In a press release issued last week, the U.S. Department of Housing and Urban Development (HUD) approved a settlement agreement concluding a disability housing discrimination complaint against the owners and property managers at a community in Pennsylvania. The total amount to be paid by the Respondents is $80,000. In their complaint, two residents asserted that management failed to approve their reasonable accommodation requests for a reserved parking space, did not permit them to transfer to a first floor home, and that management retaliated against the residents for exercising their rights under the Fair Housing Act.

The case began when the two residents with mobility issues complained that their property management staff refused to permit them to move to a ground floor unit as well as denied their request for a reserved parking space because of their respective disabilities. The residents further asserted that members of the management team retaliated against them for making the reasonable accommodation requests as management moved them to a unit that was claimed to be “substandard” and that management threated to evict them. Furthermore, after being made aware of the concerns, a local fair housing group conducted tests at the housing community which tended to show that the leasing office team would not permit testers (posing as disabled applicants) to be assigned designated parking spaces. As a part of the settlement, both the property owners and managers denied the allegations of discrimination.

Although the agreement does not identify how the settlement fund is to be split between the residents, counsel, and the fair housing group, the owners/managers agreed to pay $80,000 to end the case. As is common in fair housing agreements, the Respondents also promised to develop an equal housing opportunity policy, a reasonable accommodation policy, and to have their representatives with direct leasing responsibilities at the property and/or authority to grant or deny reasonable accommodation requests attend fair housing training.

Although the agreement is light on specific facts, the $80,000 settlement amount is larger than a typical garden variety discrimination case. It is certainly possible that the retaliation claims helped push that amount higher. Also, HUD did not provide any details concerning the number of tests. The takeaway here is that professional apartment management must review and evaluate all reasonable accommodation requests and have a policy in place that follows the law. And even if you decide the request is not appropriate and should not be granted, do your best to ensure no resident can claim he or she was retaliated against because of the accommodation request or because they filed a discrimination complaint. These are hot button issues for HUD fair housing investigators.

Just A Thought.

Although the economic and personal impact of the global pandemic continues to dominate the headlines, I am seeing HUD (as well as various state, city, and county agencies) ramping up efforts on pending housing discrimination complaints. As a part of the Fair Housing Act, investigators are dual tasked when a complaint is filed: (1) to investigate; and (2) to conciliate (legalese for attempt to settle). Sometimes the process goes on at the same time. Sometimes we will try conciliation prior to going through a formal investigation.

From management’s side, there can be any number of reasons to find an early (and amicable) resolution to a complaint, including cost savings, certainty, efficiency, and the ability to move forward with business and not have to respond to emails/calls from a lawyer like me. Now, make no mistake, there are some cases that simply will not settle – such as when unfounded allegations are made by a disgruntled resident/former resident who seeks lottery size winnings – and I will absolutely defend them until I get a No Probable Cause dismissal. Alternatively, the agency may demand extensive reporting for multiple years and/or a donation to a local fair housing group which makes settling a case untenable for ownership.

My point with this post, however, is if you engage in settlement discussions – take a good look at the “boilerplate” and “public interest” provisions in your proposed agreement. Most every investigator will tell you these provisions are “standard” and required in every deal. But, as someone who has done these with HUD as well as many states can affirm – boilerplate is always different. And many times it can be changed. Indeed, even HUD agreements from different regions can have different requirements. Just remember it is NOT one size fits all. And you may want to have a lawyer like me take a look to talk through the facts of the case and what your investigator seeks in an effort to determine if the terms are appropriate.

Just A Thought.

The United States Congress (as well as any number of state, city, and county legislatures) have been at work on various pandemic relief efforts (as they should be).  As these efforts go forward, the apartment management industry needs to be aware the next set of legislative initiatives that might, for example, mandate that property owners accept rent payment plans as well as change how community amenities are paid for by residents.

For example, in an effort to help residents impacted by COVID-19, legislatures (such as the D.C. City Council) are considering and will likely adopt proposals to help residents pay bills, including allowing residents facing financial hardships because of the novel coronavirus to pay missed rent in monthly installments. While I previously noted that as a good management practice during this time, leasing offices should reach out to residents to discuss payment plans, the D.C. City Council is now requiring it. Other proposals are that residents be permitted to pay their utilities via payment plans as well as extending the hold on evictions. (Again, nobody wants to evict anybody – but most properties have mortgages and owners need to pay their banks as well as taxes, insurance, and our employees).

I am also starting to see plans which would require landlords who charge fees for certain property amenities to offer prorated refunds for services or featured amenities no longer available because of the pandemic (such as fitness centers, party rooms, and/or playgrounds). To date, however, I have not seen legislation directing rent reductions if those amenities are included in the monthly rent. At least not yet.

I will continue to follow along and report as appropriate.

Just A Thought.

 

 

 

For many Americans who live in apartment homes, rent for May 2020 is due tomorrow. As noted earlier this month, a best guess is that around 70% of residents made their April 2020 rent payments on time. That is, of course, a lower number than we would have expected under normal circumstances as each week we read that millions of more Americans filed for new unemployment benefits. Here are some of the questions I have received over the past few weeks:

Is rent still due? Yes. Rent is agreed upon in the lease between the owner/manager and the resident.  Leases remain valid.

What if the resident cannot pay? My best advice is to engage in active communication with your residents. Learn who may have lost a job or is caring for a family member stricken with the virus. While management typically does not accept partial payments, this might be a time to amend that policy. Other options include creating a payment plan, using a security deposit and/or waiving late fees during the pandemic.

Can the rent be raised? The residential lease controls the monthly price for the apartment home. The parties can agree to a new lease (with a new monthly lease amount) at any time. Also, remember that if a resident wishes to go month-to-month, many times there is an increase in the rent to pay for that convenience.

Can residents be evicted during this time? Generally, the answer is no. Many courts are closed. Some states are starting to reopen, but many courts have ordered eviction actions stayed for a number of months. For resident living in government-backed affordable housing, in the large relief package passed by Congress, evictions for affordable units are stayed through almost the end of July 2020 (at least for now).

Can residents move? In theory, yes. But it will likely be more of a challenge to arrange for a moving company at this time. My clients report the number of residents submitting notices to vacate are down.

What about a rent strike? In some larger U.S. cities, various tenant advocacy groups are attempting to organize residents to simply stop paying their monthly rent as a way to bring attention to the need for relief because of COVID-19. While I try not to do politics here at the Fair Housing Defense blog, I am not certain that a rent strike is the best way to help the country recover economically.  I would gently note that the apartment building/community most likely has a mortgage and a bank is waiting for its monthly mortgage payment.  Remember, we are all in this together.

What about leasing and maintenance offices? Depending on where the property is located, many leasing and onsite maintenance offices remain closed. To be sure, management continues to operate properties and emergency maintenance is always being addressed. But you might not be able to walk into the office as usual.

What about apartment lobbies, rails, elevators and other common areas? Professional apartment management companies have changed cleaning protocols to address the virus and are working to keep areas as clean as possible. Now, many property amenities in certain states remain closed.

While most leasing offices discussions are professional, might I suggest that management and residents jointly agree to show a bit more patience and courtesy to each other during this time? You will be glad you did.

Just A Thought.

 

 

I will get back to how the pandemic is impacting the professional apartment management industry in my next post, but I wanted to note that at the end of March, the U.S. Department of Housing & Urban Development (HUD) announced that it settled a fair housing discrimination action from California in which allegations of sexual misconduct were raised against the owner and manager of a property for a total of $63,000. The settlement also involved concluding three other matters with related claims.

The proceeding started when two women and a local fair housing agency brought complaints asserting that the community’s property manager sexually harassed residents of an apartment building. Although the building owners and the individual property manager denied the allegations, they agreed to resolve the complaints pursuant to written agreements.

Pursuant to the terms of the settlements, the owners will pay $14,000 to the fair housing group in addition to paying $49,000 to the individuals who filed complaints with HUD. In addition to the financial component, the settlement requires the property manager to be removed from any role in which he interacts with or makes decisions involving residents of the property.

Although this matter started well before the current public health crisis, with a higher percentage of residents now unable to pay their monthly rent, I anticipate there will be an increase in sexual harassment fair housing complaints asserting that someone in property management attempted to use economic hardship from the pandemic to attempt to leverage some type of sexual favor in return for overlooking missed or late rent. Might be worth a quick training reminder.

Just A Thought.

As I type this from my basement office, reports are that somewhere between 25% to 33% of renters did not pay their full monthly rent on or about April 1. That is, of course, a significantly higher figure than any other month to my memory. Leasing office team members from California to Florida are working with individual residents on a one by one basis in an effort to meet their needs. I have heard from management companies noting they are doing delayed payments, partial payments, deferred payments, waiving late fees, waiving interest, and/or discussing early termination options. Another challenge is attempting to determine which residents are legitimately in a financial bind because of the Coronavirus and which are (unfortunately) attempting to use the pandemic to simply skate on their rent (while they continue live in their apartment home). And we have never been in a circumstance like this in which even if management wanted to file eviction actions against otherwise delinquent residents (which we most certainly do not), many local courts are either closed or any number of Governors have mandated a pause on all evictions during this unprecedented time.

My best advice right now remains to communicate. Leasing office team members want to speak with residents.

On a sort of related note, two readers asked me about the ability of landlords to prevent medium to large size gatherings during this time. While every situation is governed by state law and individual leases, here are a few thoughts that might be helpful. The real estate laws generally give management rights to control their apartment communities with an eye toward preventing damage and waste as well as protecting the safety of residents and guests.

Right now, a vast majority of the American population (including my family) is under some type of “Shelter in Place” or “Stay at Home” order issued by many Governors. As such, particularly when a state is under severe restrictions and permits only essential businesses to remain open as well as limiting travel to grocery stores and pharmacies (along with a handful of other approved activities outside of the home), my instinct is that a leasing office could well indeed prohibit random guests or gatherings of people which otherwise would have been appropriate based on the current public health emergency. Hope that helps.

Just A Thought.

 

 

I have heard from two clients with variations on what I suspect may be the next type of request professional apartment management receives from residents during this time of the Coronavirus: a request to terminate a lease early (without penalty) because a resident is vulnerable to catching the virus. The request will be couched as one for a reasonable accommodation and it might well be verified by a health care practitioner.

As written here and elsewhere, a prerequisite to have a reasonable accommodation request granted by management is that the resident be currently disabled (as the term is defined under federal law). To be sure, there are circumstances under which early termination of a lease can be an appropriate accommodation to assist a disabled resident. For example, someone who lives on the third floor of a building (without an elevator) and is in a serious car accident which leaves her with a long term mobility disability such that she cannot climb stairs. In such a case, the resident is not able to reach her unit and, as such, because of her disability one type of accommodation would be to permit her to terminate the lease early, while waiving all fees and/or penalties.

What I am seeing now, however, is a presumptive “I will get disabled if I get the Coronavirus and, as such, I need to move now and you should let me out of my lease.” In my discussions, I have started calling this not a reasonable accommodation request, but a request for a “Compassionate Medical Termination” as it reflects what might happen if the resident catches the virus. There is, of course, no law or guidance yet on this point as we are less than a month into COVID-19 and dealing with the pandemic. I am open to other thoughts, but for now I believe it is up to management to decide if a Compassionate Medical Termination is something you wish to do as a courtesy should you receive such a request.

Just A Thought.

Most likely lost in the COVID-19 news obviously dominating the world right now, last week the U.S. Department of Housing and Urban Development (HUD) announced that it awarded $40 million to various fair housing organizations across the nation to test compliance with the federal Fair Housing Act (FHA) and its state law counterparts. The money was provided through HUD’s Fair Housing Initiatives Program (FHIP) and the Fair Housing Assistance Program (FHAP) to help people who believe they have been victims of housing discrimination as well as to educate the public and housing providers on our fair housing laws.

In the real world, this money helps fund fair housing tester programs which probe professional apartment management (via in person, telephone, and online tests) to determine if we are in compliance with the FHA. And if a fair housing tester group settles a case, they always seek fees claiming “frustration of mission and purpose” such that they should be able to recover the costs of the tests. Yes, that means they are paid twice. Once by the federal government grant and once by the apartment owner/management company resolving the case.

Even during a pandemic, remember the fair housing laws are still on the books. We cannot get lazy. These grants mean management must remain vigilant and train our employees (particularly new hires and those new to the leasing arena) to continue to follow the fair housing laws. The best defense to a FHA complaint, of course, is to never have it filed.  Trust me on that.

Just A Thought.

With the worldwide pandemic set to extend to a new month, both renters and property owners will face new challenges on April 1 – the day when most rents are due. Leasing offices and management companies across the country are bracing for a significant increase in the inability of residents to pay their rent. Like so much else with the Coronavirus, we are making decisions in real time, following ever changing daily orders/decisions from federal, state, and local governments. Here is some of what I am hearing:

*Many local courts across the country are closed. Eviction actions are not considered emergencies.

*An ever increasing number of jurisdictions (states, cities, and counties) have either paused evictions, halted evictions, or while permitting new cases to be filed, not permitting them to move forward. The list of jurisdictions stopping evictions increases literally each day. I recommend checking with a lawyer like me if you have questions about how the laws are changing in your jurisdiction(s).

*While landlords and property owners obviously have compassion for anyone impacted by the COVID-19 virus, apartment owners still are required to meet their mortgage and/or other financial obligations as well.

*That being written, HUD has suspended evictions and foreclosures through April 2020. This federal moratorium, at least as of today, will apply only to homeowners with mortgages insured by the Federal Housing Administration, a HUD agency that backs home loans issued through private firms.

*Many conventional property owners are working with their banks on forbearance agreements if needed because of an expected increase in lease defaults.

*Apartment management employees remain on the front lines doing our best to stay safe in the workplace while meeting the needs of our residents. Our services are particularly acute in those properties with senior citizens or disabled residents. Look, we are not medical professionals (and every health care worker deserves all the appreciation we as a nation can muster right now), but our team members are coming to work to ensure our residents get the maintenance and related services we provide.

There is no easy box here. The number of Americans filing for unemployment during the last two weeks in March has spiked to an unprecedented level. It is anticipated the number of workers facing layoffs or furloughs will continue to increase, at least in the short term.

If I had to guess, I suspect there will be further Congressional action with an eye toward assisting both renters and property owners if indeed the pandemic and “shelter in place” orders get extended for weeks and months to come.

In the interim, my advice is to communicate with your residents. Find out who can pay. Learn who is facing a job loss or if someone requires medical attention. Determine if you want to accept partial payments (something we typically do not do). Think about informal forbearance agreements. Not waiving rent, just delaying amounts due. If this is just a pause for a few weeks, perhaps we can get back on track before the summer.

Just A Thought.

 

Fair to report I never thought I would post an entry about a global pandemic and multifamily apartment communities. We are truly in uncharted waters here and need to best navigate the current environment. Everyone is making decisions in real time with imperfect (and possibly changing) information. It goes without saying that the health and safety of our residents, guests, and employees remain paramount. In addition to following guidelines from the Centers for Disease Control as well as state and local authorities (hey, wash your hands regularly with soap for at least 20 seconds), here are some initial thoughts for apartment management companies:

First, don’t panic. Regional Property Managers and Property Managers are on the front lines interacting with employees and residents every day. Let’s try to make the best decisions we can using all the tools available to us. I would suggest streamlining who makes health-related decisions so as to avoid conflicting messaging. If you have not done so already, I suggest you develop a plan which includes items such as:

*Identifying the person to monitor federal, state, and local public health guidance daily. Incorporate new information into communications to staff and residents as appropriate.  If a staff member does not report to work, have someone reach out.

*In our new era of “social distancing” – think about what amenities may need to temporarily close. Do you have a pool? What about a community or meeting room? Game room? Library? What about a playground? Dog park? To be clear, I am not telling you to shut everything down immediately. One intermediate option could be spread out usage such as to limit the number of people in a given area for a given time. But, as we learn more during the coming days and weeks, think about what makes the most sense for your community and your residents based on the most recent health updates. Look, closing public spaces needs to remain an option on the table at this point.

*Review your cleaning procedures. Obviously, keeping areas clean is now a critical function of managing any property. It is time to re-evaluate your cleaning policies and provide residents information concerning what is being done. For example, you will want to increase the frequency of cleaning hard surfaces (such as phones, tables, light switches, elevators, railings, and doorknobs) and offer residents appropriate cleaning wipes and/or alcohol-based hand sanitizer (if you can find such items, I know) so they can wipe down their personal spaces. Probably makes sense to post signage in common areas (including bathrooms) to remind people of best practices.

*If you use third party cleaning or janitorial company, reach out to those entities to discuss the new cleaning protocols. If you use your own employees, tell them to start immediately. Going forward, all restrooms should be thoroughly cleaned nightly with disinfectants including all fixtures, sinks, counter tops, stall handles and floors. If you can find them, all cleaning personnel should wear gloves at this point and they should dispose of gloves frequently.

*Depending on how the pandemic continues, other steps to think about might be limiting the number of entrances in use so you know who is coming and going (and so those coming in can be offered wipes). This is not to prohibit visitors, but we may want to limit meetings/gathering of large numbers of people. Now, this must not be done in such a manner as to preclude our disabled residents from entering their homes.

There will be more to come. Stay clean and safe. Take care of family. And if you see a health care professional going to work in this day and age, tip your cap.

Just A Thought.