HOA Legal Compliance: A Primer on the Fair Housing Act for Homeowners Associations
The Fair Housing Act prevents many types of discrimination in housing. Here's a basic overview of how it affects your homeowners association.
1) It prohibits discrimination against families with children under 18. "That's discrimination based on familial status," explains Bob Tankel, principal at Robert L. Tankel PA in Dunedin, Fla., a law firm that advises associations. "Associations have to be careful in creating objective descriptions of rules, policies, and restrictions. For example, rather than saying, 'Children may not play in the driveway,' you should state, 'Persons may not play in the driveway.' If you're making a pool rule, rather than saying, 'People under the age of X must be accompanied by a person over the age of Y,' it's better to state, 'If you're under 48 inches tall, you must be accompanied by a person over 48 inches tall.' Finally, rather than saying, 'Children must wear diapers,' state, 'Incontinent people must wear rubber pants.'"
2) It requires that you make reasonable accommodations for people with disabilities. "The Fair Housing Act requires that if somebody with a disability makes a request for either a modification or an accommodation, if it's a reasonable request that's not an undue burden on the association, your association is required to permit it," says Matthew A. Drewes, a partner at Thomsen & Nybeck PA in Edina, Minn., who represents associations. "What people sometimes don't realize is that there's a distinction between a modification and an accommodation, and both have to receive due consideration. A modification is a request that a certain physical characteristic be changed—like a ramp up to a doorway or other physical changes to the property. An accommodation would be a change in the rules or allowing people to have assigned parking spaces they wouldn't otherwise have."
There are, of course, gray areas. "In most cases, the presumption is that, assuming there's a disability and that's pretty easy to determine, the person is entitled to the modification or accommodation," says Mark Makower, a partner at Dickinson Wright PLLC, who specializes in association law in Bloomfield Hills, Mich. "The question we deal with is to what extent can we require modifications to requests for aesthetic or functional reasons. Perhaps a resident wants a ramp on a stairway that's only three feet wide. That's hard. The other issue is who pays for what? The general rule is the person making the request is probably going to end up paying for the accommodation."
If your association receives a request for an accommodation or modification, says Drewes, your best course is to halt any enforcement activity or fines that have been imposed against that person until the request can be properly investigated. "Any investigation should be done privately within the board or by a committee within the board," he says. "Neither the investigation nor the results should be publicized because of the sensitive rights at play."
For more information, see Fair Housing: New Guidelines Describe Modifications You Can't Refuse; What You Need to Know and Fair Housing: What You Must Know about Accommodating Disabled Residents in Your HOA.
3) It prohibits all forms of discrimination based on protected classes. With more associations foreclosing on delinquent owners and then renting out the units, you must understand the act's prohibition on rental discrimination. Under the act, discrimination on the basis of protected classes—race, color, national origin, religion, sex, disability, familial status, and age—is barred.
Tankel recommends basing as much of your rental decisions as possible on factors that can be documented on paper, such as financial scores. "Make sure whatever criteria you're using to determine who's going to rent or occupy property the association is renting out is in compliance with state and federal fair housing laws and the U.S. Constitution," says Tankel. "You can find out just about everything you need to know on paper. The less physical interaction your association has with the potential occupants, the better. Here in Florida, testers are routinely sent out to properties being rented, and they'll see if there's discriminatory steering going on. This isn't an abstract idea. It goes on."
The issue of discrimination on the basis of protected classes also arises in associations that screen residents. "Most associations in Florida have a screening process where a new purchaser has to complete an application and can be approved or denied by the board," says James Donnelly, president and CEO of Castle Group, a property management company in Plantation, Fla., that manages 55,000 association units. "That's where you have to be incredibly careful. Our advice is that you don't refuse any application unless you've received legal advice."
Tankel goes even further. "Most communities have no authority to physically interview someone," he explains. "I've asked many board members, 'Show me the rule where it says you have that authority,' and they have no answer. More communities have gotten in trouble with screening people than have been well served by it."
Also be careful about decisions in other areas of your operations. "Familial status, race, religion, and other protected classes can't be used as a basis for making decisions about letting people rent their units, architectural changes, or things of that sort," says Drewes. "You can't make decisions about rights that everybody has based on those factors."
Finally, remember that each state has passed its own version of a fair housing or civil rights act that prohibits certain types of discrimination. Some states add such factors as age or sexual orientation to protected classes. Be sure to check with an attorney in your state to know the specific rules.