Design and Construction

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.

I had an interesting situation come up just the other day—a resident at an apartment community claimed that the community pool was violating housing discrimination laws by not being fully accessible to individuals with disabilities.  Obviously, any time a resident threatens a property with being “out of compliance with housing laws,” my heart rate jumps considerably.  However, it turns out that this situation stemmed from a common misconception regarding the separate requirements of the Fair Housing Act (FHA) and the Americans with Disabilities Act (ADA).

The question at issue was whether an apartment community pool was required to have a “pool lift.”  The particular resident was alleging that, because the complex did not have a pool lift, the property was not in compliance with the ADA.  The fact of the matter, however, is that the ADA only applies to the areas of the apartment community that are open to the general public—which is typically only a select few areas of the property.  But here, whether or not the ADA is applicable is extremely important because, to the extent that the ADA applies, your pool must have either a pool lift or a sloped entry (although, as a caveat, the rules regarding your obligations are slightly different depending on when your pool was built).  And while the Fair Housing Act Design and Construction Guidelines require that the area around the pool be accessible, there is no set requirement for access into the pool itself (only to the edge).

So how do you know whether the ADA applies to your pool?  Well, ask yourself—is the public allowed to use the pool?  Or is it restricted to the property’s residents?  To the extent that the pool is solely for the use of the residents, then it is a pretty safe bet that the ADA does not apply.  But if you allow the general public to use the pool, or if you sell pool memberships to the general public, then there is a good chance that the ADA does apply.  So how about all of the gray areas, like allowing guests at the pool, or permitting the local high school to host swim meets at the pool?  Unfortunately, like most issues with the ADA and the FHA, there is no clear rule and the safest course of action is to contact an attorney.

In my recent blog post, I discussed the often overlooked design and construction requirements of the Fair Housing Act.  In sum, if you are an owner or manager of a property “built for first occupancy” after March 13, 1991, you need to be aware that you are subject to a series of mandated accessibility requirements.   However, following that blog post, a number of people have asked the same (very good) question—what does it mean to be “built for first occupancy” after March 13, 1991?

The good news is that, as with most Fair Housing related issues, HUD has given some pretty good guidance on this question.  Broadly speaking though, it is important to bear in mind that the determination of first occupancy is made on a case by case basis.  Which means, of course, that if you own or manage a property that was built in or around 1991, you may have some buildings on the property that are covered by the Fair Housing Act Design and Construction Guidelines, and some that are not.

HUD has made clear that “covered multifamily dwellings” (see blog for a discussion of what a covered multifamily dwelling is) will be considered to be designed and constructed on or before March 13, 1991 (and exempt from the Act’s design and construction requirements) if the last building permit (or renewal) for the covered units is issued by the State, county, or local government on or before June 15, 1990.

So if you did not obtain the final building permit on or before June 15, 1990, are you out of luck?  Not necessarily.  You can also prove the date of first occupancy was on or before March 13, 1991 by: (1) a certificate of occupancy; and (2) a showing that at least one unit in the building was actually occupied by March 13, 1991.  This means that a resident has signed a lease and has taken possession of the unit.  Note that the resident does not actually have to physically move into the unit on or before March 13, 1991, but it does mean that the resident could have taken possession, if desired.   And did you catch the “and” in the proof requirements?  That means that you cannot simply rely on a certificate of occupancy alone—you need to show both the certificate of occupancy and proof of actual occupancy.

It may not be as sexy as a request for an assistance pig, or as routine as a request for grab bars, but one of the most important—and overlooked—parts of the Fair Housing Act is the design and construction guidelines.   Indeed, some of the largest settlements and penalties issued by the DOJ over the past few years have been a result of alleged violations of the Fair Housing Act Design and Construction Guidelines.  For example, in May 2013 the DOJ settled a case concerning violations of the Guidelines for a total of $925,000.  This settlement arose out the defendants’ violations of the Guidelines in the design and building of multifamily housing complexes in Louisiana, Mississippi, and Tennessee.

The Design and Construction Guidelines apply to “covered” buildings built for first occupancy after March 13, 1991.  For purposes of the Guidelines, “covered” multifamily dwellings are: 1) all units in buildings containing four or more dwelling units if such buildings have one or more elevators; and 2) all ground floor dwelling units in other buildings containing four or more units.  In other words, if you own or manage a building with four or more units that was built after March 13, 1991, all of the ground floor units in non-elevator buildings are covered, and all units in an elevator building are covered.  It should be noted, however, that to be a covered unit, all of the finished living space must be on the same floor—given this, multistory townhomes are not covered.

So what does it mean if the Design and Construction Guidelines apply to your building?  Well, stated broadly, it means that the property must meet seven requirements.  The property must have: 1) an accessible building entrance on an accessible route; 2) accessible and usable public and common use areas; 3) usable door; 4) accessible route into and through the covered dwelling unit; 5) light switches, electrical outlets, thermostats and other environmental controls in accessible locations; 6) reinforced walls for grab bars; and 7) usable kitchens and bathrooms.  Clear as mud?  Luckily HUD has issued a lengthy Fair Housing Act Design Manual that provides detailed specifications on compliance.

So what can you do?  Well, if you already own or manage the property, understand that you may be at risk for a Fair Housing Act complaint.  If you are purchasing the property—and despite the fact that there is some uncertainty over whether subsequent owners not involved in the construction of the property are liable for Design and Construction violations—I would recommend that, as part of your due diligence, you have a property evaluation report conducted that includes a Fair Housing Act Design and Construction compliance review.