General Fair Housing News & Developments

Last week, the U.S. Department of Housing & Urban Development (HUD) charged a rental property owner in New Jersey with racial discrimination under the federal Fair Housing Act (FHA). In the charging document, HUD asserts that the property owner declined to rent an apartment to an African American woman because of her race. HUD also alleges the owner used racial slurs in various text messages when informing the prospective renter that she was not chosen for the apartment.

Factually, the charge is that the property owner listed an apartment for rent via an online site. Responding to the ad the same day it was posted, the applicant noted she and her son were anxious to move because the unit they were currently living in did not have heat. She reached out via telephone and left a message which was not returned.  Next, the applicant sent a text message to the number in the ad. In response, the property owner allegedly used a series of racial slurs when declining to show the unit to the prospect. Those slurs, of course, were captured on the applicant’s phone and turned over to HUD during the investigation. Following its inquiry, HUD found probable cause to believe the discrimination took place and issued the charge alleging a violation of the FHA.

Obviously, declining to rent a home to a prospect based on race has been against the law for more than 50 years now. Additionally, might I suggest it makes even less sense to send text messages explaining the racial animus behind the decision. Even if the property owner may subsequently contend he was joking and/or not being serious (and I am not involved with this case), using repeated racial slurs with a prospect while declining an application for an apartment is a recipe for disaster in the fair housing arena.

Just A Thought.

A little housing policy inside baseball today. Those of us in the multifamily housing space are waiting for our friends at HUD to act on two matters of interest:

First, as previously noted, HUD issued an advance notice of proposed rulemaking back in June 2018, seeking public comment on whether its 2013 disparate impact rule should be changed in light of the 2015 Inclusive Communities decision issued by the U.S. Supreme Court. In English, the belief is that the Trump Administration will indeed attempt to modify/rescind/alter the disparate impact rule enacted by the Obama Administration five years ago.   Based on an order issued by a federal judge last month in a case challenging the Obama-era disparate impact rule, there is a belief that HUD’s new rule will be published on or before December 18, 2018. I will, of course, be following along as to the progress of the underlying litigation as well as what HUD decides.

Also, I have heard from a handful of HUD (and other fair housing officials) that the Department is “working on” new guidance related to assistance animals. As anyone involved in rental housing is aware, the number of emotional support animal reasonable accommodation requests continues to increase significantly, along with the percentage of those accommodation requests that are medically verified by an online health care provider. Again, we want to get it right. We want to approve legitimate assistance animals needed by residents who are truly disabled. We do not, however, want to approve an animal that was “verified” or “registered” pursuant to a certificate purchased over the internet for the low, low price of $69.99 (or $125 if you need it overnight) in an effort to avoid pet fees. The belief in the industry is that HUD is preparing guidance. I don’t have an expected release date, but you will know as soon as I see it.

My point on both of these issues is that the professional apartment industry just wants to confirm the rules of the road. If disparate impact is indeed covered under the law, so be it.  I am happy to provide that advice.  If HUD confirms that management is permitted to seek supplemental information from an applicant after receipt of what looks like a medical verification purchased with a credit card and doing so does not run afoul of the Fair Housing Act, all the better. And we will continue to proceed on that basis.  But uncertainty is not helpful. For anyone.

Just A Thought.

In a decision published earlier this month, the U.S. Court of Appeals for the Eighth Circuit concluded that a disabled plaintiff has the ability to file a complaint under the federal Fair Housing Act (FHA) against a property management company when management allegedly declined to accept a disability benefits check as an acceptable source of income from the applicants.

The case involved a mother with a disabled adult daughter. The pair submitted an application to rent a unit using disability payments as income. The management company’s income guidelines, however, required pay stubs, an offer letter, or tax returns to verify income. The applicants could not meet that test as their income consisted solely of a disability check, social security, retirement benefits, and some rental income. As the parties engaged in the interactive process, the leasing office suggested it would accept a co-signer who was income qualified. The renters attempted to provide proof of their sources of income. When the parties could not come to an agreement, the plaintiffs sued.

The district court dismissed the complaint, holding that a reasonable accommodation was unnecessary because the defendants offered a solution which the plaintiffs refused. The appellate panel, however, reversed that decision, finding that a reasonable accommodation was indeed necessary because the offered alternative was not a substitute for a “level playing field in housing for the disabled” and that the co-signer option put forward by the defendant instituted “an additional burden on the disabled applicant.”

So, should professional apartment management have income qualification guidelines for your units? Absolutely. Along with a credit and criminal background screening policy, it is a best practice. But, as this court opinion holds, disability payments should be included as an appropriate source of income when running an application.

Just A Thought.

Earlier this week, the U.S. Department of Housing and Urban Development (HUD) sent out a press release to note that it charged a Texas property owner and management company with discriminating against families with children in violation of the federal Fair Housing Act (FHA). In its charge, HUD asserts the owners and management company at El Patrimonio Apartments threatened to fine a family $250 because their two children played in the community area of the complex. Families with children under the age of 18, of course, are one of the seven protected classes in our FHA.

The complaint also alleges that management enacted a policy that mandated children under the age of 18 to be supervised by an adult family member while on the property (including in the pool area) or face a $250 fine. In one specific instance, residents with children were threatened with a fine as their two kids were playing in a community area while being supervised by adults who were not blood relatives.

While there are always two sides to every story, and it is likely management will assert safety as the reason for this type of policy, HUD is clear that if we impose different rules and restrictions on families because they have children, those policies will be subject to scrutiny should a complaint be filed.

When faced with these types of issues, I advise that we work to develop a policies that are neutral on their face and will, I hope, be found to comply with the FHA and its state law counterpart. For example, when dealing with community pools, one option could be to draft your rules to read that anyone unable to swim needs to be supervised by someone who can. That avoids the easy familial status claim as age has nothing to do with the rule.

Just A Thought.

Like many other industries, I have recently seen an increase in another type of lawsuit against professional apartment ownership/management: complaints asserting that a company website is not accessible to those with a visual disability. The claims are asserted under the Americans With Disabilities Act (ADA) and/or similar state law. While a traditional ADA claim involves physical barriers that confronted disabled individuals (things such as high curbs, seating that is not accessible, narrow doors, or fixtures too high for use by an individual in a wheelchair), lawsuits are now being filed claiming that websites (and mobile apps) for apartment communities violate the ADA as they are similarly not accessible. The claim is that someone with a vision impairment cannot review the pictures or other graphics from their computer and, as such, the website violates the ADA.

To date, courts are generally split regarding if a website qualifies as a place of “public accommodation” under the ADA. There are various tests and theories concerning how web sites should be evaluated and courts will continue to issue rulings as more of these cases reach some type of judicial resolution.

There is another possible defense in that as the U.S. Department of Justice (DOJ) has failed to issue guidance concerning the appropriate alt text standards required of websites (indeed, DOJ has now specifically reversed course and disclaimed its prior intent to issue guidelines), how can a company be charged with violating a statute when the federal government cannot even decide what the standards are?

There will absolutely be more to come here, but professional apartment management should be on alert as to your website and/or mobile app. You might want to speak with a lawyer like me to run an analysis of your website and to review the possible risks of this type of lawsuit being filed against your company. Think it won’t happen to you? At last count, more than 1,000 of these ADA complaints have been filed nationwide in 2018, a number that is already more than the 800 cases that were filed throughout 2017.

Just A Thought.

As written in this space many times, an important responsibility for professional apartment management is to know the laws where you have properties. While our federal Fair Housing Act (FHA) has seven protected classes (race, national origin, color, religion, sex, disability, and familial status) many states (as well as some cities and counties) have similar fair housing laws with additional protected classes. And in addition to monitoring changes in the law, another caveat is to also be aware if an agency changes how it interprets existing law. Such is the case in Pennsylvania – in which the Pennsylvania Human Relations Commission (PHRC) just expanded the definition of “sex” as a protected class to now include not just sex assigned at birth, but also sexual orientation, gender identity, gender expression, gender transition, and transgender identity.

What does this mean in the real world? The change permits LGBTQ individuals living in Pennsylvania to file a complaint with the PHRC asserting housing, employment, education, or public accommodation discrimination based on their LGBTQ status.

This change did not come without controversy, as the Pennsylvania legislature did not amend the Pennsylvania Human Relations Act. Nevertheless, the PHRC believed it to be in the public interest to expand the definition of “sex” and the Commission went through a comment period before issuing the amended guidance. After releasing its proposed change in 2017, the PHRC received over 8,000 comments on the topic. I am sure this change will be subject to a court challenge in the near future.

As the lawyer for apartment ownership/management, what do I want? Simple. My preference is always to have a clear understanding of the law and that the number of ambiguities get reduced as much as possible. If a legislature (federal, state, or local) is going to change the law, fine – just let me know what it is so I can provide the best advice possible. Here, although the Pennsylvania legislature chose not to change the law, the PHRC disagreed and issued guidance in an effort to do what the legislature would not. I will report back as appropriate.

Just A Thought.

A little inside baseball in housing law and policy today. Last week, a federal judge in Washington, DC dismissed a lawsuit filed against the U.S. Department of Housing & Urban Development (HUD) in which the plaintiffs (various housing advocates) challenged how HUD enforces one type of fair housing law. In the case, the court determined that the plaintiffs were unable to prove they were harmed by a Trump Administration decision to effectively suspend a rule from the Obama Administration which required communities to address certain type of housing discrimination.

In the complaint, various housing advocates asserted that HUD (through Secretary Ben Carson) had dismantled a May 2015 decision which included use of a computer assessment tool that allowed HUD to oversee whether communities complied with what is known as the Affirmatively Furthering Fair Housing Rule. The 2015 Rule, which took six years to develop, was hoped to force communities to comply with a provision in the Fair Housing Act that mandates local governments use federal money to combat segregation in residential housing. The rule did this by requiring more than 1,200 local communities which receive federal funds to draft plans to desegregate residential housing or risk losing the federal money. The computer assessment tool was developed to analyze housing patterns and poverty as well as differences in jobs, school, and transportation. Once these facts were developed, the 2015 Rule required local governments to address the issues.

In dismissing the complaint, the court concluded it could not “micromanage [HUD’s] choices on program implementation” and that HUD was entitled to withdraw the Obama-era Rule. In a statement following dismissal of the case, HUD noted it “remains deeply committed to the Fair Housing Act and will continue to live up to the spirit and letter of the law” and HUD further believed the computer model was “confusing, difficult to use, contained errors and required an unsustainable level of technical assistance.” HUD stated it will “craft a new, fairer rule that creates choices for quality housing across all communities.”

The takeaway: Affordable housing advocates hoped to use the 2015 Rule as a way to force local governments to act in situations where certain low income housing are believed to have substandard health and/or safety concerns for the families forced to reside there. Those efforts will continue, but not with the computer assessment tool.

Just A Thought.

Professional apartment management companies continue to face an ever increasing number of emotional support animal medical verification letters that are purchased over the internet following just a few clicks on a computer and use of a credit card. As leasing offices do our best to ensure the medical verifications are legitimate (and we want to approve assistance animals for those Americans who are truly disabled), I nevertheless wind up defending against any number of housing discrimination complaints asserting that management is required to accept letters purchased over the internet.

In an effort to help with the review and evaluation process of these emotional support animal medical verification letters, here are some of the issues to be on the lookout for:

  1.  Emotional Support Animal “Registration” Services. Many of the web sites promise to send you an animal registration card to somehow confer magical rights. The truth is assistance animals are not required to be registered. There is no government agency that “registers” these animals.  There is no legitimate approved list.
  2. Instant Approval. A medical verification should come from a licensed or otherwise credentialed health care or medical professional. I find it exceedingly unlikely that any reputable therapist or doctor would instantly approve an emotional support animal based on an online questionnaire and essentially a one-time self-diagnosis.
  3. Bargain or Low Cost Verification Letters. The law intended that an assistance animal medical verification letter come from a licensed therapist or doctor who has an established relationship with a patient. Sounds good, right? But go online and you will easily find what I refer to as the exceedingly questionable internet sites that sell emotional support animal medical verifications for $69.99 (or $149 in you want both a housing and an airline letter) charged on a credit card.

While my leasing offices will always engage in the interactive process with a resident or applicant who makes any reasonable accommodation request, more management companies are seeking supplemental information when we see 10 or 20 of essentially the exact same letter from a handful of the same online sources. There are other red/yellow flags, but these three are common.

In addition to getting the complaints dismissed, my other goal is to educate the investigating agency to make certain they know about the fake internet sites.

Just A Thought.

Three properties I represent (two on the west coast and one on the east coast) are currently involved with residents who separately have submitted reasonable accommodation requests to their respective leasing offices.  All good as professional apartment management has the obligation under the law the review, evaluate, and respond to each of them.

The three requests came from residents with different claimed disabilities (none of which were obvious or otherwise known), but they have the same request:  that management make a financial accommodation because of a disability.  The typical reasonable accommodation, of course, involves a change in a rule or a policy designed to ensure a disabled resident is still able to enjoy the full benefits of his or her housing.  The three submissions ask that management:  not raise rent, accept less for rent, and to cease eviction proceedings from a resident who is behind on her rent but does not wish to leave.

Setting aside the facts that none of the three requests (again for claimed disabilities which were not obvious and were not known to the leasing office) were medically verified, I have legitimate questions about each because of the financial nature of the requested remedy.  Now, while I understand (and agree) that the law presumes there may be a small financial cost associated with granting a request, I am unaware of guidance mandating that management reduce agreed upon rent as an accommodation.  For example, if a resident on the third floor of a building without an elevator suffers a mobility impairment, it could well be appropriate to let the resident out of his or her lease early as an accommodation, without charging any otherwise due early termination fees.  That is a cost to management.  Again, the point of the law is to help disabled residents obtain the full benefit of their housing— not to get a benefit not available to anyone else.

To phrase it another way, every resident (disabled and non-disabled alike) would benefit from a reduction in rent, not paying rent, or not getting evicted for failing to pay rent.  What I fear we are now seeing is residents (with or without counsel) attempting to use the reasonable accommodation process to avoid their financial obligations because of a claimed disability.

In my experience, financial accommodations like those sought here are not part of our federal Fair Housing Act.

Just A Thought.

Earlier this month, the California Department of Fair Employment and Housing (DFEH) announced that it settled a housing discrimination action against a property owner brought by a man who claimed he was denied the opportunity to rent a home because he was not legally married to his partner.  The allegations included that the potential resident was offered a lease for a home in San Diego, but upon disclosing that he planned to live with his boyfriend, the potential resident was told that both he and his partner had to individually satisfy a $90,000 yearly income standard. Following an inquiry about whether the two men could aggregate their incomes to satisfy the income requirement, they were told that they could only do so if they were married. And as the two individuals were not married, the two potential renters had to find another home to rent together.

After an investigation, the DFEH found probable cause to believe a violation of state law took place. Following a mandatory conciliation process, the property owner and manager agreed to pay $7,500 to resolve the claims. As is common in these types of cases, in addition to paying the money, the owner/manager was required to attend annual fair housing training and to ensure that fair housing brochures are provided to current and future applicants for the next two years.

The lesson here is that California, like some other states, includes additional protected classes in its state anti-discrimination law (in addition to those covered in the federal Fair Housing Act). Other protected classes in California include: sexual orientation; gender identity and gender expression; marital status; medical condition; ancestry; source of income; age (people over the age of 40); genetic information (also known as family medical history); and any arbitrary discrimination (which means a person cannot be discriminated against for any other arbitrary reason).

If you are involved in the professional apartment management business, you must know the state (or even local) laws in your jurisdictions to help ensure you comply with them. If you are uncertain, ask a lawyer like me for guidance on protected classes where your property is located.

Just A Thought.