A California fair housing case that settled last month provides a cautionary tale for all in the property management arena concerning lease termination and disability. None of us in the professional apartment business would knowingly end a tenancy because a resident has a disability, right? And further we would not move against someone because he or she needed an ambulance or other medical care, right?

Here is what is claimed to have happened in this case: The resident asserted that her lease was unlawfully terminated because of her disability. Specifically, the complaint alleged that because of various medical emergencies (that required the assistance of an ambulance on more than one occasion) as well as complaints from other residents about the visits from the first responders, the property manager terminated her residential lease.

While I always report there are two sides to every story (and I was not involved here), the California Department of Fair Employment and Housing (DFEH) found probable cause to believe discrimination occurred and that, in fact, management ended the lease because “they disfavor tenants with disabilities.” The apartment complex owner paid $50,000 to settle the case.

The key here, of course, is the reason for the medical emergencies and did the property manager know about the disability? I was recently involved in another matter in which the allegations were similar – except that the reasons for the multiple ambulance and police visits to the property were because of repeated fighting and violence – not because of a legitimate disability. Every resident can be required to follow community rules and a good neighbor policy. And no resident with a legitimate disability should have his or her lease terminated because of that disability. But, similarly, no resident should call 911 night after night because of fighting and not expect management to enforce its community rules.  There is a line there that we have to follow.

Just A Thought.

Over the past couple of weeks, two Fair Housing Defense blog readers asked similar questions about the processing of administrative fair housing complaints. I thought it best to answer the questions together.

Administrative housing discrimination cases can be filed with the U.S. Department of Housing & Urban Development (HUD) or with various state, city, or county anti-discrimination agencies. Pursuant to the Fair Housing Act (FHA), complaints are to be investigated within 100 days of filing. Indeed, for complaints that get referred pursuant to a state, city or county agency, their contract with HUD similarly requires the complaint to be processed within 100 days.

But, what happens if the 100 day clock is missed? Unfortunately, nothing. The investigating agency will typically send out what is known as a “100 day letter” – a form containing a number of reasons as to why the investigation is not yet complete and, sometimes, including a date as to when the determination is expected to be made.  The investigator will check a box or two as to why the complaint needs more time.  Typical responses are “because interviews still need to take place” or “the investigation to date reflects a need for more investigation.”  There are about ten choices for the investigator to choose from.

I write “unfortunately” because even though the FHA requires discrimination complaints to be investigated with the 100 day time frame, the law also provides the 100 day deadline is to be followed “unless it is impractical to do so.” And if the investigating agency is not ready to make a determination, the parties will receive the 100 day letter. Indeed, I have a drawer full of them.

Hope that helps.

Just A Thought.

Readers from California (thank you very much) sent me comments asking for more details about the new rental housing laws in their state. Here are some highlights of the Tenant Protection Act of 2019. In short, California now has a type of statewide rent control and mandates “just cause” to terminate a tenancy.  Some details:

Rent Control.

With respect to rent control (which is subject to some exceptions), the new law prohibits a housing provider from increasing the rental rate by more than 5% plus the percentage change in the cost of living, or 10%, whichever is lower, over the course of a 12 month period.

Just Cause Termination.

The new law requires California property owners show “just cause” to terminate a residential lease, provided a tenant has continuously occupied a residential property for 12 months. “Just cause” can be either “no fault” or “at fault.”

“At fault” just cause includes: default in payment of rent, breach of a material term of the lease (including a violation of a provision of the lease after being issued a written notice to correct the violation), committing or permitting a nuisance; waste; certain criminal activity; assigning or subletting the rental property; refusing to permit the landlord to enter the property; using the property for an unlawful purpose; and failure to deliver possession of the unit after notice.

“No fault” just cause includes: an intent by the owner (or a close family member) to occupy the property (for leases entered into after July 1, 2020, this provision applies only if the resident agrees in writing to the termination or if this type of provision is included in the terms of the lease); withdrawal of the residential property from the rental market; and if the landlord is complying with any of the following—(1) an order issued by a government agency or court relating to habitability that necessitates vacating the residential real property; (2) an order issued by a government agency or court to vacate the residential real property; (3) a local ordinance that necessitates vacating the residential real property; or (4) intent to demolish or to substantially remodel the residential real property.

Property owners desiring to use a “no-fault” lease termination must either waive payment of the last month’s rent or pay for the resident’s relocation.

Again, there are a number of exceptions built into the laws, but these are the highlights. There will be more to come here in California. Hope this helps.

Just A Thought.

In a significant development for housing providers in California, the state legislature passed and the Governor signed a bill (now a law) designed to prohibit property management from discriminating against residents and potential residents who use housing vouchers to pay their rent. The new law expands the definition of “source of income” under California law.

To briefly review, the federal Fair Housing Act (FHA) has seven protected classes, which include: race, color, religion, national origin, sex, disability, and familial status. In addition to those covered under the FHA, California’s anti-discrimination laws include protections for the following additional protected classes: sexual orientation, gender identity and gender expression, marital status, medical condition, ancestry, source of income, age (over 40), genetic information as well as a catch-all class known as protection from discrimination for any arbitrary reason.

This new law expands the definition of “source of income” as a protected class under California law. It provides that property management must now accept a voucher from a local housing authority or other government agency (with the resident paying any balance if the rent is more than the voucher). Now, management is still permitted to use the same credit and criminal background checks as we have done in the past and this is not an effort to force management to lower our rents. Your humble Fair Housing Defense blog editor will continue to review the new law, but it appears the Governor signed the bill to go along with a handful of other resident protection measures, including one to cap annual rent increases at 5 percent (plus inflation) and to prevent management from evicting residents without “just cause.”

At this point, a best practice would be to work with a lawyer like me to ensure that all leasing office team members are trained and have a script to respond to a prospect (or a fair housing tester) calling, emailing, or visiting your California properties with questions about paying their rent with vouchers.

Just A Thought.

In a statement issued at the end of last week, the U.S. Department of Housing & Urban Development (HUD) announced it resolved a disability discrimination Fair Housing Act (FHA) case in California asserting that various housing providers in and around Los Angeles failed to permit assistance animals for residents with disabilities. The settlement includes a payment of $15,000 as well as mandating various training, recordkeeping, and drafting of new anti-discrimination policies.

Factually, a local fair housing tester group filed a complaint after allegedly conducting tests at six Los Angeles area properties in an effort to demonstrate that the housing providers failed to permit residents with disabilities to have assistance animals. The complaint also asserted that employees of the housing providers refused to give individuals with disabilities appropriate information concerning assistance animals. The housing providers denied the allegations, but agreed to amicably resolve the case.

Neither HUD’s press release nor the text of the agreement provide any level of detail to determine what specific facts were contested or conceded. It does appear there were concerns over a perceived lack of ability to communicate in English as well as in other languages, as part of the agreement requires language assistance to those who may need it. There was nothing in the agreement identifying if there were medical verification concerns or if management was unaware of the disabilities of the residents.  I also suspect (but cannot confirm) there was a refusal by the housing providers to permit service and/or emotional support animals altogether, which is a FHA red flag in 2019.

Just A Thought.

Continuing on a theme of late, last week the U.S. Department of Housing & Urban Development (HUD) charged a New York property owner with violating the federal Fair Housing Act (FHA) when he refused to rent an available apartment home to a father with a teenager.

Factually, the property is a mixed-use building with an office on the first floor and two residential units on the second floor. The residential floor contains a two bedroom apartment and a one bedroom apartment. The building also has a parking lot. The apartment in question is allotted one space in the parking lot. HUD’s complaint asserts that the father telephoned the owner to inquire about the one bedroom apartment after seeing an ad for the unit. HUD alleges that the prospective renter believed the apartment would work well and would accommodate his son for the three nights a week that they would be together and that once the son headed off to college, the one bedroom unit would not be too large for him to live in alone.

The applicant completed the necessary paperwork, including a notation that his son would live in the unit part time (in fact, he wrote “1.5” in response to the question of how many people would live in the unit, an answer that vexed the owner). After submitting the application, in a subsequent telephone call between the prospect and the owner, HUD claims the owner said “I don’t want any kids there” and “It is only a one-person apartment” as well as “I don’t want any kids there during the day as I have a dental practice downstairs.” In another call, HUD asserts the owner said he did not more than one person in the unit because he was “concerned with the parking.”

Now, just because HUD makes a factual assertion does not mean it is true. But, for our purposes, this is a useful guide as to what apartment management professionals should never say when discussing housing options with a prospect. Unless the property is designated as housing for older persons, we welcome families with children. Further, while busy parking lots might be perceived as a benign safety reason for not wanting children at a property, that reason will not pass muster with HUD and may get you really needing to speak with a lawyer like me.

Just A Thought.

 

A couple of weeks ago, the U.S. Department of Housing and Urban Development (HUD) charged a couple from Georgia with familial status discrimination pursuant to the Fair Housing Act (FHA). HUD asserts that the couple, who own an apartment building, refused to rent to and made discriminatory statements about families with children.

The case started when a local fair housing group and a mother of two kids filed complaints alleging that the property owners had a policy unlawfully limiting the number of children that could reside in their apartments.  Specifically, HUD claims that the Respondents left a message on their voice mail announcing an occupancy policy to potential renters which permitted only one child in a two-bedroom unit and two children in a three-bedroom unit.

To be sure, occupancy standards are not always one size fits all. Indeed, the 1992 HUD guidance suggesting that a policy of two heartbeats per bedroom was typically reasonable has been superseded such that occupancy standards in 2019 are better evaluated with respect to the number of rooms in the unit generally and size of the bedrooms specifically as opposed to a simple formula. Additionally, some jurisdictions have amended their laws to mandate that 2+1 (or 3) people per bedroom can be appropriate.

As I always make clear, just because HUD has filed a complaint does not mean the allegations are true. But my best advice is not to have a policy on a recorded message which appears to be discriminatory on its face (even if you believe it is for safety or another non-discriminatory purpose). It will be a rare two bedroom apartment home in which only one child is appropriate. Same with a three bedroom apartment in which only two children can live. If you have questions about your occupancy standards and/or the size of your units, it is better to speak with a lawyer like me for advice.

Just A Thought.

I do my level best to be evenhanded when I review emotional support animal (ESA) medical verification letters when I know they have been purchased over the internet after a short self-diagnosis questionnaire and perhaps use of an online assessment tool. There has likely been no legitimate, therapeutic relationship between the patient (who must have a recognized disability) and the individual providing the medical verification. As written here (and elsewhere), anyone can go online and buy what look like a formal letter and/or “certificate” or “registration” from various internet-based providers seeking to make a buck (or more than a buck).  Remember, there is no official ESA registration site or certificate.

While the professional apartment management industry has been doing our best to determine which verifications are legitimate and which are not, our efforts are limited in that the law only permits us to ask certain questions. And, in truth, we have no interest in medical records or other confidential health care information between a therapist and a patient.

Although it was believed the U.S. Department of Housing & Urban Development (HUD) had some new ESA guidance ready last fall, it was never published. And we continue to wait to see what, if anything, is released by HUD or the Department of Justice.

In the interim, a number of states (including at least New York, Virginia, Utah, Texas, North Carolina, New Mexico, New Jersey, New Hampshire, Nevada, Michigan, Maine, and Colorado) have passed various laws or adopted regulations prohibiting the misrepresentation of service animals. The goal, of course, is to discourage those who might otherwise attempt to submit a reasonable accommodation request for an assistance animal that is verified by someone who sells them online.

While I have not seen a list of individuals charged under these laws, the fact that they are now on the books and available for use is a helpful sign as a growing number of state legislatures take fraudulent medical verifications seriously. I will continue to update this list.

Just A Thought.

At the end of last week, the U.S. Department of Housing & Urban Development (HUD) issued a press release announcing that it charged the owner and manager of a condominium community in Colorado with discriminating against families with children under the Fair Housing Act (FHA). In the charge, HUD asserts that the owner and manager refused to rent units to individuals under 35 years of age as well as refused to rent to a fair housing tester who claimed to have a four year old child.

The case came to HUD’s attention when a local fair housing advocacy group challenged a number of newspaper ads which, on their face, appeared to violate the FHA. Specifically, the complaint alleges that the owner and manager placed no less than ten advertisements in a local newspaper offering the property for “1 or 2 people max, both over 40 years of age, no exception.” Other ads promoted the property as a “private, restricted adult…community” requiring renters at least 35 years old.

Now, just because HUD has filed a charge does not mean that the allegations are true. Always remember there are at least two sides to every story. The teaching moment here is simple: do not run advertisements which can be read as discriminatory on their face. A fair housing tester will see the ad as low hanging fruit.

Welcome all to your community, even if you think there is a legitimate, non-discriminatory reason (such as safety) to prohibit children (or to limit children to certain floors, buildings, or areas). If you are uncertain if your ad complies with the law, check with a lawyer like me. We can help with advertising compliance. Indeed, with a few exceptions (and it would not surprise me if the owner and manager here was attempting to designate the property as housing for older persons), the FHA has prohibited “adults only” housing since 1989. And if as is likely here, copies of the questioned ads were kept, it is an easy case for HUD to charge.

Just A Thought.

So, what’s the first thing you should do if your professional apartment management company (or ownership entity or leasing office employee) receives a notice from the U.S. Department of Housing & Urban Development (HUD) or a similar state, city, or county agency informing them that a housing discrimination case has been filed? Of course, the initial answer is to send it to a lawyer like me to ensure an appropriate notice of appearance is prepared and to work on submitting a written response. A lawyer will help to ensure the “other” side of the story is told (and, believe me, I know there are at least two sides to every fair housing complaint). But there is another important step management should take – send the complaint to your insurance carrier to determine if one of your policies includes coverage for discrimination cases.

Sure, some policies specifically exclude this type of coverage, but other policies cover fair housing matters. And finding insurance coverage can be an important step for management. Particularly as you have paid the premium, don’t miss out on potential coverage.

Now, my best advice is to always engage in the interactive process with residents to avoid fair housing complaints (and having to deal with a lawyer like me). But if and when a complaint is filed, always check to determine if an insurance carrier can assist.

Just A Thought.