The Fair Housing Act and Civil Rights

Violations of the United States Fair Housing Act (FHA) can result in severe penalties for associations. Knowing how to govern your community responsibly in this regard is highly important. What is a common sense approach to staying in compliance with the FHA?

According to attorney David J. Byrne, there generally are two subsets to the FHA and community associations. “The first,” he said, “is in relation to an over fifty-five adult community, which is different than a regular community. These communities are allowed to discriminate on the basis of age and/or familial status, under certain circumstances. There are affirmative obligations on the part of those types of communities to keep certain records in order to preserve the exemption that they enjoy from the FHA.”

Byrne noted that the FHA makes any discrimination based on age and familial status illegal, but that’s exactly what an over fifty-five community does. “It’s allowed to continue to do that as long as it satisfies the law by keeping certain records of age, etc., and does additional things,” he explained.

The second subset is in relation to disabled people or people who claim to be disabled, Byrne said. When an owner or resident with a disability requests an accommodation (a modification of the rules) he/she feels is necessary to facilitate his or her use of the property, the most proactive approach the association could take, according to Byrne, would be to seek legal counsel. He said that an association should never say “no” to a request until it’s absolutely necessary and appropriate. “Under the law, until you say ‘no’ to an accommodation request, you can’t be guilty of having violated it,” Byrne explained. “This is true even if you’re taking the condition where you’re investigating the request, looking into it, asking for more information, etc.”

What are some problems with, pitfalls of, and penalties for non- compliance with the FHA? “The Act is pretty tough with respect to violations,” said Byrne. He noted that the act provides for the recovery of legal fees and penalties. This fact requires an association to be very careful and completely sure that it is making the correct decision before it says “no” to any request.

“The law provides for fee shifting, meaning that if you lose, you have to pay the other side’s attorney fees,” Byrne explained. “For the most part, it usually makes the most sense for an association to interpret its obligation broadly, with respect to requests because saying ‘no,’ and then having been ruled to have violated the law, will result in drastic consequences.”
Byrne said that, because of the fee shifting, penalties are harsh for an association. “Be careful and only say ‘no’ when you’re absolutely sure that a win is likely if a person brings an action against you,” Byrne said.

Associations in New York must also be mindful of New York’s Human Rights Law (“HRL”). The HRL is focused on many aspects of society, including residential real estate. It is also concerned with many personal conditions and/or attributes, such as race, color, gender identity, military status, disability and familial status. The HRL makes it illegal to “refuse to sell, rent, lease or otherwise deny to or withhold” a “housing accommodation” for certain reasons. The HRL defines “Housing Accommodation” as any building “or portion thereof which is used or occupied” as “the home, residence or sleeping place of one or more human beings.”

As Byrne said, the Department of Housing and Urban Development (HUD) is responsible for enforcing the aspects of the FHA related to associations. He explained that each state has its own enforcement mechanism as well. “The HUD operation functions across the country, but in most states, a state-employed investigator is assigned to the individual cases. People will complain to HUD about a particular practice they believe violates the FHA, and then HUD will either investigate it or send it to the applicable state asking the state to investigate it,” Byrne said.

What are some civil rights, and how do they apply to associations? The FHA makes it illegal for an association to discriminate in certain fashions in the provision of services, Byrne said. An association must be aware of the FHA’s classes and those referenced in the HRL.

Could FHA violations be considered civil violations or criminal penalties? Byrne stated that FHA violations are considered civil violations, not criminal.

What constitutes problematic wording in a covenant or rule made up by the association? “The most problematic,” said Byrne, “would be rules or covenants that on their face discriminate against folks on the basis of one of the prohibited classes.”

He noted that in and of itself, one’s act of discrimination is not necessarily illegal. People discriminate all the time, he said. For example, we discriminate when we purchase one type of car over another or hire one person instead of another.

“As long as you discriminate in a way that’s not illegal, there’s no problem with it. If you are creating rules or have covenants that are based on, or reference, some of those particular things, then you’ve got trouble,” Byrne explained.

For example, he said that a clear example of a violation would be a rule that prohibits children from riding the elevator.

What is discrimination based on protected classes? Illegal discrimination would be an association’s actions that discriminate on the basis of one of the identified classes, such as race, Byrne said. For example, an association can regulate a lounge in regard to use, but not in regard to the type of person using it. A rule that prohibits families with children from using the lounge would be illegal discrimination based on age and familial status unless this lounge is part of an “over-55” type of community.

What are considered reasonable accommodations for people with disabilities? Generally, it is unlawful for an association to refuse to permit, at the expense of the disabled person, reasonable modifications of premises. Additionally, generally, it is unlawful for an association to refuse to make reasonable accommodations in rules, policies, practices or services, when rail accommodations may be necessary to afford the disabled person an equal opportunity to use and enjoy a dwelling. “In the end,” said Byrne, “it depends on the facts.” For example, is it a reasonable request for a wounded war veteran to seek a ramp added to his town home? “Probably,” Byrne said. However, if an engineer opines that the desired ramp would not be safe, that same request might not be reasonable.

“Each situation should be taken on its own. Be mindful that the law is set up to punish you if you’re wrong, so you should probably err on the side of granting the request,” Byrne explained. “You know, often the safest course of action is to follow the simple creeds of kindness, empathy, and class. Laws like the FHA are designed to reflect that.”

Is religion a potential legal concern in the area of civil rights? “Yes, religion is part of the equation,” said Byrne.

How are religious displays treated in the FHA? Byrne said that they are treated the same way as any other matter related to reasonable accommodations. “Religious displays,” he added, “are also governed by state laws in connection with free speech considerations. Many states believe that, despite the fact that these are private situations, there are some free speech considerations involved.”

Can associations prohibit religious services in common areas? According to Byrne, an association may have to decide whether that regulation is reasonable under the circumstances. “Ultimately, the association should handle it just like anyone else who’s using the common area. The focus shouldn’t be on the type of assembly,” said Byrne. When it comes to expression, Byrne said, time, place, and manner must be the focus.

Can an association prevent a sex offender from renting a unit? “It’s really difficult for an association to prevent anybody from renting anything,” Byrne said. Individuals decide how they handle their private homes, including to whom they rent, he said.

He added that, if a community amends its bylaws to provide for the association having more of a stake or interest in the rental of units, perhaps there would be some right. However, owners often realize that such a restriction affects the marketability and value of their units.

Are associations allowed to have any bias for or against families with children? “Those types of rules violate the FHA,” said Byrne, “unless connected with over-55, or similar, type of community.” He said that rules should be based on conduct. As an example, Byrne said, if the community has a gym, children should not be barred. Instead, rules should prohibit the type of conduct that people typically associate with children.

Is an association required to allow residents to keep animals if they have a prescription from their doctor for a comfort or service animal? “It depends on the situation. The statute doesn’t expressly address that,” said Byrne. “The statute empowers folks to do what they can to have equal use of the home in question. Those are really difficult to address, and they really have to be handled on a case-by-case basis,” he explained. A “disabled resident will, naturally, contend that a particular animal is necessary for that resident to enjoy an equal use and enjoyment of the dwelling,” according to Byrne.

Can an association question a resident about the prescription or medical note for that animal? According to Byrne, the association can indeed question a resident about the prescription or medical note.

What is the difference between a comfort animal and a service animal? “A service animal provides a service,” said Byrne. He added that a service animal performs a tangible service for a person with a disability, such as someone who is deaf or blind. On the other hand, a comfort animal’s purpose is to make someone feel better. “A comfort animal doesn’t necessarily connect with the use of the property or the ability to actually physically function,” he explained.

Can associations restrict the size of these animals? “It depends on the circumstance,” Byrne said. For example, an owner’s guide dog might be a certain height, and the association may need to allow it. “You can’t make that decision in a vacuum,” noted Byrne. Again, much of these decisions must be made on a case-by-case basis.

Does the Americans with Disabilities Act (ADA) affect how an association makes up its rules for service animals? The Americans with Disabilities Act does not apply to this type of situation, Byrne said. Instead, he explained, the ADA applies to public accommodations and physical existence, i.e. whether or not an association is required to modify a doorway, stairwell, etc.

Can an association ever restrict the areas where the comfort or service animals are allowed? Byrne said that placing restrictions on the areas where the comfort or service animals are allowed depends on the situation. He also said that limiting the number of comfort or service animals a resident can have depends on the situation.

Is it common or even permissible for associations to require that the animals are photographed when they are first brought onto the property? “It may be. Absent of the issue of disability, the board’s rule-making is subject to general reasonable analysis,” said Byrne. He then posed the question that if, for instance, a disabled person’s service animal won’t sit for a picture, does the association then prevent that person from having the animal? Associations must handle each case with care, erring on the side of caution when making decisions.

What is a transition? According to attorney David J. Byrne, there are two types of transitions. The first, he said, is transition of control. The transition of control is when the control of a community’s board of managers is transferred from the sponsor to the owners other than the sponsor during the sales process. Generally, transitions of control relates to and/or depend upon the percent of sales having taken place.

The second, Byrne said, is the transition to responsibility, connected with the common property, or common elements. “During that period of time, the association should evaluate the nature of the construction, the propriety of the sponsor’s board’s management and a variety of other things,” he explained, “for the purpose of determining whether the sponsor complied with all the applicable standards, rules and plans before the association takes on full responsibility for the common elements.”

What should an association do if any construction defects or problems are found? “For the most part, you present the nature of the defects to the declarant, assuming the declarant is still in business, which is not always the case, and see what that developer says,” said Byrne. Depending upon a variety of factors such as state law as a developer disclosures structural defects in the common elements may be warrantied for a certain number of years. Structural defects in each unit may be warrantied for a certain number of years after purchase. The law may define “structural defects” and may set forth when those periods begin to run. “In the event the declarant is not in business, or the defects are of such a substantial nature that providing reports to the declarant would be futile, the association should probably file a lawsuit,” he noted.

Byrne added that oftentimes when an association facing construction defects is not working with one of the larger development companies, its recourse may not necessarily come from the developer itself or the contractors the developer used. “Instead, it may come from insurance carriers through insurance policies that were taken out and maintained by the developer and the contractors during the course of construction,” he explained. Byrne said this is important for associations to be aware of, especially if they are dealing with particularly bad defects.

Can anything be done by the board before the actual transition date? “Not legally,” said Byrne. “Legally, until such time as a majority of the board consists of owners, the enforceability of anything that board does regarding defects is questionable.”

Is there ever a situation where a sponsor will pay expenses out of its own pocket to keep assessments artificially low? “That’s pretty much what a developer will always do,” said Byrne.

Do homeowners have the right to inspect a sponsor’s financial records? According to Byrne, the answer is no. However, he added, developers “are required to file certain things with the state in connection with approvals to build and sell condominiums and homes. Those records are presumably available to the public.” Additionally, sponsors must keep certain records during their control. During its control of the board of managers, the association (controlled by the sponsor) must keep detailed financial records, to a point. These records must include expenses that were paid by the sponsor up until the association begins its common charges. During sponsor control, additional detailed financial records must be made and kept.

If the sponsor enters into a contract on behalf of the association, what happens after the transition? Is the association responsible in this case? “It depends with whom the contract is made and on the relationship that entity may have with the sponsor. It would really have to be addressed on a case-by-case basis,” Byrne noted.

Additionally, in New York, the Martin Act (Martin) created a mechanism by which owners are exclusively required to seek redress, exclusively, with New York’s Attorney General, in regards to any allegations related to an offering plan. “For instance,” Byrne says, “an association alleging a sponsor breach of warranty or alleging an offering plan misrepresentation must seek redress, only, via plea to the New York Attorney General.”