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Watch your language: What can we learn from recent HUD enforcement actions?

Legal Concerns

Every so often, we take a look at Housing and Urban Development (HUD) regulation enforcement activity to examine which mistakes property managers and landlords are making; how enforcement officials are detecting and investigating violations; and which enforcement actions are being taken.

After all, experience is the best teacher, but a fool will learn from no other!

Familial Status Discrimination

The Fair Housing Act makes it illegal for housing providers to discriminate against pregnant women, parents or guardians of children under age 18, or individuals seeking custody of minor children. In 2015, HUD filed a series of complaints against Delap Real Estate LLC, a Massachusetts property manager. HUD regulation compliance officials posing as potential rental applicants reported that Delap employees made the following mistakes:

  • Discouraging applicants with children from applying
  • Using discriminatory language in their communications and advertising
  • Altering the terms and conditions of occupancy, expressing preferences and limitations based on familial status

The company denied any wrongdoing, but they ultimately entered two settlement agreements to pay $9500 to the testing agency and $6500 to the Housing Discrimination Project. They were also required to create a non-discrimination policy; attend and pay for HUD-approved training; use the phrases “children welcome” and “family-friendly” in their ads; submit published ads to HUD officials for one year; develop a public service campaign on four local radio stations; and pay for three weeks of advertising in two local newspapers.

Pool Rules Get Landlords and Property Manager in Hot Water

HUD also went after a Texas property manager for illegal discrimination on the basis of familial status. HUD’s case against Blackacre LLC Implicity Management Company and Pebble Beach Apartments LLC started with a simple pool rules misstep that any property manager or community director could make.

In 2012, a tester sent to the property by HUD investigators saw a sign near the pool that read, “Children under the age of 14 should not use the pool without an adult in attendance.” Another sign stipulated that those over age 17 could swim unsupervised. In 2014, HUD investigators noticed a third poolside sign that advised, “Children under 12 years old must be accompanied by an adult.”

Other signs, lease documents, and addenda stated that children under age 16 could not enter laundry rooms without supervision; must be supervised by an adult at all times inside the apartment and throughout the community; and could not ride bikes, skateboards, or scooters unsupervised in the parking lot or on the street. They declared that the property grounds were not to be used as playgrounds, and that if children were left “playing in the street” then tenants would receive a 24-hour notice to vacate.

The Department of Housing and Urban Development filed an action against these property managers and owners, claiming that the rules placed undue restrictions on families with children “that were not motivated by legitimate concerns for the health and safety of residents.” The case is still being adjudicated.

Disability Discrimination

The Secretary of Housing and Urban Development also recently filed an action against Persaud Bramante Apartments LLC and its owners. The housing providers maintained unassigned, first-come, first-served parking arrangements on the property, abstaining from assigning or reserving parking spots on an individual basis.

In September 2012, a disabled tenant unable to walk more than 200 feet requested an accessible, reserved parking space. The owners acknowledged the request and her right to reasonable accommodations. However, when they installed an accessible parking space at the entrance most convenient to her apartment (the only entry without stairs), they didn’t assign it to her. When the tenant asked the owners to reserve the spot for her, they refused.

She had to compete with other disabled individuals for use of the space, preventing the tenant from parking there numerous times. She was forced to walk hundreds of feet from remote lots and climb stairs to reach her apartment, resulting in several falls. Ultimately, she decided to terminate her lease; but she claims damages from the falls, as well as from inconvenience, humiliation, and having to find new housing. This case is also still being adjudicated.

Steering

Federal regulators also went after two Denver landlords and an onsite property manager. The manager admitted to placing families with children in rear units and childless families in the front when speaking with a tester sent to investigate the property. According to HUD, this constituted illegal “steering” and amounted to discrimination on the basis of familial status. HUD slapped the owners and the property manager with a $16,000 fine for each violation.

The landlord and onsite manager claimed that they tried to keep children in the rear of the building due to hazardous driving conditions in the front lot. According to local media reports, residents didn’t buy that story. At any rate, the landlord’s safety concerns were not enough to trump allegations of steering and discrimination.

The major lesson to learn from this incident is in the fact that nobody actually complained to regulators. A regulatory agency scanning Craigslist ads noticed that this property billed itself as “a quiet community.” Those “code words” were enough to attract the attention of Denver Metro Fair Housing Authority regulators and initiate an investigation that was ultimately referred to the Feds.

Conclusion

While some of these respondents probably had it coming, recent HUD regulation enforcement actions prove that landlords and property managers need to use extreme care when crafting language on notices, advertisements, and rental listings. Even when no one complains, seemingly innocuous language like “quiet community” can attract attention from regulators and send testers to your property.

Onsite managers should be well-trained on discrimination law, staying informed on the kinds of statements that get management companies and building owners in trouble. Time and again, we see questionable situations turned into enforceable actions because a property manager got too chatty with testers and allowed the conversation to stray beyond basic unit attributes, qualifications, and similar topics.

Jason Van Steenwyk

Jason is a freelance writer and editor, as well as an avid fiddler. His articles have been published in a number of real estate publications including Wealth and Retirement Planner and Bankrate.com. He lives in Fort Lauderdale, FL with his cat, Sasha, and an unknown number of musical instruments.