Today most, if not all, landlords are aware of the Federal Fair Housing Act with regard to making various types of discrimination illegal when it comes to housing and, even if they don’t have a thorough understanding of all of the nuances of the act, at least have a basic understanding of it. However, today, a lack of a thorough understanding of the law, as well as the risks associated with violating it, or even being accused of violating it, can be quite costly to a landlord. Therefore, if you are considering becoming a landlord, or perhaps are already in the midst of building your real estate empire, spending time studying and understanding the Federal Fair Housing Act and how it applies to you would be time well spent and it would also be a great move to align yourself with a real estate professional with a good understanding of it that can help you navigate the regulatory waters a landlord must navigate today.
The Case of HUD vs Pebble Beach Apartments –
In July 2013 there was a fair housing violation complaint filed against the owner and manager of the Pebble Beach Apartments alleging they discriminated against a tenant based on familial status in violation of the Fair Housing Act.
The Allegations made by HUD after an investigation: (the numbering corresponds with the complaint itself)
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15.Complainant conducted an investigation of the subject property on December 16, 2012, and December 19, 2012. Complainant had two testers conduct site visits to determine whether the subject property’s ownership and management established community rules that unreasonably restricted children’s use of amenities.
16.On December 16, 2012, the first tester visited the subject property and met with Respondent Ritchey. The tester observed a sign posted at the pool that stated, “Children under the age of 14 should not use the pool without an adult in attendance.”
17.On December 20, 2012, the second tester visited Respondent Ritchey. Respondent Ritchey stated that no child under 14 could use the pool without the supervision of someone at least 18 years old. The tester also indicated that she saw a pool sign that said those over 17 could swim unsupervised.
18.Respondents provided HUD a sample lease used at the subject property, dated June 1, 2012. Three provisions in the lease state that rules and community policies are a part of the lease and violation of those rules are grounds for eviction. Specifically, the lease states,
18. COMMUNITY POLICIES OR RULES. You and all guests and occupants must comply with any written apartment rules and community policies, including instructions for care of our property. Our rules are considered part of this Lease Contract. We may make reasonable changes to written rules, effective immediately .
19.LIMITATIONS ON CONDUCT. . .. Any swimming pools, saunas, spas, tanning beds, exercise rooms, storerooms, laundry rooms, and similar areas must be used with care in accordance with apartment rules and posted signs…
32. DEFAULT BY RESIDENT. You’ll be in default if: . (2) you or any guest or occupant violates this Lease Contract, apartment rules . . . Eviction. If you default , we may end your right of occupancy…
19. On November 14, 2014, HUD investigators observed a pool sign that stated: “CHILDREN UNDER 12 YRS OLD MUST BE ACCOMPANIED BY AN ADULT.”
20. On November 14, 2014, Respondent Implicity’ s Regional Manager, Sonia Torres, gave HUD investigators Implicity’s Welcome Letter and Community Policies and Addendums Packet used at the subject property. It stated that the policies and procedures contained in the packet were an addendum to the lease contract and violating the policies would result in lease termination. Several sections discuss limitations on the activity of children, specifically:
9. POOL RULES: … Persons under 12 years of age must be accompanied by an adult.
10. LAUNDRY ROOMS: … Persons under the age of 16 must be accompanied by an adult.
11.MINOR PERSONS: For safety reasons, persons under the age of 16 are not permitted in the swimming pool unless accompanied by an adult. Persons under the age of 16 should not be left unsupervised in an apartment. . Failure of an adult resident to provide such access and supervision will be considered a breach of the lease agreement…Please do not leave your children unattended. Parking lots are not to be used as playgrounds, if your children are left playing in the street with their bikes, scooters, etc you will be given a 24 hour notice to vacate.
21. Respondent Implicity’s Welcome Packet includes a document entitled SWIMMING POOL/SPA ADDENDUM AND ACKNOWLEDGEMENT, which states, in part: “2) Resident agrees that persons under sixteen (16) years of age must be accompanied by an adult who is trained in swimming.”
22. Respondent Implicity’s Welcome Packet includes a document entitled POOL POLICIES AND RULES, which also states, in part: “5. Children under the age of twelve (12) must be accompanied by a responsible adult. CHILDREN MAY NOT WATCH CHILDREN!”
23.In addition, Respondent Implicity’s Welcome Packet includes a document entitled POOL RULES ADDENDUM, which states, in part: “2. No children under the age of 12 allowed in pool area without adult supervision.”
24. On November 14, 2014, Ms. Torres stated to HUD’s investigators that the pool restriction for 12 year olds was another company’s policy. Lisa Dillard, Implicity’s Property Manager, said the current rule is that an adult must accompany those under 12 at the pool, but the old rule was 16.
25. On December 1, 2014, Respondent Ritchey stated a person had to be 18 years old to use the pool unsupervised, and residents knew this.
26. Read together, the child supervision and other community policies communicated the following specific rules placing restrictions on families with children and were discriminatory on their face based on familial status:
(i) Children under age 16 must be supervised by an adult at all times, including inside the apartment and throughout the community;
(ii) Inconsistent rules requiring adult supervision for children under age 16 and younger at the pool;
(iii) Children under age 16 cannot use the laundry facilities without adult supervision;
(iv) Unsupervised children cannot ride bicycles, skateboards, scooters, etc. in the parking lot or on the street.
27.Respondents’ above-enumerated rules placed unduly restrictive limitations on families with children that were not motivated by legitimate concerns for the health and safety of residents.
28. Respondents unlawfully imposed overly broad and unduly burdensome policies related to children that were not the least restrictive means to ensure safety and enjoyment of the premises by all tenants.
29.Respondents’ above-cited policies were directed specifically at children, and families with children, living at the subject property.
The laws that were applied in this case:
- It is unlawful to discriminate against any person in the terms, conditions, or privileges of the rental of a dwelling, or in the provision of services or facilities in connection therewith, because of familial status. 42 U.S.C. § 3604(b); 24 C.F.R. §§ 100.50(b)(2), 100.65(a), (b)(1) and (4).
- It is unlawful to make, print, or publish, or cause to be made, printed, or published any notice or statement, with respect to the rental of a dwelling, that indicates any preference, limitation, or discrimination based on familial status, or an intention to make any such preference, limitation, or discrimination. 42 U.S.C. § 3604(c); 24 C.F.R. §§ 100.50(b)(4), 100.75(a), (b), and (c)(2).
- “Familial status” is defined as one or more individuals, who have not attained the age of 18 years, being domiciled with a parent or another person having legal custody of such individual or individuals. 42 U.S.C. § 3602(k)(1); 24 C.F.R.
§ 100.20.
Legal Allegations In The Case:
By maintaining the overly restrictive policies cited in paragraphs 17-26, Respondents discriminated against Complainant and families with children in the terms, conditions or privileges of rental of a dwelling, or in the provision of services or facilities in connection therewith, because of familial status in violation of 42 U.S.C. § 3604(b).
31.By publishing discriminatory statements in community policies and lease addenda and on amenity signs throughout the subject property that indicated a limitation or discrimination against families with children, Respondents violated 42 U.S.C.
§ 3604(c).
32.By communicating to Complainant’s tester pool rules that indicated a limitation or discrimination against families with children, Respondents Blackacre and Ritchey violated 42 U.S.C. § 3604(c).
33.As a result of Respondents’ discriminatory conduct, Complainant has suffered damages, including economic loss due to diversion of its resources and frustration of mission: 1) to investigate and determine the existence, nature, and extent of Respondents’ discriminatory housing practices; 2) to educate and perform outreach to counteract the effects of Respondents’ discrimination; and 3) to protect the fair housing rights of Complainant’s members, associates, and constituents from Respondents’ discrimination. This diversion of Complainant’s resources and
Respondents’ discriminatory housing practices frustrated Complainant’s mission to promote fair housing and eliminate discriminatory rental housing practices.
Conclusion By HUD:
WHEREFORE, the Secretary of the U.S. Department of Housing and Urban Development, through the Office of General Counsel, and pursuant to 42 U.S.C.
§ 3610(g)(2)(A) of the Act, hereby charges Respondents with engaging in discriminatory housing practices in violation of 42 U.S.C. §§ 3604(b) and (c), and requests that an Order be issued that:
- Declares that the discriminatory housing practices of Respondents, as set forth above, violate §§ 804(b) and (c) of the Act, as amended, 42 U.S.C. §§ 3601 et seq. and its implementing regulations;
- Enjoins Respondents, their agents, employees, and successors, and all other persons in active concert or participation with them from discriminating against any person because of familial status in any aspect of the rental of a dwelling;
- Awards such monetary damages as will fully compensate Complainant for any and all damages caused by Respondents’ discriminatory conduct;
- Assesses a civil penalty against each Respondent for their violations of the Act pursuant to 42 U.S.C. § 3612(g)(3) and 24 C.F.R. § 180.671; and
- Awards any additional relief as may be appropriate, pursuant to 42 U.S.C. § 3612(g)(3).
So, at this point the owner and manager of the apartments have just been charged with violating the Federal Fair Housing Act as noted above and have not yet been found guilty, HUD’s charge will be heard by a United States Administrative Law Judge (unless any party to the charge elects to have the case heard in federal district court). If, after the hearing, the judge finds that discrimination has occurred, he may award damages to the complainant for the harm caused by the discrimination. The judge may also order injunctive relief and other equitable relief, as well as payment of attorney fees. In addition, the judge may impose fines to vindicate the public interest. If the matter is decided in federal court, the judge may also award punitive damages.
It will be interesting to see how this case comes out, but, in any event, it should serve as a warning to landlords should take notice and examine their policies and procedures to assure they do not have policies in place that could put the in the same spot as the apartment owners in this case.
