We were alarmed when we first read the Community Association Institute’s (CAI) blog post regarding a new Fair Housing Act rule that is effective as of October 14, 2016. Of particular concern was the following statement:

Under the rule, community associations may be liable under the Fair Housing Act for the discriminatory actions of residents who harass or create a hostile environment for other residents.

At first glance, this made little sense. Why would community associations be held to essentially the same standard of providing a hostile-free living environment similar to an employer who has to provide a hostile-free working environment, when a community association does not have the power to “fire”, i.e. evict a co-owner for discriminatory actions? And how can the Board be expected to observe everything that is happening?

As further described by CAI, the final rule specifies that community associations do not have a general duty to halt housing discrimination, but must take prompt action to halt housing discrimination when the association is required to by law or the governing documents; community associations are not required to take actions outside the scope of authority under law or the governing documents to halt housing discrimination (i.e., when they do not have the power to do something about it); and a “reasonable person” standard has been included to determine if or when a community association should have been aware of and acted to halt housing discrimination by third parties if required to do so by law or the governing documents.

So, what does all of this mean in the real world? For example, what if the governing documents provide, as many do, that a violation of a lease or the governing documents will result in the Board’s power to terminate the lease and evict a tenant? If a tenant engages in discriminatory or harassing conduct against other residents and evidence of that conduct is brought to the Board’s attention, it may be reasonable based on the circumstances to begin by issuing a warning as a means to stop the conduct. However, it can be argued that since the Board has the power to evict under the governing documents, the Board and/or association may be found liable under the new rule for not exercising the power to evict if the conduct is especially egregious or if it continues unabated after a warning.

Also, note the published guidance on the rule includes the following:

…the housing provider should notify the victim that [corrective] action was taken, and it is advisable for the housing provider to document this action in its records. Additionally, the housing provider should follow up with the victim of the harassment after the corrective action is taken to ensure that it was effective. If the housing provider knows or should have known that the corrective action was ineffective, the provider has a responsibility to take additional corrective actions within its power.

Given this new rule, community associations should consider adopting a Fair Housing Act compliance policy, which would (1) confirm the association’s dedication to compliance with the Fair Housing Act and commitment to taking all actions within its power to end discriminatory practices in a prompt matter upon discovery of same; and (2) outline the process for taking action when discrimination or harassment is brought to the Board’s attention, which might include different processes applicable to co-owners and tenants, based on the extent of the association’s power to take action with respect to each. It may also be a good idea for a speaker to make a statement at each annual meeting regarding the association’s dedication to compliance.

One thing is clear – it is now more important than ever to consult your community association attorney with respect to Fair Housing Act compliance. And we are interested in your thoughts on this new rule as well – please contact Robert Meisner at bmeisner@meisner-law.com.

By Mark Petrie, Legal Assistant, The Meisner Law Group