In keeping with a recent blog post, and in order to emphasize the importance of taking the Fair Housing Amendments Act (FHAA) seriously, I wanted to introduce a relatively recent HUD charge levied against a property in Denver to illustrate and substantiate HUD’s active concern with FHAA compliance issues.  A Denver, Colorado property was charged this past month with failing to make its property handicap accessible.  Specifically, the property was accused of large portions of its property being inaccessible to individuals with disabilities.

There are two aspects of this charge that can easily be overlooked, but I believe are crucial for property managers to be aware of.  First, let’s talk about the use of testers.  These testers, sent by HUD to investigate potential Fair Housing issues, don’t come with flashing signs or official “tester” uniforms.  Instead, they appear to be your average prospects- unassuming and unsuspicious.  It’s like an episode of undercover boss, but minus the cameras.  This means, therefore, that properties must practice constant vigilance and treat every prospective resident seriously (as someone who could turn around and file a Fair Housing complaint with HUD).  But you are doing that already, right?  It is impossible to quantify or calculate the risk that comes from taking encounters with prospects and residents lightly.

The second, easy-to-miss concern this charge highlights is found in the parties who were named in the suit.  The couple who raised this complaint named the owners, architects, and builders all in the suit. Most importantly, however, even the current owner, who was not involved in the design or the construction of the property, was named in the suit. Even though the current owner and property manager may not have been guilty of the initial design flaw, there is a potential to be held liable for correcting those defects.

So what’s the bottom line?  Property managers and owners need to avoid becoming complacent in their interactions with prospects and residents alike.  My advice is to adopt principles centered on accessibility and practice them consistently, to the point that it becomes sheer muscle memory.  When you make accessibility a habit, the likelihood of facing a Fair Housing complaint is diminished.  Similarly, present owners and property managers need to be proactive when acquiring a property.  Go ahead and look for potential design and construction issues as part of your due diligence, or correct them as you became aware of them.  While the up-front cost may seem daunting, I can guarantee it won’t be nearly as daunting as being slapped with a charge that could result in actual and punitive damages, injunctive or other equitable relief, as well as attorney’s fees for the opposing party.

The Fair Housing Act (FHA) allows a plaintiff to attack a housing policy that discriminates based on familial status.  Specifically, the FHA prohibits landlords from discriminating against families with children under 18 years old.  For instance, landlords are prohibited from locating families with children to a certain area within the apartment complex, limiting families such as these from accessing recreational services available to other tenants, etc.  And during 2016, the U.S. Department of Justice (DOJ) made it very clear that discrimination of this type will not be tolerated.

For example, the DOJ entered consent orders in 2 cases where this type of discrimination occurred that resulted in each property owner having to pay over $30,000 to remedy the matters.  In one case, a property owner in Nevada used advertisements that conveyed the message that the apartment complex preferred families without children, and then subsequently denied housing to a family with children that responded to one of the advertisements.  This property owner was required to pay $24,000 to the victims for damages resulting from the discrimination, and $12,000 to the United States as a civil penalty.  In another case, a property owner in Pennsylvania refused to rent one and two bedroom units to a family with children.  As it turns out, this family was a DOJ fair housing tester, as we have written about before (We’re Going To Be Tested On This?!).  This resulted in the DOJ ruling that the property owner discriminated against this family, and the owner was forced to pay $20,000 to the victims as damages and $10,000 to the United States as a civil penalty.

These cases further stress the importance of the leasing office staff members being knowledgeable of housing discrimination law.  Property owners and managers must encourage their staff members to be welcoming to all, as we want to avoid situations where comments from a staff member may be perceived as discriminatory to families with children. Even if the staff member has the best intentions for these types of families in mind – such as advising families with children to live in units away from a busy street – these decisions should be left to the families to decide.  Additionally, be mindful that fair housing testers are on the prowl searching for property owners and managers to bring FHA claims against.

The Increasing Prevalence of Testing Under The Fair Housing Act

As landlords and management companies, I understand that you want to treat people fairly, and that you strive to stay within the confines of the Fair Housing Act.  Unfortunately, I have seen many well-intentioned owners and management companies caught off-guard by a housing discrimination claim filed as a result of “testing” that was done at the property.

While many owners and landlord companies may feel like they have been the victim of a “sting operation,” testing is a perfectly lawful (and efficient) means by which local fair housing advocacy organizations test properties to see if discrimination is occurring.  Advocacy organizations will send in two or more “comparable” testers—one or more of which is a member of a protected class under the FHA, and the remaining testers which are not—to inquire about renting similar units at a property.   “Comparable” in this regard means that the testers inform the property that they share the same background, employment, rental, and educational background.  In other words, everything should be the same about the testers except for their status as protected class-members—meaning that the testers should receive the exact same treatment and information about available units at the property.   If, as a result of the testing, the fair housing advocacy group finds that discrimination has occurred, then they (or the individual testers) will bring a housing discrimination claim against the property.

So is testing lawful?  In a word, yes.  The United States Supreme Court sanctioned these types of testing practices over twenty years ago.  So how do you avoid a tester-based housing discrimination claim?  The key is to have strong policies and procedures in place in ensure that all similar prospects are treated equally, and to instill those policies and procedures in employees through training.  In addition, it is essential to maintain records of all interactions with prospects, and to document the reasons for any deviations from standard procedure (e.g., if a leasing agent shows a prospect a unit that is not on the standard tour because of a maintenance issue, the reason for the deviation should be documented and kept on file).  Keeping proper records of leasing availability, prospect interaction, and deviations from policy may prove invaluable in the event that you find yourself defending against a discrimination claim from a fair housing advocacy group or tester!