A Practical Guide to Avoiding Fair Housing Litigation Let’s Avoid a Lawsuit, Shall We?

Heidi Olguin & Mona Hathout,

Progressive Management Resources, Inc.

A Compliance Consulting Firm

PMR - Who We Are • Compliance Consulting Firm • Monitor National & Local Fair Housing &

Employment Consent Decrees • Litigation stems from DOJ, CA Dept. of

Corp., CA Atty. General’s, EEOC & private cases

• Policies, Training, Testing and Investigations • Learn from our Clients’ Missteps

TOP 5 WAYS TO END UP IN A FAIR HOUSING LAWSUIT

5. Upper MGT Unfamiliar w/ Fair Housing law

4. No Fair Housing Policies in Place

3. No Staff Training

2. Not Managing Employee Behavior

1. Not Properly Responding to Complaints

Outline

• Overview of Fair Housing Law• Current Litigation • Fair Housing Policies • Handling Complaints & Managing

Employee Behavior

OVERVIEW OF FAIR HOUSING LAW

Part 1

Federal Fair Housing Laws

• Title VIII of the Civil Rights Act of 1968 (Fair Housing Act)• Title VI of the Civil Rights Act of 1964• Section 504 of the Rehabilitation Act of 1973• Section 109 of Title I of the Housing and Community

Development Act of 1974• Title II of the Americans with Disabilities Act of 1990• Architectural Barriers Act of 1968• Age Discrimination Act of 1975• Title IX of the Education Amendments Act of 1972

The Fair Housing Act Title VIII of the Civil Rights Act of 1968

What’s covered?

• Housing Transactions: sale, rental, financing, insurance, appraisals

• The Fair Housing Act (FHA) covers MOST housing!• FHA does not cover:

– owner-occupied buildings with 4 or less units,– single-family housing sold or rented w/o a broker, – housing operated by organizations/private clubs that limit

occupancy to members

• Note: Advertising Guidelines apply to all properties

The Fair Housing Act What’s Prohibited

•DISCRIMINATORY ACTIONS based on PROTECTED CLASSES

Race

Color

Religion

National Origin

Disability

Sex

Familial Status

• Refusing to rent or sell• Refusing to negotiate• Making housing unavailable• Setting different terms/conditions/

privileges • Providing different services or

facilities • Falsely denying housing is available• Blockbusting• Denying access to or membership in a

facility or service • Threatening, coercing, intimidating or

interfering with FH rights• Advertising preferences

State Fair Housing LawsMany states have their own fair housing laws. For

example, California’s “Fair Employment and Housing

Act” (FEHA) includes these protected classes:

• Race• Color • Religion• National Origin• Ancestry • Sex• Disability (including

HIV/AIDS)

• Gender Identity and Gender Expression

• Sexual Orientation• Marital Status • Familial Status • Source of Income

• Medical Condition• Genetic Information• Any arbitrary &

intentional discrimination on basis of personal characteristics similar to those listed above

Special Fair Housing Topics

Persons with Disabilities Familial Status

Sexual Harassment

Fair Housing & Individuals with Disabilities

• FHA provides additional protections to people with disabilities to ensure opportunity to fully enjoy their dwelling & common spaces: Reasonable Accommodations & Reasonable Modifications.

• How is disability defined?– Physical or mental impairment that substantially limits 1 or more

major life activities – Having a record of such a disability or – Being regarded as having such a disability

Fair Housing & Individuals with Disabilities (cont’d)

What is a Reasonable Modification?• Physical changes to premises (apartment unit, common spaces,

or parking areas)• Tenant generally responsible for paying for the modification• Can require that work be done in compliance with necessary

building codes/workmanlike manner. • Limited circumstances: landlord may require the tenant to

restore the unit to its original state when the tenant leaves

What is a Reasonable Accommodation? • Reasonable accommodations are changes to rules and policies.

Handling Requests for Reasonable Accommodations & Modifications

IMPORTANT CONCEPTS:• Case by case – each one unique• Verifying Disability and Need • Determine Reasonableness• Communicating with the Requester• Interactive Process• Documentation

• Allowing assist animals

• Reading notices to the tenant

• Assisting with application

• Allowing for reserved parking

• Allowing caregiver

• Adjusting rent due dates

• Allowing unit transfers

• Providing rent reminders

• Explaining lease/property rules

• Showing resident how to use appliances in the apartment and common use areas

• Moving monthly resident meetings to an accessible location

• Allowing extensions of time (for correcting problems or move-outs)

Examples of Reasonable Accommodations

• Widening doorways

• Allowing grab bars in the

bathroom

• Allowing a ramp to be built

• Removing protruding objects

from outside pathways

• Wrapping the underneath sides

of pipes in the kitchen and

bathroom with insulation

• Extra lighting outside next to the

front door

• Visual alarm system on smoke

detectors

• Making outside door lock or

security locks simpler

• Providing non-slip, color

contrasting strip to outside stairs

• A door bell flasher

Examples of Reasonable Modifications

Denying a RA/RM Request• Basis for Denial

– No Disability– Undue financial or administrative burden– Alters the nature of your business– Direct Threat

• How should you deny? – Carefully!!• Interactive Process

Fair Housing & Accessibility Standards

• FHA: Properties built after March 1991– 7 Accessibility Standards

• Title III of ADA -- Places of public accommodations (front office, public parking) must be built in compliance with “ADAAG” (Accessibility Guidelines)– Properties built before January 1993

-removal/minimization of barriers (technically feasible and readily achievable)

Fair Housing & Familial Status

•Having in the household anyone that is:–Under 18 living with a parent or legal custodian–Pregnant–Securing legal custody of someone under 18  

Fair Housing & Familial Status

Common Problems/Mistakes• ‘No Children’ Policy (formal or informal)• Segregating families (buildings, sections, floors)• Demanding children of opposite sex have

separate bedrooms• Refusing to rent based on risks/dangers (lead

paint, steep steps, located near train tracks)• Inquiring about pregnancy, childcare

arrangements, or # of children• Charging extra for children (per person charges)

Fair Housing & Sexual Harassment

• Sexual Harassment is PROHIBITED– Unwelcome sexual advances or targeting a

group/individuals based on gender

• Two forms of Sexual Harassment: – “quid pro quo” and – “hostile environment”

• Duty to Act

LIABILITY & CURRENT LITIGATION

Part 2

Current FH Litigation at DOJ – Cases based on Race

• 2/4/14:US v. Wallschlaeger (S.D. Ill.), Race & Familial Status• 1/8/14: US v. Stonebridge (N.D. Tex), Race & National Origin • 1/12/13: US v. 61 Main Street Corp. (S.D.N.Y), Race & Color • 9/30/13: US v. Housing Authority of the City of Ruston (W.D.

La), Racial Discrimination in placement of new residents• 9/30/13: US v. S-2 Properties, Inc.(W D. Pa.), Race • 9/30/13: US v. Wilson (W.D. Ky.), Race and Familial Status • 8/15/13: US v. Highland Management Group, Inc. (D. Minn.),

Race and National Origin • 8/1/13: US v. Hylton (D. Conn), Race

Current FH Litigation at DOJ – Familial Status

• 1/30/13: US v. Edwards (D. N.H.), Familial Status (prohibited kids)

• 11/25/13: US v. Greenbrier Village HOA (D. Minn.), Familial Status (rules)

• 11/4/13: US v. Bachmaga (E.D. Wis), Race and Familial Status• 10/25/13: US v. Woodland Garden Apts, Familial Status (engaged

in pattern or practice of discrimination against families w/ children

• 9/30/13: US v. Zaremba Mgt Co. (N.D. Ohio), Familial Status• 8/15/13: US v. Townhomes of Kings Lake HOA, Inc. (M.D. Fla.),

Familial Status (Occupancy Limits)• 5/10/13: US v. Clarendon Hill Somerville (D. Mass.), Familial

Status (Denial)• 4/17/13: US v. Magee (S.D. Miss.), Familial Status (Occupancy

Limits)

Current FH Litigation at DOJ - Disability

• 1/8/14: US v. Allegro Apts. (E.D. Wis.) (Refusal due to Assistance dog)

• 1/13/14: US v. East River Housing Corp. (S.D.N.Y.)• 12/12/13: DeFiore v. City Rescue Mission (W.D. Pa)

(Refusal in shelter due to Assistance Dog)• 11/12/13: US v. LCW Family Ltd. Partnership (D. Neb.)

(Refusal of an Assistance animal) • 11/18/13: US v. Trinity Villas, Inc. (M.D. Fla.) Disability

(Refusal of Reasonable Accommodation transfer)

• 11/18/13: US v. Wren (N.D. Ill.) Disability and Familial Status

Disability Cases at DOJ - cont’d

• 11/15/13: US v. Schimnich (D. Minn.) (Denial/Assist animal)• 11/14/13: US v. The Whitacres (N.D. W.Va.) (Eviction based

on Assistance Animal)• 10/30/14: US v. Gulf Shores Apts (S.D. Ala.) Disability and

Gender• 10/28/13: US v. Rosewood Park Apartments (D. Nev.)

(Denial based on Assistance Animal) • 7/ 1/13: US v. Barber (W.D. Wash.) (Not waiving "pet

deposit" for assistance animal)• 4/19/14: US v. Univ. of Nebraska (D. Neb.) (Denying

Assistance Animal in Student Housing) • 3/27/13: US v. Croom (D. N.M.) – RA refusal $200,000

Current FH Litigation at DOJ –Gender / Sexual Harassment

• 10/3/13: US v. Toone (E.D. Tex.) – Gender Discrimination

• 9/30/13: US v. VanderVennen (W.D. Mich.) – Sexual Harassment

• 4/19/13: US v. Ferrante (D. Me.) – Sexual Harassment

• 9/13/12: Hawecker and US v. Sorensen (E.D. Cal.)– Sexual Harassment

A FEW CASES IN DEPTH

FH Issue that ALMOST went the Supreme Court: DISPARATE TREATMENT

Township of Mount Holly v. Mount Holly Garden Citizens in Action, Inc.

• Issue: Can disparate impact claims be brought under the Fair Housing Act?

• Facts: Township wanted to demolish a housing community primarily comprised of mainly African-American and Latino low income residents and rebuild more expensive housing.

• 11 of 12 Federal Circuit Appeal Courts have held that the FHA allows Disparate Impact suits, but Supreme Court has never issued a finding on disparate impact in FH.

Landmark Disability Case

• June 25, 2012 -- Justice Department Obtains Landmark $10.5 Million Settlement to Resolve Disability-Based Housing Discrimination Lawsuit

• Allegations: JPI Construction discriminated on the basis of disability in the design and construction of multifamily housing complexes throughout U.S.

• DOJ investigated and found accessibility barriers at various JPI properties. Since 1991, JPI and its affiliates built 210 multifamily properties in 26 states and the District of Columbia; trial involving 32 of JPI’s properties was scheduled to begin July 9, 2012.

Largest Individual FH Disability Settlement by DOJ

• 12/27/10 – DOJ obtained $1.25 million settlement with Warren Properties Inc., to settle allegations that defendants violated Fair Housing Act by refusing to grant a tenant’s requests for a reasonable accommodation.

• Allegation: failing to permit a tenant with mobility impairment to move to a ground-floor apartment in a 196-unit apartment complex; resident subsequently fell down the stairs and sustained further injury.

Occupancy Policies Lead to Discrimination Charges

• 4/24/13: United States v. Magee (S.D. Miss.)– Allegations of discrimination against families with children

by refusing to rent a 3-bdrm home to woman w/ 4 four children -- “too many children” under community’s occupancy policy (set lower maximum number of children than adults who could reside in each home).

• 8/15/13: United States v. Townhomes of Kings Lake HOA, Inc. (M.D. Fla.)– Allegations of discrimination against families with children by

maintaining and enforcing an unlawful occupancy limit policy by threatening to evict a family w/ 6 kids from a 4-bdrm apt.

Other Fair Housing Cases of Note• 9/13/12: Hawecker and United States v. Sorensen (E.D. Cal.).

– Allegation: defendant sexually harassed female tenants Consent decree: judgment of $2,075,000 in monetary damages. Largest monetary settlement in a sexual harassment suit brought by the US DOJ under the Fair Housing Act.

• 1/8/14: United States v. Stonebridge (N.D. Tex)– Allegation: persons of Middle Eastern and South Asian descent

were denied and those not denied were segregated into designated buildings. Consent decree requires over $300,000 in damages and penalties, staff training, adoption of fair housing policies, and termination of the apartment manager.

DOJ Cases Based on Testing• 8/15/13: Consent Decree in U.S. v. Highland Management

Group, Inc. (D. Minn.), alleging discrimination against Somalis. Evidence developed by DOJ’s Fair Housing Testing Program.

• 9/30/13: DOJ filed a complaint against S-2 Properties, Inc.(W D. Pa.), alleging discrimination based on race. Evidence developed by DOJ’s Fair Housing Testing Program.

• 2/4/14: DOJ filed a complaint in U.S. v. Wallschlaeger (S.D. Ill.), alleging discrimination based on race and familial status. Evidence developed by DOJ’s Fair Housing Testing Program.

Fair Housing and VAWAFirst HUD Settlement to address rights of domestic violence

survivors

• What is VAWA? The Violence Against Women Act of 2013 (reauthorized from 2005)– protects individuals in federally subsidized housing from

discrimination because of status as survivors of domestic violence, dating violence, sexual assault or stalking.

• Allegation: Woman denied apartment because she refused to provide her children’s Social Security numbers (feared revealing their location).

• Under settlement, management company agreed to adopt VAWA housing protections, pay monetary damages and attorneys’ fees.

Fair Housing and Caregivers

January 29, 2014: Missouri Community Settles Disability Discrimination Charge

• Disabled resident requested live-in caregiver

• Management refused -- Policy of 6 month waiting period before adding anyone to lease

• Resident had no choice but to move

And last but not least, we can’t forget about Donald Sterling!

AVOID A LAWSUIT:DEVELOP FH POLICIES

Part 3

Why You need FH Policieswhy does it matter?

• To Inform Employees & Set Expectations• To Treat Applicants/Residents Consistently

• To Reduce Liability

Important FH Policies

1. General FH Non-Discrimination Policy

2. Reasonable Accommodations Policy

3. Occupancy Standards Policy

4. Rental Screening Policy

Policy 1:FH Non-Discrimination Policy

• Clear and Concise Language – Brief• Reflective of all Relevant Laws• Includes Complaint Process• Print in Large Format• Circulate to All (resident and employees)• Post Prominently• TRAIN

Sample Fair Housing Policy

Important Elements:• Laws • Protected

Classes • Prohibited

Actions• Complaint

Process

Policy 2:Reasonable Accommodations Policy

• Clear Statement regarding Compliance• Define RA/RM• Process for Requesting • Process for Review

– always case-by-case

• Information about Denial– INTERACTIVE Process – very important

Sample RA/RM Policy

Find sample and policy on NAA website handouts

Sample RA/RM Policy (cont’d)

Sample Manager Guidelines for Handling RA/RM Requests

Important Guidelines:1.) Handling Request2.) Verifying disability/need3.) Reviewing the request4.) Communicating 5.) Documentation6.) Service Animals

Sample Manager Guidelines for Handling RA/RM Requests (cont’d)

Sample RA/RM Request Form & Reply Letters

Sample FormsCheck Website for MORE

Policy 3:Occupancy Standards Policies

2 per bedroom generally reasonable but may, in certain circumstances, illegally discriminate against families with children. HUD will consider:• Size of bedrooms and unit• Age of the children• Unit configuration• Other physical limitations of property• State and local law Policy

Checklist

Policy 4:Rental Screening Policy

Based on objective criteria & transparent process -- should include:

• A non-discrimination statement, even if you have a separate non-discrimination policy

• Statement regarding how vacant units are offered e.g. first-come, first-served

• Clear and easy-to-understand language about qualification standards

Policy 4:Rental Screening Policy (cont’d)

• Clear statement of fees• How will applicants be notified (both approved &

denied)? • Are deposits required w/in a certain time frame? What if

not timely received?• Do you allow co-signers? What are their qualification

requirements?• Do you have a written waiting list policy?

Sample Rental Screening Policy

Sample Rental Screening Policy (cont’d)

AVOIDING A LAWSUIT:HANDLING COMPLAINTS & MANAGING EMPLOYEE BEHAVIOR

Part 4

Handling Complaints

• Ensure you have complaint process– Consider discipline for employees that lose or “forget”

complaints

• Respond to all complaints in a timely manner

• Investigate complaints thoroughly• Never ignore - take action • Document, Document, Document

Managing Employee Behavior

• Training• Performance Evaluation• Self-Testing

Managing Employee Behavior• Training

– Law/Policies/Expectations - CRUCIAL– Should be in-person/not online– Multilingual (employees may be shy to ask)– Keep it brief and frequent– Be sure upper management can conduct it

• Sends right message & increases buy-in at all levels

Managing Employee Behavior

• Performance Evaluation– Accountability

• if employees know it’s part of what they’re evaluated on, they’ll take it more seriously

– Document & Discipline to reduce liability

Managing Employee Behavior• Self –Testing

– Why?• Others may be testing you – find out FIRST & fix

potential problems • Determine training effectiveness• EXCELLENT training tool

– How?• Phone or in-person• Single/matched • Internal role-play or outside contractor

WRAP UPPart 5

Avoiding a Lawsuit

• Have & enforce good policies• Staff training (laws & policies) • Respond to & investigate all complaints• Actively manage employee behavior• Stay involved and take action

Heidi Olguin & Mona Hathout

Progressive Management Resources, Inc.

info@progressmgt.com