How to Avoid Fair Housing Trouble When Evicting Residents

The expiration of eviction moratoria could bring a surge in eviction filings—and related fair housing claims.

 

 

This month’s lesson considers one of the most frequently overlooked and misunderstood aspects of fair housing compliance: liability for discriminatory eviction. The vast majority of the literally thousands of fair housing lawsuits filed each year involve pre-rental screening, refusals to rent, and other issues that arise before a resident actually signs a lease and moves in. But compliance challenges aren’t confined to the rental process. Residents don’t check their fair housing rights at the door when they move into a new community. Protections against discrimination continue through the tenancy, including at the point a community seeks to end it by bringing or even threatening eviction.  

While it’s as old as the fair housing laws themselves, potential liability for discriminatory eviction is an especially timely concern now that the temporary eviction moratoria issued by the CDC and many states are winding down.

As with so many other aspects of fair housing, good and honest intentions aren’t necessarily enough to ensure compliance during an eviction. Owners and property managers who have legitimate and nondiscriminatory grounds to evict a resident protected by the fair housing laws, including nonpayment of rent, can still get into trouble if they make mistakes during the process.

This lesson will explain how fair housing laws apply in the eviction context and describe the liability risks associated with COVID-19. We’ll then set out six rules to help you steer clear of discrimination pitfalls while contemplating or seeking to evict residents protected by fair housing law. To help you nail down the lessons, we’ll give you a Quiz requiring you to apply the rules to hypothetical scenarios that may actually arise, especially during the pandemic.   

WHAT DOES THE LAW SAY?

The federal Fair Housing Act (FHA) is a 52-year-old civil rights law that bans discrimination in the “sale or rental of a dwelling, or in the provision of services or facilities in connection therewith,” because of race, color, religion, sex, handicap (disability), familial status, or national origin.” Many states also ban discrimination on other grounds, such as sexual orientation, gender identity, political beliefs, and source of income.

Technically, the argument could be made that eviction doesn’t count as “sale or rental” or “provision of services.” However, regulations from the U.S. Department of Housing and Urban Development (HUD), the agency responsible for administering and enforcing the FHA, specify that “evicting tenants because of their race, color, religion, sex, handicap, familial status, or national origin” is a form of refusal to rent. This is also the position that courts and administrative tribunals have consistently taken over decades of case law.

The COVID-19 Factor. The FHA ban on discriminatory eviction has assumed a new significance during the pandemic to the extent that COVID-19 is likely to count as a “disability” under the law. We say “likely” because we can’t be 100 percent sure about this since neither the FHA nor regulations specifically mention COVID-19 or any other infectious illness. But interpreting COVID-19 as a disability is consistent with both the letter and spirit of the FHA:

• The FHA definition of disability as a physical or mental impairment that substantially limits one or more major life activities, such as sleeping, working and eating is clearly broad enough to cover COVID-19, especially those who must self-isolate because of the virus; and
•  Protecting persons who have or are perceived as having COVID-19 furthers the fundamental objective of disability discrimination laws to protect people with disabilities from discrimination based on prejudice, stereotypes, or unfounded fears.

HUD has applied this logic in previous guidance dealing with another infectious illness that triggered evictions: HIV/AIDS. The guidance title pretty much says it all: “Housing Discrimination because of HIV/AIDS is Illegal” (April 7, 2015). Courts across the country have also taken this position in barring owners from evicting residents because they had—or the owner thought they had—HIV/AIDS or another infectious illness.

DEEP DIVE

CDC and States Temporarily Freeze Residential Evictions for COVID-19

In these times of COVID-19, the FHA is hardly the only or even primary legal barrier that you’ll face if you seek to evict a resident. You may also have to contend with a moratorium on evictions, depending on where your property is, whom you evict, and when you bring your action.

CDC Eviction Moratorium. On Sept. 4, 2020, the U.S. Centers for Disease Control and Prevention (CDC) issued a nationwide moratorium banning owners from evicting residents for nonpayment of rent or other charges such as late fees if those residents:

• Have less than $99,000 ($198,000 for two-adult households) in total income for 2020, or if they received a stimulus check this year, or didn’t pay income tax in 2019;
• Can’t pay full rent because they lost income or have very high medical bills;
• Would become homeless or forced to live in crowded conditions in somebody else’s home as a result of being evicted;
• Promise to pay as much of their rent as possible on time;
• Made best efforts to apply for any available government rent and housing assistance; and
• Give the owner a written copy of the CDC declaration signed by each adult in the household.

The CDC moratorium expires on Dec. 31, 2020, unless it’s extended. Even if it does run out, some believe that the new Biden administration will restore the moratorium or some version of it immediately after its Jan. 20 inauguration.

State Eviction Moratoria. Make sure that your state hasn’t implemented its own eviction moratorium. If it has, check when it expires. Also check for applicable exceptions. Although terms vary, state moratoria typically exclude evictions for:

• Significant unpaid rent arrears incurred before the pandemic;
• Residents who create dangerous or serious nuisances; and/or
• Owners who need to evict so that they can use the apartment or unit as their own primary residence.

6 RULES FOR AVOIDING DISCRIMINATION LIABILITY

WHEN EVICTING A RESIDENT

Rule #1: Hold Everyone to the Same Standards

The cardinal rule of FHA compliance is consistency and treating all residents the same regardless of race, race, color, religion, sex, handicap, familial status, or national origin (and any other characteristics protected by the fair housing laws of your particular state). The starting point is to hold all residents to the same baseline standards. Barring an eviction moratorium or other emergency decree, you have the right to insist that all residents pay their rent in full and on time. And even with a moratorium, you have the right to ensure that residents keep their units sanitary and refrain from disturbing their neighbors in accordance with the provisions of their particular lease agreement. Failure to meet these legitimate, nondiscriminatory expectations is grounds for eviction regardless of whether those residents belong to a class protected by the FHA or state fair housing laws.

What will get you into trouble is singling people out for breaking the rules while tolerating the same violations from other residents, especially when the resident targeted for eviction is part of a protected class.

Example: John is a long-time resident who diligently pays rent on time and who happens to be white; Jane is a new resident who happens to be African American. John and Jane both pay rent late in April. The property manager charges Jane late fees but lets John slide. In the manager’s eyes, this is perfectly legitimate since Jane has yet to earn his trust the way John has. But this inconsistency in treatment is evidence of deliberate discrimination on the basis of race and sex that the community would have the burden of refuting before a court or administrative tribunal, if Jane accused the community of discrimination.

The COVID-19 Factor. Disparity in treatment is especially dangerous in these times when owners are renegotiating leases with residents who can’t pay rent due to COVID-19. The common practice of negotiating with residents on an individual basis results in different deals. While this variance in terms and concessions among residents of the same community may be nothing more than the reflection of the circumstances and dynamics of the particular negotiation, they may also be evidence of discrimination to the extent that residents in protected classes get less favorable terms.

Owners and managers who are negotiating COVID-19 rent relief agreements with residents need to be aware of these risks and guard against them. One way to do that is to establish a standard relief deal template offering the same terms to all residents.  

Rule #2: Don’t Impose Restrictions on Residents Because They Have or May Have COVID-19 or Other Disabilities

Owners have a responsibility to take steps to prevent the spread of COVID-19 in their communities, including measures that have a direct impact on residents, such as implementing social distancing, face mask use, and hygiene rules in common areas and limiting outside visitors. Failure to abide by these rules may be legitimate grounds for eviction. But what you can’t do is evict or treat residents unfavorably because they have or may contract COVID-19.

Keep in mind that COVID-19 is considered a disability and that the law bans discrimination against people who have or are perceived as having a disability, even if that perception is wrong.

Example: In 2012, a federal appeals court ordered a Virginia owner to pay $150,000 in damages for discriminating against a resident based on its mistaken belief that she had a disabling condition called multiple chemical sensitivity. For years, the resident complained to the owner about the debilitating physical symptoms she was suffering as a result of exposure to paint fumes, tobacco smoke, and mold at the community. The owner made some efforts to respond to her accommodation requests. But when her lease came up for renewal, the owner insisted she convert to a month-to-month tenancy at a much higher rent, and refused to let her move to another one of its properties.

The resident sued for disability discrimination. The problem was that she couldn’t prove she was actually disabled. As it turned out, she didn’t need to. That’s because at trial, the property manager, who was insistent that the resident’s chemical sensitivities had nothing to do with the decision not to renew her, blurted out that he was tired of accommodating her sensitivities and set out to “build a case” to get rid of her. And that’s all the court needed to hear to hit the owner with a six-figure damage award for discrimination on the basis of a perceived disability [Matarese v. Archstone Communities, LLC, February 2012].

The COVID-19 Factor. All of this clearly suggests that evicting, threatening to evict, or otherwise excluding residents because they have, or you just think they have, COVID-19 is discrimination. The same is true of other purported health and safety measures based on stereotypes or unfounded beliefs about the disease. Examples:

• Evicting residents who work in healthcare facilities because they pose a risk of infecting others in the building;
• Excluding residents because they come from places with outbreaks or China and other countries associated with COVID-19; and
• Requiring residents to undergo medical assessments or provide you private information about their health.

Example: In June 2020, the owner of a Pennsylvania senior living home agreed to pay a minimum of $305,000 to settle charges of disability discrimination against residents. Among other things, the lease required all new residents to undergo an initial physical assessment and allowed for eviction if they developed certain infectious illnesses or health conditions. The owner also charged residents who used wheelchairs a non-refundable deposit [United States v. Heritage Senior Living, LLC, June 25, 2020].

Rule #3: Make Reasonable Accommodations for Residents with Disabilities

Simply refraining from exclusion or adverse treatment isn’t enough. The FHA also requires communities to make “reasonable accommodations” for residents with disabilities. Reasonable accommodations include changes in rules, policies, practices, or services that are necessary to give residents with disabilities equal opportunity to use and enjoy the space they rent. Perhaps the most common accommodation is an exemption to a no-pet policy for residents with disabilities who have assistance animals.

Example: In August 2013, an Illinois court ruled against a condo community that tried to evict a long-time resident for keeping cats in her unit in violation of its no-pet policy. The resident didn’t deny the charge but produced a letter from her doctor indicating that the cats were medically necessary for the resident’s emotional support. But the community was unimpressed and threatened to evict her unless she got rid of the cats. So, the resident sued for disability discrimination.  

The court ruled that the resident had a valid legal claim and refused to dismiss the case. Although the pet policy was valid and enforceable, the resident had kept the cats in her unit for 11 years and there was evidence showing that she needed them for her emotional illness. Accordingly, it allowed the resident to go to trial to prove that the community didn’t reasonably accommodate her by making an exemption to its no-pets policy [Myers v. Condominiums of Edelweiss, Inc., August 2013].

The COVID-19 Factor. Although courts have yet to address this issue, not evicting a resident for nonpayment of rent may be considered a reasonable accommodation for persons who can’t pay because they lost their job as a result of getting COVID-19. By the same token, the law doesn’t say you must make any accommodations a person with disabilities requests but only accommodations that are “reasonable.” Government guidelines and case law clarify that accommodations aren’t required if they’d impose an undue financial or administrative burden. Unfortunately, there’s no bright line definition or concrete formula for determining whether a particular accommodation is reasonable. That leaves courts and tribunals to decide the question case by case based on the specific circumstances involved.

Note, though, that HUD has weighed in on allowing residents with disabilities to pay their rent late, without penalty, in certain circumstances. In July 2020, HUD accused a Georgia housing provider of violating fair housing law by refusing to accommodate a resident with disabilities by changing the due date of his rent so that it coincided with the date he received his disability benefits from the government. HUD argued that changing the due date would be a reasonable accommodation that wouldn’t impose an undue burden on the community [HUD v. Tzadik Georgia Portfolio, LLC, et al, FHEO No. 04-19-6405-8].

So, in the case of residents who are receiving government assistance due to COVID-related disability, if that assistance allows them to pay their rent in full but late, you may want to consider changing the date rent is due accordingly.

Rule #4: Beware of Retaliatory Eviction

There’s another way that evicting a resident who belongs to a protected class can be considered discriminatory, namely, when you initiate it for purposes of retaliation. Explanation: The FHA makes it unlawful to “coerce, intimidate, threaten, or interfere with” persons who have exercised their rights under the law, including making requests for accommodation, or who have helped or encouraged someone to do so. Retaliatory eviction and threats of eviction count as coercion, intimidation, threats, and interference. Result: Regardless of how legally sound your case for eviction is, seeking to evict a resident after she has requested accommodations or filed or threatened to file a discrimination complaint exposes you to risk of liability for retaliation.

Example: A Michigan resident unable to work due to congestive heart failure, diabetes, and high blood pressure relied on Social Security Administration (SSA) disability benefits as his sole source of income. And since his SSA check didn’t arrive until the middle of the month, the resident asked the owner for permission to pay rent on the third week of each month. Two days later, the owner went to court to evict him. Although the timing may have just been a coincidence, the resident claimed the eviction was retaliation for making a request for accommodations. Rather than risk a trial, the owner shelled out $50,000 to settle the case [United States v. Fairway Trails Limited, January 2007].  

Of course, residents don’t get blanket immunity. A resident who engages in a protected activity may deserve to be disciplined for infractions not related to that activity. Thus, the resident who fires a gun at his neighbor on Tuesday shouldn’t be exempt from eviction simply because she happened to request an accommodation on Monday. The problem is that once those rights are exercised, subsequent eviction action automatically introduces risk of liability for retaliation. Even so, the resident claiming retaliation has the burden of proving:

• He or she requested accommodations, filed a discrimination claim, or exercised other FHA rights;
• The community was aware of this exercise of rights;
• The community took some kind of adverse action against the resident after the exercise of the right; and
• The exercise of the right was at least one reason the community took the adverse action.

The first three prongs are pretty much a slam dunk in a typical eviction proceeding. So, the case typically boils down to the fourth prong and whether the resident can show a connection between the eviction and the exercise of the right. Although not dispositive, timing is often a crucial factor in this determination. The less time between exercise and eviction, the stronger the implication that eviction was because of exercise. The owner in the Fairways Trails case above likely recognized that eviction two days after an accommodations request didn’t look good and made the sensible decision to settle.  

To protect yourself, you need to be sensitive to timing and try to avoid evicting residents right after they exercise FHA rights. But while timing is important, the most important factor is being able to show that you have a legitimate, nondiscriminatory reason to evict that is in no way related to the protected activity, preferably for actions and omissions that occurred before the activity occurred.

Rule #5: Document Your Eviction Decisions and Actions

You run the risk of a discrimination claim any time you evict a resident who’s protected by fair housing laws. Even if your reasons for eviction are 100 percent valid, you can’t prevent residents from calling your motives into question and raising discrimination claims either in the eviction case or a separate lawsuit. To defend yourself, you’ll need to be able to provide HUD investigators, courts, or tribunals—depending on the case and the forum in which it’s brought—written records documenting that you had legitimate, nondiscriminatory reasons for seeking eviction.

Thus, if eviction is for nonpayment of rent, you need records documenting late or missing rent payments. If eviction is for disruptive behavior, you need police reports, complaints from neighbors, and other records documenting what the resident did. In all cases, your files should document the efforts you made to investigate and resolve the problem, including written warnings you gave the resident. Last but not least, your records must show that you’ve consistently evicted other residents who committed similar infractions to dispel any suggestion of discriminatory or retaliatory motives.

Rule #6: Scrupulously Follow the Eviction Procedures

The final rule to keep in mind is that when it comes to eviction, procedure counts as much as substance. In addition to the notification requirements of the lease, most states (and HUD in the context of federally assisted housing) impose intricate procedural requirements to ensure tenants don’t lose their home without due process. The community must provide the resident with specific notices by a specific time, in a specific order, and in a specific way, such as by mail or hand-delivered directly to the resident. As many a community has learned, even the tiniest procedural error may be enough to derail an eviction case.

The other common procedural mistake communities make is going around the eviction process entirely and taking matters into their own hands. This is most apt to happen if you're so certain that eviction is justified that you change the locks. But guess what? Once you resort to “self-help,” you become the villain and the resident becomes the victim, regardless of the sins the resident committed. Your case is DOA and you won’t even get the chance to present it.

That’s why it’s critical to seek legal counsel before initiating the eviction process. In addition to ensuring that you jump through all the right hoops, attorneys will help you organize your evidence and present the strongest possible case for eviction.

TIME OUT!

Residents May Use FHA as an Eviction Stall Tactic

When residents facing eviction file a discrimination complaint with HUD or a state human rights commission, they can ask the tribunal to “stay” the eviction case—that is, put the case on ice until the discrimination ruling comes down. A ruling in the resident’s favor typically ends the eviction by giving the resident a solid legal defense in the eviction case.

Example: An owner went to court to evict a resident for keeping a dog in her apartment in violation of the lease. The resident, who suffered from kidney disease and blindness, claimed the dog was a “comfort animal” and filed a disability discrimination complaint with the New York City Commission on Human Rights. The commission then stayed the eviction suit pending determination of the complaint, noting that if the owner did commit discrimination, it couldn’t evict the resident [90-10 149th Street v. Badillo, NYLJ, March 8, 2000].

If HUD or the state agency finds no discrimination, the owner can resume the eviction case. Of course, all of this takes time. As a result, residents may file discrimination claims as a tactic to stall an eviction proceeding and/or to increase their leverage in settlement negotiations.

But owners who find themselves in this situation also have options. One of them is to oppose the stay by showing that the discrimination claim, even if true, wouldn’t be a defense against eviction.

Example: Subtenants holding over in a rent-stabilized apartment after their sublease expired claimed that the owner was refusing to offer them a lease in their own right because they were gay and asked the state court to stay the eviction case. But the court refused. Even if the subtenants’ allegations were true, it wouldn’t affect the eviction case because in New York discrimination isn’t a defense to a summary holdover proceeding where there’s “no legal basis for respondent remaining in possession.” And in this case, the subtenants didn’t have a bona fide entitlement to continue in possession after their sublease expired. Note: While they couldn’t fend off eviction, the subtenants could still collect damages against the resident if they could prove he discriminated against them [Ennismore Apartments v. Gottlieb, NYLJ, Sept. 24, 1992].