reach out to a lawyer like me to review your options before winding up as a defendant in an FHA discrimination matter.

Just A Thought.

I wanted to pass along a couple of federal fair housing policy notes. Over the past two weeks, the Trump Administration has publically indicated a desire to change two points of federal housing law:

  1. On May 10, 2018, the U.S. Department of Housing and Urban Development (“HUD”) issued a press release stating that it would seek public comment on the 2013 “disparate impact” regulation put in place by the Obama Administration. The “disparate impact” regulation was an attempt to codify a way to establish legal liability in a housing discrimination case. “Disparate impact” — defined as a facially neutral policy which has a discriminatory effect on a protected class — has been used in housing discrimination cases for many years, although the words “disparate impact” are not contained in the Fair Housing Act. On the third try, the U.S. Supreme Court, in a 5-4 decision, seemingly upheld (but arguably tightened) the use of the “disparate impact” theory in fair housing cases. That HUD seeks public comment on its regulation, I suspect, means the department is looking to alter or withdraw the rule.
  2. Next, on May 18, 2018, HUD Secretary Ben Carson moved to change another Obama-era housing policy. In 2015, HUD required more than 1,200 communities receiving federal housing money to use a new computer model to assess local segregation patterns and to develop a plan to address any apparent discrimination. Communities which failed to follow the model were put on notice that they were at risk of losing federal funds. In withdrawing the computer model, Secretary Carson stated the tool was “confusing, difficult to use, and frequently produced unacceptable assessments.” With the model withdrawn, HUD has directed communities to return to what they should have been doing – self-certifying that they have analyzed impediments to fair housing and, if needed, to prepare a plan to address any deficiencies. As a prelude to HUD’s action, a group of fair housing agencies sued the department over its suspension of the computer model.

A change in administrations typically produces policy modifications over time, particularly when the political party in power switches. Which is, of course, what happened in January 2017. There will be more to come in the coming weeks and months on these housing policy issues. I will continue to report back.

Just A Thought.

 

A couple of assistance animal related questions have hit my desk recently.  At properties which have pools, can assistance animals accompany residents into the pool area? How about into the pool? No, I am not making that question up.

While every situation requires independent analysis, the general rule is that an assistance animal is permitted on the pool deck (provided the animal is secured) but is not permitted in the pool. Animals are not permitted in the water for legitimate local public health reasons.

A related question had to do with properties that have a café or otherwise serve food. Can assistance animals accompany residents into the food service area? While I have not seen a case on point, I am aware of HUD guidance noting that animals which pose a direct threat to the health or safety of others that cannot be reduced or eliminated by another reasonable accommodation may not have to be granted. In this example, I would argue allowing animals into common areas specifically designated for food preparation and consumption escalates the risk of illness or other reasonable health concerns.

This conclusion is supported by two—somewhat more common—analogies. First, while the Americans with Disabilities Act (“ADA”) specifically requires restaurants to permit service animals to accompany customers in a restaurant, it does not require the proprietor to allow an emotional support animal in. This distinction between service animals (who are trained to assist their owners with major life activities) and emotional support animals (untrained animals that assist with emotional/mental disabilities) has been recognized as severe enough as to allow the former near food and food preparation, while not the latter. As such, because these types of situations are considered on a case-by-case basis, unless a specific resident could demonstrate that their need for an emotional support animal in a dining area reasonably outweighed legitimate health concerns, the same rule would likely apply under the FHA.

In sum, while I cannot rule out the risk of a complaint that a resident may claim he or she is being discriminated against because their emotional support animal (as contrasted with their service animal) is not permitted in a food service common area, I think we could argue that such an animal near any food preparation or food service area is unsanitary and will militate in management’s favor under the health and safety exception.

Hope that helps.

Just A Thought.

Last month, the U.S. Department of Justice (DOJ) announced it settled a federal discrimination lawsuit filed against the owner, builder, and designer of a three building dormitory-style property near Central Washington University in Ellensburg, Washington. The resolution concludes allegations that the defendants failed to design and construct the buildings in such a manner as to make them usable by individuals with disabilities as mandated by the accessibility requirements contained in our Fair Housing Act (FHA).

As noted here (and elsewhere), the FHA requires that multifamily housing constructed after March 1991 have basic features to help ensure that individuals with disabilities can enjoy the full benefits of their housing. In the complaint, DOJ asserted that the defendants designed and built the units with “various barriers inhibiting access to the 12 ground floor units and the associated public and common-use areas at the property.” In this case, it was alleged that the barriers included: inaccessible building entrances, inaccessible routes, inaccessible parking as well as problems with bathrooms, closets, doors, and electrical outlets that combined to make the property inaccessible to individuals with disabilities.

The case began with a HUD administrative complaint after an inspection done by a local fair housing advocacy group. Following the agency investigation, HUD issued a charge of discrimination and referred the case to DOJ.

As a part of the settlement, the defendants will: (1) retrofit property to make the 12 ground floor units and common areas accessible; (2) pay $10,000 to the local fair housing group; (3) train new employees on the FHA; and (4) adopt a nondiscrimination policy.

New multifamily housing construction is great. For designers, builders, owners, property management professionals and future residents. The FHA has several safe harbors that simply must be followed by those building new multifamily housing. If you believe your property exempt from the law, I would suggest you speak with a lawyer like me to determine if your project might fit into an exemption. Otherwise, you may have to do an expensive retrofit and pay damages at some unspecified future date if your housing is determined to be inaccessible to those with disabilities.

Just A Thought.