Fair Housing Retaliation Liability Risks & How to Avoid Them
“Retaliation” is a fancy word for revenge. It’s a nasty action that you take to get back at somebody for doing something bad to you. In the context of fair housing, retaliation means an unfavorable action a landlord takes like rejecting a rental applicant or evicting a tenant because he complains about discrimination or exercises any of his other rights under discrimination laws.
While landlords who deliberately abuse their power in this way deserve whatever liability they incur, retaliation can also happen inadvertently. Risk of liability comes into play any time you reject, evict, raise the rent, or make housing decisions that negatively affect a person who’s previously exercised a fair housing right. This is true even if retaliation was the furthest thing from your mind. Moreover, while prohibition against retaliation has always been a fundamental part of fair housing laws, retaliation claims against landlords have increased noticeably in recent years.
How does retaliation happen and what can you do to avoid it? Those are the questions this month’s lesson will answer. First, we’ll explain the laws of retaliation and the conundrum they pose when dealing with protected individuals after they’ve engaged in protected activities. Then, we’ll outline eight rules to follow to ensure that your rental staff is sensitive to retaliation liability risks and the actions they can take to defuse them. At lesson’s end, you can take the Coach’s Quiz testing your knowledge of the lessons and ability to apply them in real-life situations.
WHAT DOES THE LAW SAY?
Retaliation is a form of discrimination that the federal Fair Housing Act (FHA) bans. The rule stems from Section 818 of the FHA, which makes it illegal to “coerce, intimidate, threaten, or interfere with” any person “on account of his having exercised” any right the law protects. Regulations and court decisions interpreting the provision have made it amply clear that acts of retaliation violate Section 818.
In a retaliation proceeding, there are four things that the rental applicant, tenant, or other complainant (which, for simplicity’s sake, we’ll refer to as “tenant,” except where the context requires otherwise) must prove to make a valid case:
1. Tenant Exercised a Fair Housing Right
First, tenants must show they exercised a fair housing right. Suing the landlord is an obvious example. However, “exercising” a fair housing right can also take more subtle forms, such as:
- Requesting accommodations for a disability;
- Reporting a discriminatory housing practice to a landlord or an authority; and/or
- Talking to a HUD official, bringing a complaint, testifying, assisting, or participating in any way in an FHA proceeding.
2. Landlord Knew of Tenant’s Exercise of the Right
To be liable for retaliation, tenants must show that the landlord knew that they exercised a fair housing right. A landlord is considered to have knowledge if a leasing agent or other employee knew of the activity.
3. Landlord Took Adverse Action Against Tenant in Response to the Exercise
Next, tenants must show that they were on the receiving end of some “adverse action” from the landlord after they exercised the fair housing right. Examples include:
- Rejection of a rental application or renewal;
- Rent increases and other unfavorable rental terms;
- Bringing a lawsuit without any reasonable basis;
- Threats to engage in the above or any other adverse actions; and
4. The Landlord Took the Adverse Action Because of the Exercise
The first three requirements are usually easy to prove. That’s why most retaliation cases come down to the fourth element: Whether the exercise of the fair housing right was the reason the landlord took adverse action against the tenant. Note that retaliation doesn’t have to be a landlord’s only motive for taking adverse action against a tenant; it need only be one of the factors in the decision. In other words, a retaliatory motive taints the entire decision even if there were legitimate, nondiscriminatory motives as well.
Timing Is Everything—Or Is It?
Because landlords rarely admit that the adverse actions they take are in retaliation for the exercise of a fair housing right, there usually must be some other evidence of the landlord’s retaliatory motive. The most common form of evidence is timing. Adverse action that occurs after a tenant exercises a protected right creates the inference that it happened because of the exercise. The smaller the time interval, the stronger the inference. Thus, evicting a tenant 24 hours after she makes a fair housing complaint puts you in a terrible position at trial.
Even so, the mere fact that adverse action comes after exercise of a right isn’t enough to prove retaliation. Maybe the timing was just coincidental. Besides, exercising a fair housing right doesn’t mean tenants can do whatever they want. After all, a tenant who hasn’t paid rent in months shouldn’t be able to avoid eviction simply because he previously filed a discrimination complaint against his landlord.
Example: A tenant claimed that her Colorado landlord threatened to evict her after she complained that he was discriminating against families with children. The landlord admitted to making the threat but insisted he made it because of the tenant’s refusal to follow a community rule requiring all tenants to put heat tape on their water supply pipe. The HUD administrative law judge (ALJ) found that the evidence supported this explanation and tossed the retaliation case [HUD v. Quintana, HUDALJ 08-92-0239-1 (1994)].
Tenants suing for retaliation have the burden of proving each of the above four elements. That can be a huge advantage in your favor. It means that all you have to do to defeat a case—or better yet, deter tenants from bringing it in the first place—is knock out one of the required elements. While any one of the four elements will do, targeting the fourth element requiring proof of retaliatory motive is almost always the most promising strategy.
8 RULES FOR AVOIDING RETALIATION LIABILITY
You can minimize your liability risks for fair housing retaliation by ensuring your leasing agents and management staff follow these eight rules.
Rule #1: Don’t Retaliate Deliberately
The starting point is to strictly prohibit your staff from targeting tenants for complaining about discrimination or engaging in any other form of protected activity. “Weaponizing rental, renewal, or other leasing decisions to punish fair housing ‘trouble makers’ is a recipe for liability disaster,” cautions a Georgia fair housing consultant. Unfortunately, the six-figure damage awards being handed out against landlords suggests that deliberate retaliation remains an all-too-common occurrence.
Example: A Los Angeles area landlord shelled out $225,000 to settle charges of raising the rent, threatening to evict, and taking away a family’s parking space because of their association with another family that was evicted because they had a disabled child [Downey Property Management, et al., Calif. Dept. of Fair Employment and Housing press release, October 2018].
Example: An Ohio landlord paid $177,500 to settle charges of sex harassment against at least 20 tenants, including refusing to make repairs for women in retaliation for spurning sexual advances [US v. Klosterman, (S.D. Ohio), Oct. 1, 2020].
Taking adverse action might be especially tempting when a tenant’s discrimination accusation or complaint is totally bogus. But while it may seem unfair, retaliation is still illegal even if the accusation that brings it on is false; all that’s required is that it be made in good faith.
Rule #2: Don’t Try to Keep Tenants from Exercising Their Fair Housing Rights
Don’t do or say anything to pressure or persuade a tenant who expresses fair housing complaints or concerns not to pursue a fair housing complaint. Once a tenant comes to you with a fair housing complaint, your first reaction might be to try to set things right so you don’t end up getting sued. The irony is that in seeking to prevent a fair housing lawsuit, you might actually be inviting one. That’s because your efforts might be seen as an illegal act to “coerce, intimidate, threaten, or interfere” with fair housing rights.
So refrain from making not just threats but also promises or inducements that may be seen as bribes designed to stop the exercise of a fair housing right. Although you can offer constructive solutions, you should make it clear that your suggestions are just that—suggestions—and don’t preclude tenants from filing a complaint or pursuing their other fair housing remedies.
Rule #3: Don’t Charge Tenants Fees for Exercising Their Fair Housing Rights
Another form of retaliatory activity banned by Section 818 is charging tenants fees, deposits, or extra rent for exercising their fair housing rights. Common examples include charging fees for providing disabled tenants handicap-accessible parking spaces or other reasonable accommodations that the FHA requires.
Example: A Colorado condo association fined a tenant with epilepsy for allowing her to keep a service dog in violation of its “no dogs” policy. The tenant sued for retaliation. The association asked for dismissal without a trial. HUD considered the case so important that it intervened on the tenant’s behalf. Fining a tenant for requesting an accommodation is evidence enough to support a retaliation claim, regardless of whether the underlying accommodations claim was valid, the government argued. The federal court agreed and allowed the case to go forward. Retaliation claims stand on their own and aren’t dependent on the validity of the underlying discrimination claim that prompted them, the court concluded [Arnal v. Aspen View Condo. Ass’n, et al., 226 F. Supp. 3d 1177 (D. Colo. 2016)].
Rule #4: Differentiate Between Retaliation and Legitimate Enforcement
This is the most important rule of the entire lesson. There’s a big difference between retaliation and enforcement of rental application and lease rules. Stated differently, protection from retaliation doesn’t require you to accept an unqualified rental applicant or tolerate a tenant’s failure to pay rent or other serious violations. Thus, a tenant isn’t allowed to create a serious disturbance on Tuesday just because he complained about a fair housing issue on Monday.
The key question: How do you enforce your rental qualifications and lease rules against applicants and tenants after they’ve exercised a fair housing right? The answer is not by refraining from taking the action but by ensuring that you can justify it by showing that you did it for legitimate, nondiscriminatory reasons having nothing to do with the previous exercise of a fair housing right.
Example: A Pennsylvania public housing tenant filed a state discrimination complaint contending that she was sexually harassed by maintenance workers and her neighbors over the course of her 10-year tenancy. A few months later, she was evicted. Although the timing was mighty suspicious, the federal court ruled in the landlord’s favor and dismissed the case.
The landlord won because the tenant couldn’t get past the fourth prong of the retaliation test by proving there was a causal link between the eviction and the fair housing complaint. And the reason she couldn’t prove this was because the landlord was able to demonstrate that it had received multiple complaints about the tenant in the months after the sexual harassment complaint. Neighbors accused her of verbal assault, beheading a neighbor’s cat, and inviting a neighbor’s child into her apartment and not letting her go until the police arrived. So, the court concluded that the eviction was for a legitimate and nondiscriminatory reasons and not an act of retaliation for filing the sexual harassment complaint [Madison v. Philadelphia Housing Authority, Civil Action 09-3400, E.D. Pa., June 2010].
Rule #5: Document Legitimate Reasons for Taking Adverse Actions
Doing what the landlord was able to do in the Madison case is the blueprint for not only defeating but preventing retaliation claims. To achieve that objective, you must keep careful records documenting your rental and leasing decisions. Specifically, you must be able to demonstrate the legitimate and nondiscriminatory bases for the rules and standards you establish and the actions you take to enforce them.
Without these records, it will be easy for the people you reject, evict, fail to renew, etc. after they engage in protected fair housing activity to claim that you retaliated. The documents are essential to counteract these claims and show the policy, action, or decision was justified and not a pretext for retaliation.
You also need documentation any time you amend your community bylaws, policies, rental standards, and rules of conduct. Otherwise, a tenant might claim that you made the change to retaliate against them for exercising a fair housing right.
Example: The owner of a Georgia condo claimed the community association deliberately adopted new rent restrictions to keep her from following through with her plans to rent the unit to an African-American woman. Although the deal did go through, the owner sued the association for trying to stop it. The association denied the charges and insisted that the bylaw changes had nothing to do with the proposed rental.
Thus, as is often true in retaliation litigation, the case boiled down to the evidence of the housing provider’s intentions. Unlike the landlord in Madison, the association in this case couldn’t come up with evidence justifying its proposed new rental restrictions. In fact, the absence of discussion of the change in the corporate meeting minutes belied the association’s contention that they were already in the works at least a year before the proposed rental arrangement.
By contrast, there was evidence suggesting that the association was concerned that leasing the unit to an African-American tenant would reduce property values and lead to protests by other owners in the community. Result: The Georgia state court ruled that there was enough evidence to allow the case to go to trial. Having lost its bid for dismissal, the condo association then faced an unenviable choice: Pay a hefty settlement or risk a trial [Bailey v. Stonecrest Condo. Assoc., Inc., 2010 WL 2472501 (Ga.App.)].
Rule #6: Enforce Your Rules and Rental Criteria Consistently
Showing that an enforced policy is legitimate and nondiscriminatory isn’t enough to justify an adverse action against a tenant who has engaged in protected activity; you must also be able to show that the action is consistent with your previous practices. Otherwise, it might look like you’re singling out the tenant for selective enforcement. Thus, for example, failure to follow pool rules would look like a pretext for not renewing a tenant if you let other tenants get away with similar violations.
Deciding not to renew the lease of a person who has engaged in protected activity is a frequent source of retaliation claims, attorneys warn. Accordingly, they suggest that you create a policy for nonrenewals and apply it consistently to all tenants. In addition to listing clear and legitimate criteria for nonrenewals, the policy should require staff to create a memo documenting its discussions about and reasons for not renewing a tenant. These records can put you in a strong position to defend against a claim for retaliatory nonrenewal.
Rule #7: Don’t Retaliate Against Third Parties
FHA protection from retaliation covers not only rental applicants and tenants claiming to be victims of discrimination, but also third parties who help or encourage them to pursue their fair housing rights. That includes fair housing associations and even your own employees. Result: It’s illegal to fire, demote, transfer, cut the pay of, harass, or take other unfavorable employment action against an employee for speaking up against discriminatory practices or advising aggrieved tenants to contact HUD or other fair housing agencies.
Example: Owners and managers of a Kansas City high-rise rental community shelled out $2.13 million to settle allegations of creating a racially hostile environment and retaliating against a former employee for cooperating with HUD investigators and helping others file complaints with HUD. The abuse, complete with hangman’s nooses and racial slurs, was so bad that the federal court also issued an order permanently banning the community manager from working in rental housing and ordering her to pay a $55,000 civil penalty [U.S. v. Sturdevant, Civil Action No. 07-2233-KHV, Fed. Dist. Ct. Kansas, May 2010].
You can also get into trouble if you take retaliatory action against tenants for opposing discrimination against their neighbors. This is true even if the tenant targeted for retaliation is white or otherwise not part of a protected class under the FHA.
Rule #8: Implement a Non-Retaliation Policy
Although it’s never fun when a rental applicant or tenant comes to you with a discrimination complaint, discouraging such reports could expose you to liability for interfering with the exercise of fair housing rights under FHA Section 818. Moreover, these reports should be welcomed because they can help you identify and root out hidden discrimination problems in your community.
The problem is that people may be reluctant to speak up because they fear retaliation. For example, suppose an applicant hears a leasing agent use a racial slur. What you want her to do is come forward and tell you. But the applicant won’t do that if she thinks it might lead you to reject her. As a result, she may tell a local fair housing organization instead.
One way to overcome these natural misgivings is to adopt a policy assuring applicants and tenants that they won’t suffer retaliation if they report discrimination. Your non-retaliation policy, like our Model Anti-Retaliation Policy, can be either freestanding or part of the general notice or policy you post in your rental offices and communities to indicate that you’re an equal opportunity provider who’s committed to following fair housing laws.
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|October 2021 Coach's Quiz|