Fair Housing Compliance - What are You Doing?

Question

Apparently someone felt my post the other day was too political and it was removed. That does not change the fact that both retailers and community owners seriously need to address the changes in all of the Fair Housing interpretations.

At my urging as the Chairman of the Illinois Manufactured Housing Association (at the time) the association put on a day long educational and certification program for attendees at the association annual meeting last May. Over 100 people attended that meeting, but, that left over 1000 people who should have been there, but were not. The situation is likely the same all over the country.

The person objecting to my original post raised the point that one of the examples of organizations fined was for a very large apartment complex accepting government money. All of that is true, but there are many smaller manufactured housing groups that have also been hit with fines and penalties.

No one can afford to hide their head in the sand on these issues and that was the message I was trying convey.

So what are you doing to make sure your operation is legal and compliant?

Denise Evans · Answer

There is a Fair Housing regulation that says if you hire a 3rd party to conduct fair housing testing on you, the fact of the testing, and the results, are absolutely privileged. There is nothing in the law that says an attorney has to do it. The privilege comes about because of the Fair Housing laws, not because of the attorney client privilege.

The most frequent reasons for Fair Housing complaints can be found on the Internet. You might want to talk to a local trade association (or create one for that purpose) to do the testing and write up a short report with the results. This is not complicated stuff.

I don't have a product for sample testing and reports (under my Butler Evans Education website) but I bet if there were enough demand, I could create something for around $400 to $500, that could be administered by a trade association or even a small group of investors who test each other.  Do you think the demand is there?

Thomas S. · Answer

We have the same human rights in Canada regarding housing only ours are probably more restrictive.

Many laws are crippling to investor/landlords as they place the rights of one individual ahead of the rights of another individuals right to protect their business interests.

When forced to take on a high risk tenant that places all tenants of that landlord at risk.

I have learned ways around allowing the government to force me to place my tenants and business at risk by paying closer attention to my screening practices.

Knowledge is the key to legally working with or around unfavorable government interference. All rules have bend prior to breaking but this is not a business tactic for the ill informed.

Uneducated landlords are forced to accept tenants out of fear.

Jeff B. · Answer

Your concern is certainly well founded, however , the cited reference:

FHR is found at the ECFR Gov Publishing Office site.  is an official statement of HUD - - you're yelling into a hurricane.  BTW, Fair Lending is not Fair Housing regs which I was referring to.

Bill Gulley · Answer

@Denise Evans if you build it they will come, but most here have no clue about Fair Housing issues, most are looking for lease agreements........after all, real estate is so easy, anyone can do it, if they only knew what to do. :)

Ken Rishel · Answer

Bill - I'm hearing attorney fees for putting together just a couple of components of a Fair Housing CMS running $8-$25,000 depending on the size of the operation.

Bill Gulley · Answer

My guess is that owners go to their attorney who will charge them a few grand to investigate, interview, establish findings and any defense if needed, if they don't have a compliance program they are probably caught with their pants down in a reaction mode with a checkbook at the ready......just a guess. :)

Jeff B. · Answer

A M E N on that;  All that HYPE on Taking Action is so dangerous.

Ken Rishel · Answer

Jeff - I was not meaning to pick on you. The examples I cited actually came from a featured blog post on BP. The material you are sharing is official, but often to difficult for most people to fully follow or interpret. I worry about all the people looking so hard for a cheap solution that they end up in trouble without ever seeing it coming.

Ken Rishel · Answer

Again, I need to warn that even if you read it on Bigger Pockets, the information can be misleading or incorrect, or difficult to interpret by someone not a regulatory attorney or versed in regulatory law. Here is an example of what I mean from a BP article on Fair Lending:

What you can do as a housing provider is request proof of need. A true emotional support animal has been prescribed by a physician or therapist, who will be happy to provide a letter stating such. You have the right to request documentation, and you should request it to prove that you aren’t discriminating against other tenants who want pets. In the conclusion of the article it stated: A true emotional support animal has been prescribed by a physician, and a letter should be easy to provide.

The underlined portion (my underlining) would suggest that as a landlord you can request supporting documentation from a professional. This is inaccurate. The rule interpretation refers to a responsible person, whatever that is, as an acceptable alternative for documentation. (The interpretation actually offers several acceptable sources.)

Now: What happens if a reader interprets the original statement to mean they can demand that the requesting party supply a prescription for an assistance animal from only an MD or a Psychologist? That would be a violation.

Here is another example from the same piece:

So let’s take a look at a hypothetical situation. You have a 3-story building with stairs leading to the front door. The tenant wants you to allow them to build a ramp so they can get into the building. This is a reasonable request. The tenant wants you to install an elevator so they can live on the third floor. This is not a reasonable request.

Now, to me, as a property owner, what was just written seems very reasonable. However I also must recognize I need to have some protection against lawsuits from prospective tenants that don't share my definition of reasonable. Further, what actions should I take to protect myself if a long term tenant can no longer safely navigate those three flights of stairs because their physical condition changed. What happens if a previous owner's mother lived in the building and special accommodations were made for her ( a chair life perhaps) that became unnecessary when I bought the building and I chose to no longer maintain and a long term tenant now needs such a device? Am I in trouble?

How are someone using the internet as a source going to defend their actions in court? Are they going to contend they were making a required "best effort" at compliance by reading it on an internet forum for free? I can't imagine any judge accepting that as a method of minimizing or mitigating any punitive relief.

Protection from regulators and private law suits when the topic is Fair Housing means a formal and professional compliance management system done by recognized authorities.

Ken Rishel · Answer

A Correction from my prior post:

I wrote: If any trade group were going to do it, it might be the Urban Land Institute which costs over $10,000 per year just to belong to plus a sizable initiation fee.

Apparently, the number I quoted is based on the checks written to ULI which covered a group membership rather than an individual membership. Individual memberships are currently: $1,220.00 per year. There are also considerable fees involved to attend the various conferences and meetings.

Fair Housing Compliance - What are You Doing?

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