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Answer.   I’ll try.  First let’s start with some definitions:

Section 603 of the FCRA defines a “consumer report” as:

 

“…any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for (a) credit or insurance to be used primarily for personal, family, or household purposes***

 

Section 605 provides that “…no consumer reporting agency may make any consumer report containing any of the following items of information:

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(3) Paid tax liens which, from date of payment, antedate the report by more than seven years.

(4) Accounts placed for collection or charged to profit and loss which antedate the report by more than seven years

1. Any other adverse item of information, other than records of convictions of crimes[1] which antedates the report by more than seven years (Emphasis added.)

Based upon the preceding text in subsections (3) and (4), I read (5) to mean that 7+ year old criminal convictions are excluded from the list of 7+ year old adverse information that is prohibited to be a consumer report.

 

So, from a consumer reporting perspective, I do not believe there is any restriction for convictions over seven years old.

 

The position of HUD is an entirely different matter.  This has nothing to do with consumer reporting; rather it relates to HUD’s views on “disparate impact”.

 

Disparate impact holds that certain practices in employment, housing, etc., may be considered discriminatory under the Fair Housing Act, if they have a disproportionately "adverse impact" on certain members of a protected class, i.e. those falling into the following groups: Race, color, religion, sex, disability, familial status or national origin.[2] 

 

Today, a landlord may be found to have discriminated against a prospective tenant, not because of an intentional discriminatory act, such as rejecting him or her based upon race or religion, but unintentionally, because the landlord relied upon a perfectly legal basis, except that it had a disproportionately adverse impact on members of a protected class. Proof of the “disproportional impact” is usually based upon some statistical correlation showing that a certain class of protected persons are negatively impacted more than others. In other words, unintentional discrimination can now be a violation of the Act.

 

On April 4, 2016, the U.S Department of Housing and Urban Development (“HUD”) issued its “Office of General Counsel Guidance on Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate-Related Transactions” (hereinafter, the “Memo”). The full text of the 10-page Memo can be found here. Not surprisingly, it follows the June 25, 2015 ruling by the U. S. Supreme Court, in the Texas Dept. of Housing vs. Inclusive Communities case, which upheld the much-debated concept of “disparate impact” under the Fair Housing Act, as amended (the Act”). 

 

At footnote 43 of the Memo, the following appears:

 

***see Megan C. Kurlychek et al., Scarlet Letters and Recidivism: Does an Old Criminal Record Predict Future Offending?, 5 Criminology and Pub. Pol’y 483 (2006) (reporting that after six or seven years without reoffending, the risk of new offenses by persons with a prior criminal history begins to approximate the risk of new offenses among persons with no criminal record). (Emphasis added.)

 

Does this mean that six or seven years is the maximum look-back that landlords can make when screening someone’s criminal background? I submit that in non-violent crimes, this is not an unreasonable review period. But in cases of crimes to the person, and most significantly, rape and child molestation, I agree a seven year period is not enough. However, the Memo is not to be read to say that any conviction over seven years may not be taken into consideration when screen potential tenants. Its purpose is to “…issue guidance, mostly by way of examples and prior case law, in how the use of criminal history during the tenant-screening process, may, and may not, trigger a disparate impact result.”

 

 

 

Here are some tenant screening tips based upon one of my earlier MHCO Q&As:

 

1.Beware of testers, calling over the phone and asking if you will rent to persons with a criminal background. Be careful about answering these blind calls with a “yes” or “no”. Make sure callers understand that no rental decisions are made in advance of reviewing all relevant background information, including a criminal background report. Encourage the caller to either come to the office and pick up the necessary paperwork, or if they prefer, send it to them at their provided address.

 

2.Ultimately, landlords should plan on making adjustments in their rules and application process.  

 

3.Do not have a rule or policy that treats an arrest, with no conviction, the same as a conviction. If you currently have such a rule, it should not be enforced.

 

4.Do not have a blanket guideline providing, for example, that conviction for any crime is an automatic denial.

 

5.Be sure that all rules or policies concerning criminal records are uniformly enforced – no exceptions.  However, note No. 7 below. You should avoid a policy saying that all persons with a felony are automatically disqualified. There is a world of difference between an ex-felon who served time for embezzlement ten years ago and has been a contributing member of society ever since vs. an ex-felon who served time for aggravated battery, and has been in and out of jail for similar violent crimes over the past five years.

 

6.If possible, evaluate all other rental history, such as prior tenancies, employment, credit, income and affordability, before even going to the results of a criminal background check. If the prospective tenant does not pass one or more of these other criteria, then the rejection can be based on that, rather than a criminal background report, thus avoiding the disparate impact issue entirely.

 

7.In evaluating an applicant’s criminal history, do not use a “one size fits all” approach. There are several gradations of severity. Additional issues need to be addressed before making a decision to reject a prospective tenant based upon criminal history. For example:

 

a.How long ago was the conviction? (A single conviction over 6-7 years old, in most cases should probably not be used as the basis for a denial (excluding registered sex offenders, or those convicted of violent crimes).

 

b.What has the person been doing since their release?

 

c.Has the person been convicted once, or on multiple occasions?

 

d.What was the nature and severity of the crime?

 

8.Note that according to the Memo, a refusal to rent to an applicant who has a conviction for one or more drug crimes involving the manufacture or distribution (not mere possession) of a federally defined controlled substance is permissible and not subject to a disparate impact claim. In other words, a landlord or manager may legally base the refusal to rent based upon a conviction for manufacture or distribution is not a violation of the Act, based upon disparate impact. Per the Memo: “Section 807(b)(4) of the Fair Housing Act provides that the Act does not prohibit ‘conduct against a person because such person has been convicted … of the illegalmanufacture or distribution of a controlled substance as defined in section 102 of the Controlled Substances Act (21 U.S.C. 802).’”

 

9.ORS 90.303 (Evaluation of Applicant) addresses some of the same issues as in the Memo, but not all of them. And where there is similarity, Oregon law does not go as far as the Memo on the issue of criminal records and disparate impact. Oregon’s statute provides:

 

(1) When evaluating an applicant, a landlord may not consider an action to recover possession pursuant to ORS 105.105 to 105.168 (Oregon’s eviction statutes – PCQ) if the action:

 

      (a) Was dismissed or resulted in a general judgment for the applicant before the applicant submits the application. This paragraph does not apply if the action has not resulted in a dismissal or general judgment at the time the applicant submits the application.

      (b) Resulted in a general judgment against the applicant that was entered five or more years before the applicant submits the application.

 

(2) When evaluating the applicant, a landlord may not consider a previous arrest of the applicant if the arrest did not result in a conviction. This subsection does not apply if the arrest has resulted in charges for criminal behavior as described in subsection (3) of this section that have not been dismissed at the time the applicant submits the application.

 

(3) When evaluating the applicant, the landlord may consider criminal conviction and charging history if the conviction or pending charge is for conduct that is:

     (a) A drug-related crime;

     (b) A person crime;

     (c) A sex offense;

     (d) A crime involving financial fraud, including identity theft and forgery; or

     (e) Any other crime if the conduct for which the applicant was convicted or charged is of a nature that would adversely affect:

            (A) Property of the landlord or a tenant; or

            (B) The health, safety or right to peaceful enjoyment of the premises of residents, the landlord or the landlord’s agent. 

 

1. Landlords should not assume that compliance with ORS 90.303 means that a denial of tenancy automatically avoids a disparate impact claim.  Landlords and managers should be extra-cautious in this minefield, since where federal law is more restrictive (i.e. burdensome on landlords), it will likely pre-empt state law.  Thus, compliance with state law, but non-compliance with federal law, can still result in a disparate impact claim under the Fair Housing Act, as amended.

 

Here are some considerations to keep in mind:

 

1. The Memo and ORS 90.303 both prohibit screening applicants for arrests, regardless of the conduct that led to the arrest;
2. ORS 90.303 says that an arrest which has not been dismissed, but is still pending (i.e. a conviction is still possible) may be considered in tenant screening. The HUD Memo does not address this issue – so we don’t know what the feds would say. Accordingly, it may be prudent to take a more balanced approach in these situations. For example, rather than having a blanket policy that a tenant will automatically be rejected if their charge is still pending, landlords and managers should evaluate the matter based upon (i) When the matter will be resolved, e.g. a week, a month, or a year? (ii) What was the charge? (iii) If convicted, would the applicant automatically be denied? As noted above, the whole issue of criminal background information is an element of the application process that need not be fully vetted, if, regardless of the crime, its severity or recency, the person would fail the application process on other grounds. If so, there is no need to rely upon a landlord’s criminal background policy at all. However, a word of caution here: Be prudent when selecting a basis for denial. Using a weak reason can be viewed as pretextual if the applicant is a member of a protected class. In other words, beware of using a credit basis for denial if it is “iffy” and exclude the criminal background basis. In these cases, landlords and managers should consult legal counsel; it may be best to use both bases.
3. ORS 90.303 says that a landlord may consider a conviction for certain conduct, generally relating to threats of violence, drugs, sex, or property damage, which would indicate risks to fellow tenants or the landlord. However, the HUD Memo is broader and more subtle (i.e. it demands an evaluation beyond a one-size-fits-all rejection policy). In short, do not rely solely on ORS 90.303, to the exclusion of the more balanced approach demanded by the Memo.
4. Unlike the HUD Memo, ORS 90.303 does not address how long ago the conviction occurred, or require an evaluation of what the applicant had been doing since the conviction. (e. g. evidence of rehabilitation). The General Landlord-Tenant Coalition could not reach agreement on whether to use a five or seven year standard in the statute[3], nor whether multiple convictions should be dealt with differently than single ones. Accordingly, our statute is silent on this issue.

 

• .  Landlords could be forgiven for feeling they are caught on the horns of a dilemma. If they follow Oregon statutes, it may not be enough. And while it may be sufficient to follow federal law, today that requires a “disparate impact” analysis, which, at best, is a shifting and nuanced set of “guidelines” based upon anecdotal information.

 

Perhaps most unsettling is the fact that today, a landlord’s good faith effort to comply with the tenant application process is not enough. Instead, unintentional discrimination, now known under the more benign title, “disparate impact”, has become a basis for Fair Housing claims. Yet unlike statutes, which can provide distinct guidance, disparate impact is more of a concept than a law, since it ignores one’s intent, and looks instead to the perceived long term consequences of certain actions based upon empirical statistics, academic writings, analysis, surveys, demographics and footnotes. Is this something landlords can or should be expected to fully appreciate and understand when evaluating a person for tenancy? 

 

[1] It would have helped if a comma had been inserted after “convictions of crimes”.

[2] Note, many local jurisdictions have additional class, including sexual orientation.

[3] It is believed that most screening services do not report criminal information over seven years old.

Having a one-size-fits-all approach also can lead to fair housing trouble when it has a discriminatory effect on people protected under fair housing law. One example involves occupancy policies: If they’re too restrictive, they can have a discriminatory effect on families with children. Though it’s generally accepted that two persons per bedroom is a reasonable occupancy policy, that’s only a rule of thumb—and subject to a number of exceptions.

Finally, the law itself offers some exceptions, but it’s important to know whether—and how—they apply to avoid fair housing trouble. For instance, the law generally forbids communities from excluding families with children from living there, but there’s an exception for senior housing communities. To claim the exception, however, communities must meet strict technical requirements—unless you do, you’ll invite a fair housing complaint if you deny housing to families with children.

In this article we will review fair housing requirements and give you seven rules—along with the most common exceptions—to help your community avoid fair housing trouble.

WHAT DOES THE LAW SAY?

The federal Fair Housing Act (FHA) bans housing discrimination based on race, color, religion, sex, familial status, national origin, and disability.

The vast majority of fair housing cases are for intentional discrimination—that is, purposely denying housing to people—or treating them differently—because of their race, color, religion, sex, national origin, familial status, or disability. In these cases, the focus is on intent—why the community acted the way it did. If, for example, an applicant accuses you of intentional discrimination for refusing to rent to him based on his race, the community may defend itself by proving that it rejected his application for a legitimate, nondiscriminatory reason: The applicant didn’t satisfy its standard screening criteria, which were consistently required of all applicants.

But the law goes further to outlaw what’s known as “disparate impact” discrimination—that is, housing practices that appear to be neutral, but have an unjustified discriminatory effect on members of protected classes, even if there’s no intent to discriminate. In contrast to claims for intentional discrimination, fair housing claims based on disparate impact aren’t so much concerned with your intent, but on the effects, of your policies or practices. For example, courts have ruled that overly restrictive occupancy policies violate fair housing law because of their discriminatory effect on larger households, which are more likely to be families with children.

RULE #1: Consistency Is the General Rule

EXCEPTION: Understand When the Law Requires You to Make Exceptions

As a general rule, it’s a good idea to establish reasonable, nondiscriminatory rules policies—and to apply them consistently—to counter any perception that your community treats people differently based on race, color, religion, sex, familial status, national origin, and disability. Applying the same policies and rules to everyone helps avoid accusations of conduct made unlawful under the FHA, such as:

• Excluding members of protected classes from living in your community;
• Falsely denying that housing is available to members of protected classes;
• Discouraging members of protected classes from living there;
• Restricting where members of protected classes may live in your community;
• Setting different terms, conditions, or privileges or facilities for members of protected classes;
• Delaying or denying requests for maintenance services for members of protected classes;
• Enforcing community rules more harshly or leniently for members of protected classes;
• Making eviction decisions because of a protected characteristic;
• Making statements expressing a preference for or against members of protected classes; or
• Threatening, coercing, intimidating, or interfering with anyone exercising a fair housing right.

Nevertheless, you should learn to recognize when fair housing law requires you to make exceptions to your general policies. The most important are requests for reasonable accommodations or modifications for individuals with disabilities. Under the FHA, it’s unlawful to refuse to make reasonable accommodations in the rules, policies, practices, or services if necessary for an individual with a disability to fully use and enjoy the housing. It’s also unlawful to refuse to allow reasonable modifications to the unit or common use areas, at the applicant or resident’s expense, if necessary for an individual with a disability to fully use the housing.

RULE #2: You Make the Rules When It Comes to Pets

EXCEPTION: You Can’t Apply Pet Rules to Assistance Animals

Your community, like many others, may have rules about pets. You may forbid all pets, or you may allow only certain types, breeds, and sizes of animals at your community. Fair housing law doesn’t prevent you from regulating whether and when residents may keep pets at your community—as long as you understand that you must make an exception to your pet rules as a reasonable accommodation for an individual with a disability who needs an assistance animal to fully use and enjoy the premises.

That’s because assistance animals are not pets under fair housing law. They’re animals that work, provide assistance, or perform tasks for the benefit of a person with a disability, or provide emotional support that alleviates one or more identified symptoms or effects of a person’s disability, according to HUD. Though most requests for assistance animals are for dogs, HUD says that assistance animals may include a wide variety of species—not just dogs—that provide various forms of assistance—including emotional support—with or without specialized training.

Though many communities have policies banning so-called dangerous breeds, most notably pit bulls, HUD says that breed, size, or weight limitations may not be applied to assistance animals. That doesn’t mean that you must allow a resident to keep a dangerous animal—even if it’s an assistance animal. Though you can’t apply a blanket rule against certain dog breeds, you can exclude a specific animal that poses a direct threat to the safety of others.

Example: In October 2017, the Vermont Supreme Court upheld an eviction of a resident who had a dog in violation of the community’s no-pet policy. The resident claimed that she had disabilities and that the dog, which had been living with her for some time, was an emotional support animal.

Though the resident was disabled and had a disability-related need for an emotional support animal, the court ruled that she wasn’t entitled to a reasonable accommodation to keep this dog, Duchess, because it posed a direct threat to the safety of others. The evidence showed that Duchess often exhibited aggressive tendencies and that other residents were afraid of her. The resident, who was unable to restrain the dog, had tried and failed to reduce the potential for aggression that the other residents had reasonably feared. While sympathetic to the resident’s attachment to Duchess, the court said that the landlord was not required to do everything humanly possible to accommodate her disability [Gill Terrace Retirement Apartments Inc. v. Johnson, October 2017].

Though your rules may require pet owners to pay extra pet fees or deposits, you must make an exception to the rules for assistance animals. According to federal guidelines, communities may not require individuals with disabilities to pay extra fees or security deposits as a condition of allowing them to keep assistance animals as a reasonable accommodation. If the assistance animal causes damage, you can charge the resident for the cost of repair—but only if you have a general policy requiring all residents to pay for damages they cause to the premises.

RULE #3: You Can Regulate Parking at Your Community

EXCEPTION: You Must Consider Disability-Related Requests for Special Parking Arrangements

For the most part, it’s up to you to determine whether—and how—to regulate parking at your community. Whatever your policy, however, you should be prepared for reasonable accommodation requests by individuals with disabilities who say they need an exception to your parking policies so they may use and enjoy their home.

A prime example is a request for an exception to parking rules for an individual with a mobility impairment. In general, you should grant reasonable requests from applicants or residents with mobility problems for parking accommodations, such as a designated parking space near a building entrance or a resident’s unit, an accessible parking space, or a space designed for van parking. When there’s a clear relationship between the resident’s disability and the need for the requested parking accommodation, the law requires the community to grant the request unless it’s unreasonable—that is, it would impose an undue financial and administrative burden on the community or fundamentally alter the nature of the community’s operations.

Nevertheless, HUD says that the FHA does not require a community to make an exception to parking rules unless there is an identifiable relationship between the requested accommodation and the individual’s disability. The requested parking accommodation must be more than a mere convenience—it must be necessary to allow the resident to live in and fully enjoy the community.

Example: In September 2017, a court ruled against a resident who accused her community of refusing her requests for reasonable accommodations, including her request to reserve the three parking spaces in front of her condo to prevent her neighbors from parking there. The resident claimed that she had a mental disability and that she needed all three parking spaces because she felt unsafe and harassed when strangers parked in front of her home. Allegedly, she rejected the community’s offer to reserve one designated parking space for her, because the installation of a sign to mark the space would block her view and cause psychological distress. She sued, accusing the community of disability discrimination.

Siding with the community, the court ruled that the resident failed to show that her request for three reserved parking spaces were either necessary or reasonable to accommodate her mental disability. She presented a doctor’s note, but it didn’t explain the nature of her disability or why reserving the three parking spaces in front of her unit was necessary to afford her equal opportunity to use and enjoy her dwelling.

The resident also failed to show that reserving these three parking spaces was a reasonable accommodation. The three parking spaces at issue were among the 150 non-reserved parking spaces at the condo complex and all the condo owners had rights to the spaces. Reserving three of them for the resident couldn’t be done without amending the condo documents and reducing the rights of all other owners. The requested accommodation was unreasonable because her unproven need for the spaces was entirely outweighed by the burden that others would suffer if the accommodation were granted [Burrows v. Cubba, September 2017].

RULE #4: You Can Require Applicants to Satisfy Financial Criteria

EXCEPTION: You Must Consider Disability-Related Requests to Modify Financial Requirements

You’re entitled to, and should, determine financial criteria that you apply consistently to all applicants. If you ask some applicants to meet stricter financial requirements than others have to meet, then an applicant may believe he’s being treated differently because of his race or other protected characteristic and claim discrimination under fair housing law.

Nevertheless, you could face a request for an exception to your financial requirements as a reasonable accommodation for an individual with a disability. For example, an applicant with a disability may not qualify financially for a unit in your community, but offer to have someone who will co-sign and promise to pay the rent for him. Depending on the circumstances, refusing to consider such requests for exceptions to your community’s financial requirements could be viewed as denying requests for reasonable accommodations required by fair housing law.

Example: In July 2017, a New York co-op community agreed to pay $125,000 in damages and penalties to resolve a fair housing lawsuit for its alleged refusal to grant a reasonable accommodation to an applicant with a disability.

In its complaint, the Justice Department alleged that the community and its property managers repeatedly denied the application of a 34-year-old man to purchase a one-bedroom unit because of his disabilities, which included serious heart problems, learning disorders, and depression. Allegedly, the man and his family asked that ownership of his unit be placed under a legal trust to help him manage the requirements of cooperative housing, but that the community refused the requests without explanation. As a result, the complaint alleged, the man was forced to continue living in a boarding house with abysmal conditions, grew increasingly depressed, and suffered another heart attack.

“Every member of our society is entitled to equal access to housing and the independence and dignity that it provides,” Acting U.S. Attorney Joon H. Kim said in a statement. “With this resolution, we again emphasize that condos, cooperatives, landlords, and property managers must provide reasonable accommodations to people with disabilities” [U.S. v. 505 Central Avenue Corp., July 2017].

In some cases, disabled applicants have asked for an exemption from financial requirements as a reasonable accommodation, arguing that their disabilities caused them to suffer financial hardships, such as the inability to work. That argument has been rejected by a number of courts, but these can be difficult cases to resolve, so it’s a good idea to get legal advice when confronted by such requests.

RULE #5: You Establish Policies on When and How Rent Is Paid

EXCEPTION: You Must Consider Disability-Related Requests to Modify Rental Payment Policies

You have the right to require residents to pay their rent in a timely manner, but you should consider disability-related requests for exceptions to your policies on how rent is paid. For example, federal guidelines state that a community with a policy requiring payment of rent in person at the leasing office must make an exception for a resident who has a mental disability that makes her afraid to leave her home. According to the guidelines, the community must grant her request to have a friend mail the rental payments as a reasonable accommodation.

Depending on the circumstances, you may also have to consider a disability-related request to change the rental due date. This may come from a resident who relies on disability benefits to pay rent, but who doesn’t receive the check until after the rent is due. If the resident can show that he needs the accommodation because of a disability, then you’ll need documentation to prove that his request is unreasonable because of its impact on your business operations.

Example: In April 2017, a court refused to dismiss a lawsuit accusing a Pennsylvania community and its management company of disability discrimination for allegedly denying a resident’s reasonable accommodation request for the change in his monthly rental due date until after he received his monthly SSDI benefit check. After conducting an investigation, fair housing advocates sued, alleging that the company wouldn’t permit any exceptions to its policies on the rental due date.

The court ruled that the advocates could pursue claims that the company unlawfully denied the resident’s reasonable accommodation request for an exception to the policy requiring rent payments on the first of the month. The company argued that it wasn’t required to grant accommodations related to a disabled person’s financial circumstances, but the advocates argued that SSDI recipients relied on their checks as their primary or only source of income because their disabilities rendered them unable to work. The court said it may be reasonable that the company be required to adjust its rent due date for disabled persons to be afforded equal housing opportunities.

Nevertheless, further proceedings were needed on the community’s claim that the accommodation request was unreasonable. The company argued that the request to change its policy on the rental due date posed an unreasonable financial and administrative burden on the company’s business operations. The company pointed out that it manages more than 35,000 rental units in approximately 140 communities in 10 states. According to the company, its current system of rent collection and handling court proceedings is cost-effective and that the requested accommodation would “fundamentally alter the way” it does business and require a “major and expensive reprograming of software and business procedures [Fair Housing Rights Center in Southeastern Pennsylvania v. Morgan Properties Management Company, LLC, April 2017].

RULE #6: You Can Enforce Reasonable Occupancy Standards

EXCEPTION: General Two Person/Bedroom Standard May Not Be Reasonable in Some Circumstances

As a general rule, fair housing law doesn’t prevent communities from maintaining reasonable occupancy policies, but it’s unlawful to set overly restrictive occupancy standards that have the effect of excluding families with children.

Across the country, communities have come to rely on the industry standard—“two persons per bedroom”—as a reasonable occupancy standard. It comes from HUD in what’s known as the “Keating memo,” which states that the agency considers two persons per bedroom to be a reasonable standard. But, as the memo points out, that’s not a hard-and-fast rule, and HUD will consider other factors, including bedroom size and other “special considerations,” which may make the two person/bedroom standard unreasonable under the circumstances.

In recent years, fair housing advocates have challenged the use of the two person/bedroom standard where state or local occupancy laws may allow more people to live there based on square footage and other factors. It’s too soon to tell how it will all shake out, but for now, communities could face a greater risk of being challenged if they stick with a rigid one-size-fits-all occupancy standard without considering other factors listed in HUD’s Keating memo.

Example: In October 2017, the owner of a Washington community was ordered to pay more than $127,000 in damages for violating federal, state, and local fair housing laws based on familial status by enforcing an occupancy policy allowing only one occupant in studio units.

The case began when an advocacy group conducted fair housing testing at the 96-unit apartment complex where two-thirds of the units were studios, all over 400 square feet. According to the group, its testing confirmed that the community rented the studio units only to single occupants. The group sued, arguing that the community’s occupancy restriction had an adverse discriminatory effect on families with children.

The court agreed, rejecting the community’s claim of legitimate, nondiscriminatory reasons to justify the rule. Among other things, the community argued that the units were too small to accommodate more than one person, but the court pointed out that the city code allowed two people to occupy a studio unit as small as 150 square feet [Fair Housing Center of Washington v. Breier-Scheetz Properties, LLC, October 2017].

RULE #7: You Can’t Refuse to Rent to Families with Children

EXCEPTION: You Can Exclude Children ONLY if You Qualify for Senior Housing Exemption

The FHA prohibits housing discrimination based on familial status—which means the presence of a child under 18 in the household. The law protects families with children, along with anyone else who has legal custody or written permission to have a minor child living with them. It also applies to pregnant women and anyone in the process of obtaining legal custody, such as through adoption or divorce proceedings, of a child or children under 18.

On the whole, familial status is on the same footing as race and any of the other protected classes under fair housing law. Just as it’s unlawful to turn people away because of their race, you can’t turn people away because they have one or more children living with them. It doesn’t matter whether you—or your current residents—would prefer to be living among adults; it’s unlawful to deny housing to people—or to treat them differently—because there’s a child under the age of 18 in the household.

There’s only one exception that would allow you to exclude children from your community—but it applies only to senior housing communities that meet strict legal requirements to qualify as “housing for older persons.” The FHA recognizes three types of housing that may qualify under the familial status exemption as housing for older persons. The most common—55 or older—is also the most complicated: Among other things, 55+ communities must adopt policies and procedures to ensure that at least 80 percent of its units are occupied by at least one person 55 and older.

Senior communities that comply with these and other technical requirements are exempt from the general rules that protect families with children. There’s no middle ground—you either meet those requirements or you don’t. And if you don’t, you’ll likely trigger a fair housing complaint by adopting an “adults-only” policy to prevent families with children from living there.

Example: In September 2017, the owners and manager of three apartment buildings in Washington agreed to pay $95,000 to resolve allegations that they refused to rent to families with children. In its complaint, the Justice Department alleged that a manager told a woman seeking an apartment for herself, her husband, and their one-year-old child that the apartment buildings were “adult only.” Allegedly, the communities advertised their apartments as being in “adult buildings.”

“No family should be denied a place to live simply because they have a child,” added Anna Maria Farias, HUD Assistant Secretary for Fair Housing and Equal Opportunity. “HUD will continue to work with the Justice Department to ensure that property owners comply with their obligations under the nation’s fair housing laws.”

 

We’ll explain the current state of the fair housing law governing whether landlords can be liable for tenant-on-tenant harassment. We’ll outline the seven things you can do to manage these liability risks, and we’ll give you a tool, a Model Anti-Harassment Policy for Tenants, that you can use to implement these measures. We’ll finish the lesson with a Coach’s Quiz so you can see how well you learned the material.   

WHAT DOES THE LAW SAY?

The federal Fair Housing Act (FHA) bans housing discrimination on the basis of race, color, religion, sex, national origin, familial status, and handicap (disability). The FHA doesn’t specifically use the word “harassment.” But it’s well established that harassment is a form of illegal discrimination banned by general provisions of the law, including:

• Section 3604(b), which makes it illegal to “discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling, on in the provision of services or facilities in connection therewith”; and
• Section 3617, which makes it illegal to “coerce, intimidate, threaten, or interfere” with those who exercise their fair housing rights.

These provisions enable courts to hold landlords liable for the harassment they commit personally. But establishing landlord liability gets trickier when the harassment is committed by a third party.

What’s the basis for holding landlords liable for third-party harassment? Historically, the theory is based on comparing housing discrimination banned by the FHA, a.k.a. Title VIII of the federal Civil Rights Act, to employment discrimination banned by Title VII. The employer’s Title VII duty to protect employees from workplace harassment applies not only to their own conduct but also to that of managers, supervisors, and employees under their control. Over the years, the U.S. Department of Housing and Urban Development (HUD), courts, and fair housing tribunals have looked to Title VII for guidance in interpreting Title VIII as making landlords and other housing providers liable for harassment committed by managers, leasing agents, and other third parties under their control.

But using the Title VII comparison to hold landlords liable for harassment committed by tenantstakes a bigger leap of faith. After all, landlords don’t control their tenants the way employers control their employees. To get around this hurdle, HUD, courts, and tribunals have relied on the tort law standard of negligence to argue that landlords have a duty to prevent harassment that they know or should reasonably know about. Even though landlords don’t control tenants, they are in a position to take measures to prevent them from harassing other tenants.

The 2016 HUD Regulations

On Sept. 14, 2016, HUD took the first steps to turn what had previously been just a theory into an actionable legal principle by publishing new regulations holding housing providers responsible for failing to “take prompt action to correct and end a discriminatory housing practice by a third-party, where the [provider] knew or should have known” of the conduct and “had the power to correct it.”

Using the Title VII employment analogy, the regulations (entitled “Quid Pro Quo and Hostile Environment Harassment and Liability for Discriminatory Housing Practices Under the Fair Housing Act”) state that landlords can be liable for a “hostile housing environment” the way employers are for a “hostile work environment.”

The regulations define hostile environment harassment as unwelcome conduct that’s “sufficiently severe or pervasive as to interfere with. . . the [tenant’s] use or enjoyment of a dwelling.” Determination of whether hostile environment harassment exists is based on an objective, rather than subjective standard—that is, from the perspective of a reasonable person in the tenant’s position, as opposed to how the tenant actually experienced it. Key factors in the determination include:  

• The nature of the conduct;
• Where it took place;
• How often it took place (although a single incident may be enough if the conduct is egregious enough); and
• The relationship between the alleged harasser and the victim.

The Courts

Less than five months after their publication, the HUD regulations were relegated to the mothballs by the new Trump administration. As a result, the spotlight passed to the courts. There have been two significant federal court rulings on landlord liability for tenant-on-tenant harassment, one going for and the other against the landlord.

Landlord Is Liable: The Wetzel Case. Already grieving from the loss of her lover of 30 years to cancer, Marsha Wetzel’s life became a living hell once she moved into her Illinois retirement community. For 15 months, neighboring tenants regaled her with obscenity and verbal abuse because of her sexuality. They called her a “f***** d***” and a “lesbian f*****.” They harassed her physically, once knocking her off her motor scooter. Wetzel complained repeatedly to the landlord. But instead of stepping in to rein in the harassment, management labeled her a troublemaker and plotted her eviction.

Wetzel sued, but the federal court said that landlords aren’t responsible for tenant-on-tenant harassment under the FHA and tossed the case. In a landmark ruling, the Seventh Circuit Court of Appeals reversed, finding that she had a valid FHA claim for hostile environment harassment. To prove such a claim, a tenant must prove three things, the court reasoned:

1. The tenant suffered harassment based on a protected characteristic (in Wetzel’s case, her sexual orientation);
2. The harassment was severe or pervasive enough to interfere with her tenancy; and
3. The landlord knew about the harassment but didn’t take steps to stop it.

Although the decision tracks the HUD regulations, there’s one crucial difference: Unlike the regulations that hold landlords accountable for harassment they know or should reasonably know about, the court ruled that a landlord must have actual notice of the harassment, which the landlord in this case did [Wetzel v. Glen St. Andrew Living Community, LLC, 901 F.3d 856 (7th Cir. 2018)].

Landlord Is Not Liable: The Francis Case. A case from New York had similar facts but a totally different outcome. Like Wetzel, the New York tenant in this case was the target of “a brazen and relentless campaign of racial harassment, abuse, and threats” authored by his neighbor. And like Wetzel, his appeals for help from the landlord fell on deaf ears.

But that’s where the similarities ended. Unlike the Seventh Circuit, the Second Circuit Court of Appeals ruled, 7 to 5, that landlords can’t be liable for tenant-on-tenant harassment, even if they know it’s taking place, because they don’t exercise control over tenants’ behavior. To rule otherwise, the majority reasoned, would force landlords to intervene in a wide range of common disputes between neighbors [Francis v. Kings Park Manor, Inc., 2021 U.S. App. LEXIS 8761, __ F.3d __, 2021 WL 1137441].

The Bottom Line. The question of whether landlords have a fair housing duty to protect tenants from harassment based on race, color, religion, sex, national origin, familial status, and handicap (disability) and additional protected characteristics under state laws, remains unresolved at this time—other than in the Seventh Circuit, where such a duty does exist and the Second Circuit where it doesn’t. But there are nine other circuits that haven’t yet addressed the issue. Meanwhile, the new administration is very likely to adopt the 2016 HUD regulations authored while President Biden served as Vice President (although HUD hasn’t yet officially addressed the issue).

Key question: What, if anything, should you do to prevent tenants from harassing other tenants?

Answer: Take action. Keep in mind that while the current law may be unsettled, for landlords there’s much more at stake than what the law requires. Ensuring a harassment-free housing environment where residents don’t harass their neighbors is not only a moral but a business imperative, at least for landlords who care about the quality of their tenants’ lives. This is true for all forms of tenant-on-tenant harassment, not just harassment based on personal characteristics protected under fair housing laws. And, contrary to what the Francis court says, this anti-harassment imperative is one that landlords can achieve without having to constantly meddle in tenants’ private affairs and squabbles between neighbors.

7 THINGS TO INCLUDE

IN YOUR ANTI-HARASSMENT POLICY FOR RESIDENTS

Preventing tenant-on-tenant harassment in housing requires the same approach as preventing employee-on-employee harassment in the workplace. The starting point is to create and implement a written anti-harassment policy for the residents of your community. Like our Model Policy: Adopt Anti-Harassment Policy, Procedure & Guidelines for Tenants, your policy should include seven elements.

Element #1: Anti-Harassment Policy Statement

Start by drawing a line in the sand on harassment. State that, as landlord, you’re committed to providing a harassment-free housing environment enabling all tenants are to enjoy their tenancy. Make it clear that harassment is unacceptable and that you’ll follow a “zero tolerance” approach if anybody at the community engages in it [Policy, Sec. 1].

Element #2: Clear Definition of ‘Harassment’

Just about any kind of unpleasant or unwelcome conduct or treatment can be interpreted as “harassment” the way that word is used in everyday language. But in the fair housing context, “harassment” has a much narrower meaning. It’s important that tenants understand what harassment is so they can regulate their conduct accordingly. Specifically, define “harassment” as “action, conduct, or comment that can reasonably be expected to cause offense, humiliation, or other physical or psychological injury or illness to a tenant or other person.” And be sure to list examples. Equally important, explain what does not constitute harassment—namely, honest, good faith, and respectful disagreements—so tenants don’t “cry wolf” and make unjustified accusations any time they get into an argument with their neighbors.

Strategic Pointer: The Model Policy definition closely tracks HUD regulations in the sense that conduct must be severe or pervasive enough to create a hostile housing environment. But recognize that discrimination comes into play only when harassment is based on a person’s race, color, national origin, religion, sex, disability, familial status, or other protected class(es) under your state’s fair housing laws. Still, your enemy isn’t just discriminatory harassment but harassment of any kind. Accordingly, your definition should use the phrase “including but not limited to” so that your policy applies to any and all forms of harassment and not just discriminatory harassment [Policy, Sec. 3] .

Element #3: Harassment Reporting Protocols

Now we come to the hard part. Having established the general principles, the balance of your policy should be dedicated to what happens if harassment actually occurs. Since you can’t do anything unless you know about the harassment, the starting point is getting tenants to come forward to report the harassment they suffer or witness. That’s easier said than done.

First Choice: The best outcome is for tenants to settle the issue civilly between themselves without your having to intervene. So, start by suggesting that tenants who feel like they’re being harassed by a neighbor approach the person with their concerns and ask him or her to stop. “Many, if not most disputes between neighbors are the product not of harassment but simple miscommunication or misunderstanding that can be resolved by respectful conversation,” notes a New York fair housing attorney.

Fallback: Harassment victims may not feel comfortable or safe confronting the person who’s harassing them; or they may try the approach and find it ineffective. That’s why you also need to give them a way to summon help from their landlord. Let tenants know that they not only can but are “strongly encouraged” to go to you and report the harassment they experience or witness. Best Practice: Provide not only a contact person but also an alternate off-site person or office to whom tenants can report harassment in case the primary contact is the one who committed (or was otherwise involved in) the alleged harassment.

Safety Net: You also need to tell tenants to call 911, the police, or other emergency responder for help in an emergency, such as where the harassment poses a threat of violence or immediate bodily harm [Policy, Sec. 4].

Element #4: Assurance of Non-Retaliation

Tenants may be hesitant to come forward and report harassment out of fears of retaliation and being labeled a troublemaker—especially when the alleged harasser is a property manager or a powerful, longstanding, or influential tenant. And, while such retaliation is highly illegal, it still happens. Just ask Marsha Wetzel, the tenant that management plotted to get rid of after she complained of harassment. Of course, you’d never let this happen at your community. The problem is that fear and perception may be stronger than reality. That’s why your policy should include clear and strong language (which our Model Policy boldfaces) assuring tenants that they won’t suffer any form of retaliation for reporting harassment [Policy, Sec. 5].

TIME OUT!

Something to Consider: Qualified Retaliation Assurance

Some landlords worry that tenants will abuse their reporting rights to engage in witch hunts or file reports they know are false to harass or carry out a vendetta against tenants they don’t like. One thing you can do to prevent this is to qualify your non-retaliation assurance by indicating that it applies to harassment that tenants report “in good faith.” Because the language is so important to an anti-harassment policy, we chose to leave this qualifying phrase out of our Model Policy.

Don’t punish the victim. Evicting or relocating a tenant for reporting discriminatory harassment is illegal retaliation even when you do it for the tenant’s own protection. Your duty under fair housing laws, in other words, is to protect tenants from harassment without taking away their right to decide where they want to live.

Element #5: Harassment Response & Resolution Protocols

Be aware that in establishing a protocol for tenants to report harassment, you may be taking on additional compliance responsibilities. Explanation: Remember that for a landlord to be liable for tenant-on-tenant harassment, two things must be true:

• The landlord must know about the harassment (this is the Wetzel standard—the HUD regulations go farther by making landlords liable for harassment they should reasonably know about); and
• They must have the power to correct the problem.

The Wetzel standard thus gives you the option of deliberately avoiding knowledge of harassment and the accompanying duty to do something about it. (This ostrich head-in-the-sand strategy wouldn’t be available under the HUD “should reasonably know about” standard.) As a result, reporting creates extra responsibility because once tenants report it to you, you have knowledge of the harassment and must take steps to address it.

The heart of the policy, then, are the provisions explaining how you intend to address the harassment reported to you. Although there’s no one formula, your policy should provide for three layers of response to harassment complaints:

Level 1: Calling for Emergency Help. The first and most immediate concern is to call 911, law enforcement, or other emergency responders if there’s a risk of violence or other emergency. Hopefully, this is something tenants do themselves before reporting the harassment to you [Policy, Sec. 6(a)].

Level 2: Mediation and Conciliation. Being the landlord puts you in the position to intervene and resolve tenant-on-tenant harassment. The most effective way to leverage that position is to empower the tenants to resolve things themselves by acting as a neutral mediator or conciliator. Bring the parties together, listen to both sides of the story, seek common grounds of agreement, and suggest resolutions [Policy, Sec. 6(b)].

Level 3: Investigation. For mediation to work, both sides must be willing to work together in good faith to resolve their dispute. So, you need to have some other mechanism to deal with harassment complaints that mediation can’t resolve. At that point, the imperative becomes to determine exactly what happened and whether the harassment accusations are true. Accordingly, your policy should provide for a full, fast, and fair investigation. While procedures vary depending on the circumstances and situations, investigations should be carried out by a qualified and neutral investigator who isn’t involved in the disputes and is deemed impartial to both parties [Policy, Sec. 6(c)].

The policy should also include assurances that you’ll keep the investigation report and other personal information about the tenants involved confidential and not disclose it to third parties unless the laws allow or require you to do so [Policy, Sec. 6(d)]. In addition, you should describe the steps you’ll take to support tenants who suffer harassment. At a minimum, that should include providing victims with information about the medical, psychological, or other support services available; if feasible, you might also want to pay all or some of the costs for such services [Policy, Sec. 6(e)].

Element #6: Potential Discipline for Harassment Violations

Having an anti-harassment policy is worse than useless if you’re not prepared to hold tenants accountable for the harassment they commit. Such accountability should include reserving the right to discipline and even evict tenants found to have engaged in harassment, particularly when that harassment is based on the victim’s race, color, national origin, religion, sex, disability, familial status, or other protected class(es) under your state’s fair housing laws.

Accordingly, your policy should state that harassment is a “material” violation of the lease that may justify termination of the harasser’s tenancy. The good news is that your standard lease probably already includes provisions governing tenant conduct that you can rely on to enforce this rule, including the requirement that tenants (and other persons on the premises with tenants’ consent):

• Conduct themselves in a civil, respectful, and lawful manner at all times;
• Refrain from annoying, harassing, embarrassing, disturbing, inconveniencing, or harming other tenants or persons on the premises; and
• Not engage in acts of discrimination, nuisance, breach of the peace, or any other illegal activity.

Be careful how you word the disciplinary provisions. What you want to do is reserve the right to evict for a first offense; what you don’t want to do is require termination automatically and fail to leave yourself leeway to impose lesser discipline for less severe offenses and/or tenants you believe are capable of correcting their behavior [Policy, Sec. 7].  

Element #7: Clarification of Tenant’s Right to File a Fair Housing Complaint

Based on best practices and principles of employment discrimination law, anti-harassment policies should include clear language spelling out that victims of harassment based on race, color, national origin, religion, sex, disability, familial status, or other protected class(es) under your state’s fair housing laws have the right to file a fair housing discrimination complaint. Otherwise, victims may think that the anti-harassment policy is designed to substitute rather than supplement their fair housing protection rights [Policy, Sec. 8].