The Fair Housing Act and Protected Classes:
What Your HOA Needs to Know
This week's tip is taken from a new article that explains three
areas of the federal Fair Housing Act (FHA) that are critical for
condo and HOA boards to understand. Here we'll cover just one
area: protected classes.
The FHA 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
Bob Tankel, principal at Robert L. Tankel PA in Dunedin, Fla., a
law firm that advises associations, 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," he says.
He adds, "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."
Bob 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."
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.
For more information about the FHA and what you should know,
see our new article. Go there now »