“Cooper’s House” fair housing suit dismissed by judge

Amanda Maher
Amanda Maher | 5 min. read
Get the latest industry insights.

Published on May 10, 2016

It’s hard to imagine an otherwise mundane 12’ by 8’ playhouse (pictured here) making its way into international news—but “Cooper’s House” has done just that.

The $5,000 playhouse was installed by Dr. George Veloudis and his wife, Tiffiney, in 2011 for their son Cooper, who suffers from cerebral palsy. The playhouse is intended to provide a space for Cooper’s therapy sessions. The problem is that it’s in violation of the Homeowners’ Association (HOA) regulations at Andover Forest, the 481 member, deed-restricted community in South East Lexington, KY where the family lives. The HOA sent a “restriction violation” to the Veloudises and requested the playhouse be removed.

This came as a surprise to the Veloudises. The couple specifically read the through their homeowners’ agreement before purchasing the playhouse, and based upon its language, determined the structure was no different than the tree houses and swing sets already in their neighborhood—and it was recommended by doctors to help with Cooper’s therapy.

The Andover Forest HOA disagreed, saying that the playhouse was similar to a large garden shed. “It’s exactly the same as one of those outbuildings you could buy at Lowe’s or Home Depot,”—structures that aren’t allowed at Andover Forest, said Nathan Billings, counsel for the HOA. Deed restrictions prohibit “enclosed structures.” Even if the playhouse were considered like the tree houses or swing sets owned by others, these are only allowed in homeowners’ backyards. The playhouse was on the Veloudis’ side yard.

The Veloudises appealed the violation and applied for an exemption, given that the playhouse was intended to improve Cooper’s medical condition. The HOA wasn’t unreasonable; it granted a temporary exemption pending further investigation. “After consulting with two respected real estate attorneys, the HOA board was advised that it can no more legally change the deed restrictions related to enclosed structures than it can alter the property boundaries in each deed,” wrote the board in an email.

After a lengthy due diligence process, the HOA passed a resolution granting the Veloudis’ request to keep the structure, but conditioned the exemption upon proof that a doctor or therapist had prescribed the playhouse for medical treatment. The HOA argued that these records would help it determine whether “Cooper’s House is ‘reasonable’ and ‘necessary’”.

The Veloudises rejected these conditions and filed a lawsuit against the HOA citing discrimination.

It sparked widespread controversy in the community. Most people seemed to side with the Veloudises. The HOA received angry phone calls and hate mail. People took to social media to show their support for the family. The Kentucky House of Representatives even proposed “Cooper’s Law,” which would nullify deed restrictions on outdoor structures deemed medically necessary for children aged 12 and under.

Litigation proved to be a drawn-out process, and the Veloudises eventually purchased a new home in 2013 and moved out of the neighborhood.

Not long thereafter, the U.S. Department of Justice filed a lawsuit of its own against the neighborhood association, alleging it discriminated and retaliated against the family when it failed to make reasonable accommodations for their son—a violation of the federal Fair Housing Act. The HOA’s property management company, EMG Management Services, was also named in the complaint.

Edwin Gibson, an owner of EMG Management Services, explained that his company is just there to enforce deed restrictions for the homeowners’ association—not to create the rules or dictate policy. “We issue the violations,” Gibson said. The company manages more than 7,000 homes in homeowner associations throughout the state and “we do not discriminate against anybody,” he assured.

Things finally came to a head at the end of March, when U.S. District Judge Karen Caldwell dismissed the case with prejudice. The case largely hinged on Cooper’s medical records, and after further investigation, it turns out that the medical records that the Veloudises supplied had been doctored (pun intended!).

“After more than a year of litigation, attorneys for the association found evidence that certain documents that the Veloudises, through their attorney, had supplied to the association and relied upon to support their claim that ‘Cooper’s House’ was medically necessary for their son’s therapy were in fact fraudulent,” said the defendants’ attorneys in a new release.

The Association’s President, Ernie Stamper, said,

I am pleased that after more than four years of false and unfair accusations, the HOA and its Board have been vindicated. From the beginning of this matter, we’ve acted in good faith seeking to discharge our obligation to apply the deed restrictions applicable to all homes in the neighborhood fairly and equally, while being responsive to any legitimate request for accommodation.

The “Cooper’s House” controversy shows just how complicated things can get when trying to carry out the duties of a homeowners’ association. HOA members might initially be inclined to self-manage the association through a volunteer board of directors, but when problems arise, professionally managed HOAs can add tremendous value.

Allegations of discrimination need to be taken seriously. In this situation, the HOA protected itself by having an established and well-respected property management company issue violations on its behalf – in accordance with the language of the deed restrictions, but also in accordance with federal, state and local fair housing laws.

Read more on Legal Considerations
Amanda Maher

Amanda Maher is a self-proclaimed policy wonk who dabbles in real estate law. She holds a B.S. in Political Science and Sociology from Boston University, as well as a master's in Urban and Regional Policy from Northeastern.

Trending Stories For You
Accounting & Taxes 10 property management bookkeeping basics
Since one of the core responsibilities of a property manager is to manage an owner's assets, income, and expenses, you’re constantly dealing with accounting whether…
Laurie Mega
| 7 min. read
Accounting & Taxes How does a 1031 exchange work? What property managers should know
More and more property managers are finding their clientele shifting from accidental landlords to strategically minded rental real estate investors. And they're relying on the…
Amanda Maher
| 5 min. read
Maintenance & Improvements Multi-family winterization checklist: 18 steps to take ASAP
For most of the country, winter is at our doorstep—and as with winters past, it could bring billions of dollars in property damage nationwide. Between…
Jason Van Steenwyk
| 7 min. read

Be a more productive
property manager