Yesterday, the U.S. Department of Housing and Urban Development (HUD) approved a $35,000 settlement agreement resolving a fair housing complaint filed against the owner and manager of apartment communities on Long Island (in New York) addressing allegations that various employees discriminated against applicants based on their race. As described in the complaint and conciliation agreement, the allegations were that certain employees treated white fair housing testers posing as prospective residents more favorably than African American fair housing testers posing as potential tenants.

The case started when a local fair housing tester group filed a complaint after several African Americans asserted they thought African Americans were denied the opportunity to rent apartments at a specific property because of their race. After receiving the report, the fair housing group claimed it conducted fair housing tests using individual testers of multiple races who all posed as potential residents. The HUD complaint claimed the tests showed that white testers received more favorable treatment (such as being told about the upcoming availability of units), while African American testers received less favorable treatment (such as being told there was a long waiting list and that no units were available). The property owners denied discrimination of any type, but nevertheless agreed to settle the complaint.

Pursuant to the HUD agreement, the property owners will pay $25,000 to the local fair housing tester group, develop and maintain a non-discrimination policy, as well as provide fair housing training for employees at the property who have contact with prospects, applicants, and residents. Furthermore, ownership agreed to create a $10,000 compensation fund for individuals who were denied housing or received misinformation about the availability of housing at the community because of their race.

Although I was not involved in this case and I have not seen the tester contact reports, management should tread carefully when evaluating facts like this. On the one hand, if multiple individuals report the same type of possible discrimination, that is a red flag. Make no mistake, applicants and prospects must be told the same information concerning availability of units and what the waiting list looks like. To that end, a best practice is to always have a prospect card (old school) or electronic chart (new school) that records the time and date of the contact. Remember, as apartment homes are rented and vacated, your availability register can (and will) change from time to time (including daily if your property is large enough). Also, make clear to track what type of unit a prospect seeks and their desired move in date – for example, you may have a long waiting list for one and two bedroom apartment homes but efficiency units available right now.  Those facts might explain some differences in the testing. Indeed, these are some of the types of questions I ask when I see a general tester complaint. In short, these differences can be absolutely benign. And we will need to prove it up. Or they could reflect a record that something has taken place (or is taking place) such that you might want to speak with a lawyer like me.

Just A Thought.