Takeaway Lessons from Recent Court Rulings on Fair Housing Law

In this month’s lesson, the Coach reviews recent court rulings on fair housing law. In each case, we review the events leading up to the dispute and how it landed in court. Then, we explain the legal issues involved and what the court decided and why. Finally, we highlight the takeaway lessons that you can use to avoid similar fair housing problems at your community. At the end, you can take the Coach’s Quiz to see how much you’ve learned.

DISCRIMINATORY STATEMENTS

Casual Question Leads to Fair Housing Liability

A Massachusetts real estate broker violated fair housing law when he casually asked a prospect about her national origin, according to a recent court ruling.

WHAT HAPPENED: The incident occurred during a meeting with a married couple when the broker—whose wife was Brazilian—asked the woman, “Gladys, where are you from?” She answered that she was from Venezuela.

     It’s unclear whether she showed it at the time, but the woman had a strong emotional reaction to the question. Unbeknownst to the broker, another realty company had just allegedly denied the couple a unit due to her national origin. Worrying that it was happening again, the woman said she suffered extreme anxiety and sleepless nights—which continued for years—even though they rented a unit a month later.

     The couple filed a complaint with the Boston Fair Housing Commission, which ordered the broker to pay more than $60,000 in damages, penalties, and attorney’s fees. In awarding damages for emotional distress, the commission ruled that the broker’s inquiry contributed to the wife’s “stress, fear, and anxiety,” during two periods of time: for the month right after the question until they rented a unit, and for the year they lived there until they moved again.

     The broker appealed.

DECISION: In February 2014, the state’s high court upheld the decision, but reduced the amount of damages.

REASONING: The broker violated fair housing law by asking about the prospect’s national origin. Even though his question had no discriminatory intent and didn’t result in discrimination against the couple, his inquiry itself was a violation of fair housing law.

     The only dispute was the amount of damages the broker was ordered to pay. He argued that she wasn’t entitled to any damages for emotional distress, but the commission said that her reaction was reasonable because his question came right after she allegedly experienced discrimination by the other realty company and she was therefore “especially sensitive” to the issue of her national origin.

     The broker had to pay for emotional distress during the first period (the month after his question until they secured a unit), but not for the second period (the year they lived there until moving again). The evidence didn’t show that his single inquiry, made months previously, significantly contributed to her continued anxiety. The court also cut the amount of penalties and attorney’s fees he had to pay.

• Linder v. Boston Fair Housing Commission, February 2014

TAKEAWAY: Small talk can get you into big trouble, so watch what you say in casual conversation with prospective residents. You may think it’s an innocent question, but you could inadvertently violate fair housing law if you step over the line by asking questions or making comments related to national origin and other characteristics protected under fair housing law.

SOURCE OF INCOME

Does Landlord’s Refusal to Use Section 8 Lease Addendum Discriminate Against Recipient of Public Assistance?

No, according to Maine’s highest court, which recently ruled that a community’s refusal to use the required HUD addendum for Section 8 housing in its leases doesn’t violate state fair housing law.

WHAT HAPPENED: The case involves the mother of three, who became homeless after the foreclosure of her home. A local housing authority issued her a voucher under the federal government’s Section 8 Housing Choice Voucher program. Under the program, the housing authority pays a portion of the rent directly to the landlord, and the resident pays the remainder—usually 30 percent of her income. Federal law explicitly makes landlords’ participation in the voucher program voluntary.

     Through Craigslist, the mother found a listing for a three-bedroom unit with an advertised rent within the voucher program limits. When she called, she was told that the community didn’t accept vouchers. She called again, but this time she didn’t say anything about the voucher. After seeing the unit, she submitted an application on which she disclosed the voucher.

     She qualified for the unit and was accepted, but problems arose when the housing authority sent the paperwork—including the HUD-required tenant addendum—to the community. By letter, its attorney responded that the community didn’t want to include the HUD addendum in its lease because its terms were more restrictive rights than its standard lease. The attorney stressed that the community’s problem was with the addendum—not the mother—and offered to rent her the unit without including the addendum.

     The housing authority said the community couldn’t rent to her without including the addendum, and the mother couldn’t afford the unit without the voucher. Unable to find another unit in the area, she had to move to another city.

     The mother filed a complaint with the Maine Human Rights Commission, arguing that the community’s policy of refusing to use the HUD addendum violated state law, which bans discrimination based on status as a public assistance recipient. The commission agreed, finding reasonable grounds that the community discriminated against the mother because of her public assistance status.

     The mother sued the community, but the court ruled against her. The mother appealed.

DECISION: In January 2014, the state’s highest court ruled that the community didn’t discriminate against the mother because of her public assistance status.

REASONING: Maine’s fair housing law offers broad protection against discrimination based on race, color, sex, sexual orientation, physical or mental disability, religion, ancestry, national origin, or familial status. In contrast, the law provides only limited protection to recipients of public assistance, because it includes an exception due to business necessity. The law prohibits landlords from refusing to rent to anyone who is a recipient of federal, state, or local public assistance—including housing subsidies—primarily because of the individual’s status as a recipient, unless the community can prove a business necessity that justifies the refusal.

     The court said that the community didn’t refuse to rent to the mother; it offered her a unit and was willing to rent to her after learning her status—so long as it could do so without including the HUD tenancy addendum. In essence, the community offered to rent to her on the same terms of tenancy offered to any other individual. A landlord doesn’t violate state fair housing law by offering units to recipients of public assistance on the same terms as it offers apartments to other potential tenants.

     The court recognized the law’s purpose to protect public assistance recipients’ rights to secure decent housing, but it wouldn’t read into the law a requirement that landlords accept terms of tenancy that are otherwise required only if the landlord chooses to participate in a voluntary federal program.

     State law doesn’t require landlords to accept Section 8 vouchers. Although state lawmakers have considered a bill that would effectively require landlords to participate in the voucher program, it has not, to date, made this voluntary program mandatory in Maine.

• Dussault v. RRE Coach Lantern Holdings, LLC, January 2014

TAKEAWAY: Get details about applicable state and local fair housing laws. Currently, 12 states, the District of Columbia, and many local jurisdictions prohibit discrimination based on lawful source of income—that is, discrimination based on how applicants or residents get their financial support. Many, but not all, also cover housing subsidies, such as Section 8 housing vouchers.

COACH’S Tip: For more information about state fair housing laws, see the Coach’s January 2014 lesson, “What You Should Know About State and Local Fair Housing Laws.”

EVICTION

Community Fights Off Discrimination Claim to Evict Resident for Lease Violations

A Kansas community recently won its court battle in a fair housing case that delayed efforts to evict a resident for violating her lease.

WHAT HAPPENED: In early 2012, the resident rented a unit at the community, but management soon suspected that her adult daughter was living with her. The manager sent her a written warning that she was violating her lease, which prohibited unauthorized guests from living there, and later followed up with a notice that she had 14 days to comply or face eviction.

     A week later, the resident sued the community in federal court for discrimination, claiming that the manager made racial comments about her boyfriend, who was African American, and used race as a factor in refusing to add him to the lease. She also accused the community of telling her and her daughter, who were Hispanic, that there were no two-bedroom units available, but renting a two-bedroom unit to two white tenants. She requested $100 million in damages.

     Eventually, the community rented a two-bedroom unit to the resident and her daughter, but later initiated eviction proceedings based on the belief that she let her boyfriend live there too.

     The state court agreed with the landlord and ordered their eviction, but the community agreed to hold off until the federal court ruled on the separate discrimination case. After the federal court sided with the landlord, the resident, the daughter, and the boyfriend appealed.

DECISION: In February 2014, the court dismissed the fair housing case.

REASONING: The court found that there was no evidence of race discrimination against the resident, her daughter, or her boyfriend. Moreover, the resident acknowledged that the boyfriend had been living with her, so she admittedly violated the lease terms.

• Barrera v. Mid America Management, February 2014

TAKEAWAY: Be prepared to address potential fair housing trouble anytime you take steps to end a resident’s tenancy via nonrenewal or eviction. Make sure that you have documentation at the ready to show that you have legitimate nondiscriminatory reasons for evicting the resident—and that you’ve evicted other residents under similar circumstances.

COACH’s Tip: For more information on evictions, see the Coach’s April 2014 lesson, “Avoiding Fair Housing Problems During Evictions and Nonrenewals.”

COMMUNITY RULES

Which Is Worse: Rule Requiring Adult Supervision or Rule Against Playing?

The short answer: adult supervision, according to a recent court ruling in an ongoing case involving a California community’s house rules.

WHAT HAPPENED: According to the complaint, the resident received a copy of the community’s house rules when she moved in with her minor child in 2006. Allegedly, one rule stated that all kids must be supervised by an adult who will be responsible for any damage they cause to the building, such as destroying the plants (Adult Supervision Rule). Another rule allegedly stated, “No playing with balls, bicycles, roller blades, and other toys on the property” (No Playing Rule).

     The mother alleged discrimination based on five separate incidents between 2006 and 2013, all involving her son playing outside until he was told not to do so. In the last incident, she said that her son was in a common area talking to a 5-year-old neighbor who had a ball in his hands. Allegedly, the manager saw them, asked them where their parents were, said they couldn’t be outside playing, and made them go back inside.

     The mother sued the community, alleging discrimination based on familial status under federal and state fair housing law.

     The community asked the court to dismiss the case.

DECISION: In February 2014, the court dismissed the mother’s discrimination claims based on the No Playing Rule, but allowed further proceedings on her claims involving the Adult Supervision Rule.

REASONING: The mother unsuccessfully argued that the No Playing Rule had a discriminatory effect on families with children because children routinely play with balls, bicycles, and other toys in the common areas of any rental community.

     The court disagreed, ruling that her complaint merely showed that the community enforced a neutral policy that applied to all residents, regardless of age. The resident cited five incidents in which her son was told to stop playing outside, but there was no evidence to show that children were more likely than adults to play ball, ride bicycles, or Rollerblade at the community.

     Nevertheless, the mother could pursue her discrimination claim involving the Adult Supervision Rule. The community argued that the rule wasn’t discriminatory, but simply expressed the common sense notion that parents were responsible for supervising their children. But the mother argued that the rule was discriminatory because it treated children—and therefore, families with children—differently and less favorably than adults-only households.

     In general, courts frown on rules requiring adult supervision of all children (up to age 18) because they aren’t the least restrictive means to accomplish the purpose of the rules. In contrast, rules requiring adult supervision of very young children during specific activities, such as swimming or bicycle riding, have been found to be justified.

     Here, the complaint alleged that the community enforced a rule requiring adult supervision of all children when using any community facility—the type of rule that courts have found overly broad. And there was one incident of alleged discrimination, when the manager allegedly sent the mother’s son and 5-year-old neighbor back inside. That was enough to justify further proceedings on her discrimination claim.

• Dumas v. Sunview Properties, February 2014

TAKEAWAY: It’s okay to enforce reasonable rules, especially in common areas, where the community has a legitimate interest in maintaining the property, ensuring safety, and protecting the right of all residents to peaceful enjoyment of their homes. Just make sure that the rules don’t unfairly target families with children—or anyone else protected under fair housing law.

RENTAL PRACTICES

Manager Accused of Misrepresenting Available Units to African-American Prospects

A court recently refused to dismiss a discrimination case filed by the Justice Department based on the results of fair housing testing at a Pennsylvania community.

WHAT HAPPENED: According to the complaint, the Justice Department conducted fair housing testing at the 100-unit community for three months in early 2013. In the first series of tests, the department said it sent three testers—two white and one African-American—in two days. Allegedly, the manager told a white male tester who contacted the community by phone that a two-bedroom unit was available to rent. But the next day, he allegedly told a black male tester looking for a two-bedroom unit that the community was “fully occupied” and that he had to be put on a waiting list for a call back. A few hours later, according to the complaint, the manager told a white male tester that a two-bedroom unit was available and that he should “snag” it.

     Based on similar results in the second and third series of tests, the department sued the owner and manager for race discrimination. The complaint alleged that the community violated fair housing law by refusing to negotiate for the rental of housing and misrepresenting the availability of housing because of race.

     The community asked the court to dismiss the case, arguing that there was insufficient evidence to show that anyone had been denied a rental based on his race.

DECISION: In January 2014, the court rejected the community’s request to dismiss the case.

REASONING: The community argued that it was impossible to know a person’s race on the phone, but the court said that it’s too early in the proceedings to decide that issue. At this point, the complaint included enough details about the testing and how it allegedly demonstrated that the community violated fair housing law.

• U.S. v. S-2 Properties, Inc., January 2014

TAKEAWAY: Keep in mind that public officials and private advocacy groups are actively investigating rental communities for signs of subtle discrimination. Though blatant acts of discrimination are on the decline, more subtle forms of discrimination stubbornly persist, according to HUD’s latest round of nationwide testing. A recent survey found that rental housing providers recommended and showed fewer units to minority families, thereby increasing their costs and restricting their housing options.

REASONABLE ACCOMMODATIONS

Resident Sues to Keep Personal A/C, Washer/Dryer

A Florida community didn’t violate fair housing law by refusing a resident’s request to keep personal appliances in his unit, according to a recent court ruling.

WHAT HAPPENED: The resident lived in a high-rise building catering to low-income residents, many of whom were disabled, elderly, or both. After the building was sold in 2009, the new owners began a multimillion dollar renovation. As part of the renovation, residents were informed that they could no longer operate large personal appliances in their units.

     The resident was one of those affected by the new rule because he had an air conditioner, a washing machine, and a dryer in his unit. He asked for permission to keep his appliances as a reasonable accommodation for his disabilities. Under the Fair Housing Act (FHA), it’s unlawful to refuse to make reasonable accommodations in rules, policies, practices, or services, when such accommodations may be necessary to afford individuals with disabilities an equal opportunity to use and enjoy a dwelling, including a unit and common areas.

     The community denied the resident’s request, so he filed a complaint with HUD. Three months later, the community moved him to a different unit while it renovated his unit, and moved him back when it was done.

     The resident sued the community for violating federal and state fair housing law. He claimed that the community unlawfully denied his requests for reasonable accommodations to keep his personal appliances. He also accused the community of retaliating against him by moving him out of his unit because he filed the HUD complaint. The anti-retaliation provisions of the FHA make it unlawful to coerce, intimidate, threaten, or interfere with anyone because he exercised his rights under fair housing law.

     After a series of proceedings, the court granted the community’s request for judgment in its favor without a trial. The resident appealed.

DECISION: In March 2014, the appeals court upheld the lower court’s ruling that the community wasn’t liable for discrimination or retaliation under fair housing law.

REASONING: The community didn’t violate fair housing law by denying the resident’s request to keep his personal appliances. In connection with his request, the community hired an architectural expert to explore the feasibility of accommodating personal appliances in the building. The expert stated that the electrical panels servicing the building were already operating at near-maximum capacity and couldn’t accept the additional load of an air conditioner or washer and dryer. The expert stated that upgrading the electrical panels to increase their capacity would be prohibitively expensive.

     The resident offered no proof to dispute the expert’s opinion. He argued only that the former owners had allowed personal appliances, but the court said that the previous owners may not have known that the electrical panels were near full capacity. And since the ban on large appliances came only after the building underwent major renovation, including an overhaul of its central air system, the old policies may no longer have been feasible.

     The resident also failed to prove that the community retaliated against him on account of the HUD complaint. More than three months elapsed from the time he filed the complaint and when the community moved him out of his unit. Without any other evidence of a retaliatory motive, the three-month delay between his complaint and the alleged adverse action was too long to prove that they were related.

• Fisher v. SP One, Ltd., March 2014

TAKEAWAY: Carefully review requests for disability-related exceptions to your policies, rules, or services. Among other things, evaluate whether the request is reasonable—that is, does not impose undue financial and administrative burdens on the community. The law requires communities to consider requests for exceptions to their policies to accommodate residents’ disabilities, but it doesn’t require them to grant unreasonable requests.

ASSISTANCE ANIMALS

Community Embroiled in Litigation Over Enforcement of No-Pet Policy

A case involving a condo community in the Virgin Islands is among the latest in a wave of litigation over no-pet policies.

WHAT HAPPENED: Despite community rules prohibiting residents from keeping pets in their units, two residents independently acquired dogs and began keeping them in their units. In 2009, the community notified each resident that pets were prohibited and threatened to impose fines if they didn’t remove their dogs.

     One resident responded that she had adopted the dog and that they needed each other. She asked the condo board to change the pet rule, but the board voted it down. After imposing fines, the community sued the resident to prevent her from keeping the dog in her unit.

     Months later, the resident’s attorney sent a letter formally requesting a reasonable accommodation to allow her to keep the dog due to a mental disability. The community rejected the request, eventually leading her to sue the community for violating fair housing law.

     The second resident didn’t respond to the community’s initial notice about her dog. When the community fined her for violating the no-pet rule, she said the dog was a necessary companion. The community sued to prevent her from keeping the dog in the unit, but she responded that her dog was a service animal and asked what documentation was needed to keep her dog. She also sued the community for fair housing violations.

     After a series of proceedings, the residents asked the court for judgment without a trial to hold the community liable for refusing their disability-related requests for reasonable accommodations to keep the dogs.

DECISION: In December 2013, the court rejected the residents’ request to hold the community liable for fair housing violations.

REASONING: The court said further proceedings were needed to determine the residents’ disability-related need for the animals.

     Although both residents claimed disabilities, the community disputed whether they qualified as individuals with disabilities under fair housing law. The law defines disability as a physical or mental impairment that substantially limited one or more major life activities.

     The first resident claimed that she suffered from depression and alcoholism, which interfered with her ability to interact with others, live independently, and sleep. But the community countered with a psychiatric evaluation by its expert, who said that she didn’t have a psychiatric impairment and that she could engage in major life activities. Further proceedings were needed to resolve conflicting evidence about whether she was disabled within the meaning of fair housing law.

     The same was true of the second resident. She claimed that she was diagnosed with post-traumatic stress disorder (PTSD) after witnessing the 2009 shooting death of her friend, and was advised by medical professionals that it was necessary to keep the dog for emotional support. But the community’s expert said that her PTSD was in remission and that she wasn’t disabled or unable to carry out major life activities.

• Bedell v. Long Reef Condominium Homeowners Association, December 2013

TAKEAWAY: Like many communities, you may have a policy banning pets or restricting the size, weight, or breed of animals allowed at the community. It’s okay to have these rules, as long as you understand that they don’t apply to assistance animals needed by individuals with disabilities. Disputes over assistance animals often land in court, so it’s a good idea to get legal advice before taking action against residents who claim a disability-related need to keep an assistance animal.

COACH’s Tip: For more information, see the Coach’s March 2013 lesson, “How to Handle Requests for Assistance Animals.”

Also, consider taking another look at the March 2014 Coach, “Top 10 Things You Should Know About Fair Housing Law." Many of the cases covered in this lesson are real-life examples of the rules covered in that one. The first case, for example, illustrates what can happen if you forget to apply March’s Rule #4: “Watch Your Words.”

• Fair Housing Act: 42 USC §3601 et seq.