Michigan Real Estate Education and Licensing (www.123ConEd.com and www.1StopConEd.com)): February 2009

Friday, February 27, 2009

A Few Exceptions to the Fair Housing Act

The Fair Housing Act applies to all housing transactions (unless exempted by law, see below). Courts have applied the Act to individuals, corporations, associations and others involved in the provision of housing and residential lending, including property owners, housing managers, homeowners and condominium associations, lenders, real estate agents, and brokerage services. Courts have also applied the Act to state and local governments, most often in the context of exclusionary zoning or other land-use decisions.

Most types of housing properties are covered – leased or rented apartments; houses or condominiums that are sold, leased or rented; rooming houses; cooperatives; temporary shelters; mobile home parks; construction sites; and even empty lots. If you are uncertain whether a property is covered, contact any local fair housing agency and ask.

There are a few specific exceptions to the Fair Housing Act. The Act does not apply to:

A religious organization may give preference to persons of the same religion (unless restricted on account of race, color or national origin) in non-commercial transactions;

A private club may provide lodgings for members in non-commercial transactions;

An owner who owns four units or less and lives in one unit;

A private individual owner who does not own more than three single family houses, if the owner does not use the services of a broker, and if the owner does not use discriminatory advertising, and if the owner has not participated in three or more rental or sales transactions in a one year period;

Housing for elders may exclude families with children. For example, housing may be designated for people ages 62 years or older only. Also housing that serves people age 55 and older, where 80% of the housing is occupied by at least one person who is 55 or older, is exempt

In addition, the Fair Housing Act does not protect juvenile offenders, sex offenders, persons who illegally use controlled substances, and persons with disabilities who pose a significant danger to others. For more information about that topic, please see previous blog posting.

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To learn more about Fair Housing issues in Michigan (and many other topics affecting Michigan real estate professionals), please visit us at www.123ConEd.com. 123 ConEd LLC (www.123ConEd.com) is a leading online provider of continuing education courses to real estate professionals in Michigan. Our online Michigan real estate con ed courses are fully approved and properly certified by the Michigan Department of Labor & Economic Growth. All of our courses are designed to offer our students the most information, as quickly and economically as possible.

The Fair Housing Act Does Not Protect . . .

As every real estate professional should already know, the Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability.

What many agents tend to forget, however, is that the Act does not protect juvenile offenders, sex offenders, persons who illegally use controlled substances, and persons with disabilities who pose a significant danger to others.

Juvenile offenders and sex offenders, by virtue of that status, are not persons with disabilities protected by the Fair Housing Act. Similarly, while the Act does protect persons who are recovering from substance abuse, it does not protect persons who are currently engaging in the current illegal use of controlled substances.

Additionally, the Act does not protect an individual with a disability whose tenancy would constitute a “direct threat” to the health or safety of other individuals or result in substantial physical damage to the property of others unless the threat can be eliminated or significantly reduced by reasonable accommodation. For more complete information about what constitutes a "direct threat" under the Act, please see my previous blog posting on that topic.

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$1 Million Judgment in Sexual Harassment Case Against Cincinnati Landlord

Here is another example of a Fair Housing Act lawsuit that was fairly recently settled by the United States Department of Justice ("DOJ"). I try to post summaries of these types of cases in order to provide updates to real estate professionals about the "dos and don'ts" under the Fair Housing Act, since fair housing is such an important issue.

In September 2008, the DOJ settled a fair housing lawsuit that was brought again a Cincinnati landlord, James G. Mitchell, and his company, Land Baron Enterprises. Mr. Mitchell was the owner and operator of several rental properties in the Cincinnati, Ohio, metropolitan area. The defendants agreed to pay $1 million in monetary damages and a civil penalty, after admitting that they violated the Fair Housing Act. This was the largest monetary settlement that the DOJ has ever obtained in a case alleging sexual harassment violations under the Fair Housing Act.

The DOJ’s lawsuit alleged that Mr. Mitchell had subjected female tenants to unwanted verbal sexual advances and unwanted sexual touching, entered the apartments of female tenants without permission or notice, granted and denied tangible housing benefits based on sex, and took adverse action against female tenants when they refused or objected to his sexual advances.

The DOJ began investigating Mr. Mitchell after Housing Opportunities Made Equal (“HOME”), a Cincinnati-based non-profit fair housing advocacy group, notified the DOJ of several sexual harassment complaints it had received about Mr. Mitchell.

Under the terms of the settlement, the defendants were required to pay $890,000 in compensation to 12 women who Mr. Mitchell sexually harassed and $110,000 in a civil penalty to the United States. In addition, the settlement enjoined Mr. Mitchell from further discrimination and required him to retain an independent management company to manage any future rental properties he acquires. Mr. Mitchell currently does not own or operate any rental properties.

Every real estate professional should already know that the Fair Housing Act makes it unlawful to discriminate in housing on the basis of sex. What many real estate professionals do not realize, however, is that that includes sexual harassment.

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To learn more about Fair Housing issues (and many other topics affecting Michigan real estate professionals), please visit us at www.123ConEd.com. 123 ConEd LLC (www.123ConEd.com) is a leading online provider of continuing education courses to real estate professionals in Michigan. Our online Michigan real estate con ed courses are fully approved and properly certified by the Michigan Department of Labor & Economic Growth. All of our courses are designed to offer our students the most information, as quickly and economically as possible.

U.S. Department of Justice Sued the Housing Authority in Wayne County, Illinois, for Race Discrimination in Violation of the Fair Housing Act

Here is another example of a lawsuit that was recently filed by the United States Department of Justice ("DOJ") to enforce the Fair Housing Act. I try to post summaries of these types of cases in order to provide timely updates to real estate professionals about the "dos and don'ts" under the Fair Housing Act, since fair housing is such an important issue.

Yesterday afternoon (Monday, February 23, 2009), the DOJ filed a lawsuit against the Wayne County Housing Authority (“WCHA”) (located in Fairfield, Illinois), as well as against Jill Masterson and Danna Sutton, WCHA’s executive director and assistant director, respectively, alleging that they violated the Fair Housing Act when they tried to discourage a white couple from renting their property in Fairfield to an African-American woman.

The DOJ’s complaint alleges that the defendants discriminated against a white couple who were planning to rent a house to an African-American woman through the Housing Choice Voucher program (also known as Section 8). The Housing Choice Voucher program provides rental assistance to eligible low-income families, the elderly and persons with disabilities. Wayne County, Illinois, receives federal funding from the United States Department of Housing and Urban Development (“HUD”) to administer the Housing Choice Voucher program.

The complaint further alleges that the defendants made racially discriminatory statements to the couple and "failed" their property at the mandatory inspection, which required the couple to make certain repairs and be inspected again before they could rent their unit under the Housing Choice Voucher program.

By contrast, the lawsuit alleges that when the WCHA found similar deficiencies at other properties in the Housing Choice Voucher program, its practice had been to "pass" the property and verbally counsel the landlords to make the repairs. The DOJ’s complaint alleges that the defendants took these actions to discourage the couple from renting the property to the African-American woman. The complaint also alleges that the defendants determined that the property would have to be re-inspected because the couple had complained about racially discriminatory comments allegedly made by Ms. Sutton.

The lawsuit originated from a complaint filed with HUD by the couple. After an investigation, HUD found reasonable cause to believe that unlawful discrimination had occurred and referred the matter to the DOJ, who filed the Fair Housing Act lawsuit. The lawsuit filed by the DOJ is an allegation of unlawful conduct, and the allegations must still be proven in court.

The lawsuit seeks monetary damages for the couple and a court order barring future discrimination. This case is currently pending in the United States District Court for the Southern District of Illinois.

As every real estate professional should know, it is illegal to engage in racially discriminatory housing practices. Public housing authorities are no execption to this rule. Remember that the Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability.

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$62,000 Settlement in Fair Housing Disability Discrimination Case Against Apartment Complex for Refusing to Allow Residents to Keep Service Dogs

On May 29, 2008, the United States Department of Justice ("DOJ") settled a fair housing disability discrimination case for $62,000 that was brought against an apartment complex and the on-site manager for refusing to allow residents to keep service dogs. United States v. Stealth Investments LLC; BMT Investments LLC; and Steven Barry Woodhouse, No. 4:07-cv-500, filed in the United States District Court for the Idaho (consent order dated May 29, 2008).

On May 29, 2008, the federal court entered a consent decree that settled this fair housing disability discrimination case brought by the DOJ against an apartment complex and its on-site property manager. The complaint alleged that the defendants engaged in housing practices that discriminated on the basis of disability, including refusing to allow residents with disabilities to keep service dogs at Shadow Canyon Apartments, which was a 77-unit apartment complex located in Idaho Falls, Idaho.

The DOJ'’s lawsuit alleged the following facts. On August 9, 2006, in response to a complaint, a local fair housing agency conducted a telephone test for housing discrimination based on disability at Shadow Canyon Apartments. Testing is a simulation of a housing transaction that compares responses given by housing providers to different types of home-seekers in order to determine whether or not illegal discrimination is occurring.

The local fair housing agency tester called Shadow Canyon Apartments and spoke to Mr. Woodhouse, who was the on-site apartment manager. The tester, who posed as a social worker, informed Mr. Woodhouse that she was inquiring on behalf of a prospective renter who used a wheelchair, about whether there were any one or two bedroom apartments available. Mr. Woodhouse confirmed that both unit types were available and quoted rental rates.

The tester then told Mr. Woodhouse that the prospective renter had a “service dog” and asked about Shadow Canyon Apartment’s procedures. Mr. Woodhouse replied, “We absolutely do not allow dogs. They’re going to have to find somebody else. Even if it’s service, we won’t allow dogs.” When the tester mentioned that the prospective renter had a prescription for the service dog because of his disability, Mr. Woodhouse responded that the prospective renter “might as well just find a different place.”

Mr. Woodhouse then informed the tester that it was Shadow Canyon Apartments' policy to allow service cats but “absolutely no dogs,” adding, “We can regulate the type of pet, service pet allowed.”

The tester then explained that the service dog assisted the prospective renter by helping him move his wheelchair. In reply, Mr. Woodhouse again told the tester that the prospective renter should “find somewhere else to stay,” adding, “[t]here’s lots of other places that accept them.” The tester asked if it was possible for the prospective renter to pay extra money or do anything else to have a service dog, and Mr. Woodhouse responded, “No.” Mr. Woodhouse stated, “The owners are just absolutely downright strict about no dogs.”

On October 27, 2006, the local fair housing agency filed a complaint of discrimination HUD alleging that the defendants discriminated on the basis of disability in violation of the Fair Housing Act. The complainant elected to have the charge resolved in a federal civil action, so the DOJ filed a lawsuit.

Under the terms of the settlement, the defendants were required to pay $24,500 to compensate victims of discrimination at Shadow Canyon Apartments, establish a $12,500 victim fund, and pay a $25,000 civil penalty to the United States. Additionally, the defendants were required to establish and follow non-discriminatory procedures and undergo fair housing training.

This case is yet another example of a blatant violation of fair housing laws. Every real estate professional needs to remember that a service animal is not a "pet." Various fair housing laws require housing providers to modify their "no pets" policy to allow the use of a service animal by a person with a disability. This does not mean the housing provider must abandon its "no pets" policy altogether, but simply that it must make an exception to its general rule for service animals.

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A Housing Provider Can't Charge an Extra Fee or Require an Additional Deposit as a Condition of Granting a Reasonable Accommodation

Under the Fair Housing Act, housing providers may not require persons with disabilities to pay extra fees or deposits as a condition of receiving a reasonable accommodation.

Example 1: A man who is substantially limited in his ability to walk uses a motorized scooter for mobility purposes. He applies to live in an assisted living facility that has a policy prohibiting the use of motorized vehicles in buildings and elsewhere on the premises. It would be a reasonable accommodation for the facility to make an exception to this policy to permit the man to use his motorized scooter on the premises for mobility purposes. Since allowing the man to use his scooter in the buildings and elsewhere on the premises is a reasonable accommodation, the facility may not condition his use of the scooter on payment of a fee or deposit or on a requirement that he obtain liability insurance relating to the use of the scooter. However, since the Fair Housing Act does not protect any person with a disability who poses a direct threat to the person or property of others, the man must operate his motorized scooter in a responsible manner that does not pose a significant risk to the safety of other persons and does not cause damage to other persons’ property. If the individual’s use of the scooter causes damage to his unit or the common areas, the housing provider may charge him for the cost of repairing the damage (or deduct it from the standard security deposit imposed on all tenants), if it is the provider’s practice to assess tenants for any damage they cause to the premises.

Example 2: Because of his disability, an applicant with a hearing impairment needs to keep an assistance animal in his unit as a reasonable accommodation. The housing provider may not require the applicant to pay a fee or a security deposit as a condition of allowing the applicant to keep the assistance animal. However, if a tenant’s assistance animal causes damage to the applicant’s unit or the common areas of the dwelling, the housing provider may charge the tenant for the cost of repairing the damage (or deduct it from the standard security deposit imposed on all tenants), if it is the provider’s practice to assess tenants for any damage they cause to the premises.

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When and How an Individual Needs to Request a Reasonable Accommodation or Permission to Make a Reasonable Modification under the Fair Housing Act

Under the Fair Housing Act, a resident or an applicant for housing makes a reasonable accommodation request whenever she makes clear to the housing provider that she is requesting an exception, change, or adjustment to a rule, policy, practice, or service because of her disability. She should explain what type of accommodation she is requesting and, if the need for the accommodation is not readily apparent or not known to the provider, explain the relationship between the requested accommodation and her disability.

Similarly, a resident or an applicant for housing makes a reasonable modification request whenever she makes clear to the housing provider that she is requesting permission to make a structural change to the premises because of her disability. She should explain that she has a disability, if not readily apparent or not known to the housing provider, the type of modification she is requesting, and the relationship between the requested modification and her disability.

An applicant or resident is not entitled to receive a reasonable accommodation or modification unless she requests one. However, the Fair Housing Act does not require that a request be made in a particular manner or at a particular time. A person with a disability need not personally make the reasonable accommodation request; the request can be made by a family member or someone else who is acting on her behalf. An individual making a reasonable accommodation or modification request does not need to mention the Act or use the words “reasonable accommodation” or “reasonable modification.” However, the requester must make the request in a manner that a reasonable person would understand to be a request for an exception, change, or adjustment to a rule, policy, practice, or service because of a disability or that a reasonable person would understand to be a request for permission to make a structural change because of a disability.

Although a reasonable accommodation or modification request can be made orally or in writing, it is usually helpful for both the resident and the housing provider if the request is made in writing. This will help prevent misunderstandings regarding what is being requested, or whether the request was made. To facilitate the processing and consideration of the request, residents or prospective residents may wish to check with a housing provider in advance to determine if the provider has a preference regarding the manner in which the request is made. However, housing providers must give appropriate consideration to reasonable accommodation and modification requests even if the requester makes the request orally or does not use the provider’s preferred forms or procedures for making such requests.

Here is an example: A tenant in a large apartment building makes an oral request that she be assigned a mailbox in a location that she can easily access because of a physical disability that limits her ability to reach and bend. The housing provider would prefer that the tenant make the accommodation request on a pre-printed form, but the tenant fails to complete the form. The provider must consider the reasonable accommodation request even though the tenant would not use the provider’s designated form.

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Types of Information (If Any) a Housing Provider May Request from a Person with an Obvious or Known Disability

A housing provider is entitled to obtain information that is necessary to evaluate whether a requested reasonable accommodation or reasonable modification may be necessary because of a disability. If a person’s disability is obvious, or otherwise known to the housing provider, and if the need for the requested accommodation or modification is also readily apparent or known, then the housing provider may not request any additional information about the requester’s disability or the disability-related need for the accommodation or modification.

If the requester’s disability is known or readily apparent to the housing provider, but the need for the accommodation or modification is not readily apparent or known, the provider may request only information that is necessary to evaluate the disability-related need for the accommodation or modification.

Do not ever ask for specific information about the disability or for medical records!That is a sure way to get into trouble!

Here are a few examples:

Example 1: An applicant with an obvious mobility impairment who regularly uses a walker to move around asks her housing provider to assign her a parking space near the entrance to the building instead of a space located in another part of the parking lot. Since the physical disability (i.e., difficulty walking) and the disability-related need for the requested accommodation are both readily apparent, the provider may not require the applicant to provide any additional information about her disability or the need for the requested accommodation.

Example 2: A rental applicant who uses a wheelchair advises a housing provider that he wishes to keep an assistance dog in his unit even though the provider has a “no pets” policy. The applicant’s disability is readily apparent but the need for an assistance animal is not obvious to the provider. The housing provider may ask the applicant to provide information about the disability-related need for the dog.

Example 3: An applicant with an obvious vision impairment requests that the leasing agent provide assistance to her in filling out the rental application form as a reasonable accommodation because of her disability. The housing provider may not require the applicant to document the existence of her vision impairment.

Example 4: An applicant with an obvious mobility impairment who uses a motorized scooter to move around asks the housing provider to permit her to install a ramp at the entrance of the apartment building. Since the physical disability (i.e., difficulty walking) and the disability-related need for the requested modification are both readily apparent, the provider may not require the applicant to provide any additional information about her disability or the need for the requested modification.

Example 5: A deaf tenant asks his housing provider to allow him to install extra electrical lines and a cable line so the tenant can use computer equipment that helps him communicate with others. If the tenant’s disability is known, the housing provider may not require him to document his disability; however, since the need for the electrical and cable lines may not be apparent, the housing provider may request information that is necessary to support the disability-related need for the requested modification.

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Assigning a Parking Space Can Be Considered a Reasonable Accommodation under the Fair Housing Act

If someone disabled asks a housing provider to create or designate a parking space for them, generally the law is going to require the housing provider to create or designate the space if three conditions are met: (1) the resident must ask for a designated space; (2) creating or designating the parking space would allow the disabled resident to live in and fully enjoy the premises; and (3) creating or designating the parking space would not create an undue financial or administrative burden for the housing provider.

In processing a parking space request from someone who is disabled, the housing provider is entitled to ask for medical evidence that proves the resident has a disability. This does not give a housing provider the right to ask about the nature of the resident’s disability, but it does give them the right to ask for proof of their disability. Acceptable proof would be handicapped vehicle identification plates or tags or a letter from the resident’s doctor, chiropractor or social worker. Once the resident provides proof, the housing provider has a duty to provide the parking space. And if more than one disabled resident asks for a parking space, the housing provider will have a duty to accommodate each request.

Here is an example. Oakwood Estates is a 300 unit apartment complex with 450 parking spaces, which are available to tenants and guests of Oakwood Estates on a “first come first served” basis (the complex does not provide assigned/reserved parking spaces). John Smith applies for housing in Oakwood Estates. Mr. Smith is mobility impaired and is unable to walk more than a short distance and therefore requests that a parking space near his unit be reserved for him so that he will not have to walk very far to get to his apartment. It is a violation of the law for the owner or manager of Oakwood Estates to refuse to make this accommodation. Without a reserved space, Mr. Smith might be unable to live in Oakwood Estates at all or, when he has to park in a space far from his unit, might have great difficulty getting from his car to his apartment unit. The accommodation therefore is necessary to afford Mr. Smith an equal opportunity to use and enjoy the dwelling. The accommodation is feasible and practical under the circumstances, and it would be a required "reasonable accommodation" under the Fair Housing Act.

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$120,000 Settlement in Discrimination Lawsuit against Chicago Area Realtors (Resulted from Use of Fair Housing Testers)

I was in the process of updating the online fair housing continuing education courses offered by my school (www.123ConEd.com), when I came across this Fair Housing Act case that was just settled eleven days ago (February 17, 2009). Because fair housing is such an important topic, I thought that I'd post a summary of this case.

On February 17, 2009, the United States Department of Justice (“DOJ”) settled a fair housing steering case brought against RE/MAX East-West, a real estate firm in Elmhurst, Ill., and one of its former real estate agents, John DeJohn. The defendants agreed to pay $120,000 to settle allegations that they had illegally steered prospective home buyers towards and away from certain neighborhoods based on race and national origin.

The lawsuit originated from a complaint filed by the National Fair Housing Alliance (“NFHA”) with the United States Department of Housing and Urban Development (“HUD”). Testing conducted by NFHA of RE/MAX East-West in 2004 and 2005 revealed that Mr. DeJohn had steered an Hispanic tester towards homes in predominantly African-American or Hispanic neighborhoods, but had encouraged a similarly situated white tester to look at listings in predominantly white neighborhoods. Both testers had contacted Mr. DeJohn about the same advertised listing. According to the DOJ’s complaint, Mr. DeJohn also told the white tester, "I don’t care if you are a bigot. If we go to an area and you don’t like it, just let me know. I can’t be a bigot but you can be one," or words to that effect. After an investigation, HUD found reasonable cause to believe that unlawful discrimination had occurred and referred the matter to the DOJ, which filed a lawsuit in federal court on July 18, 2008.

The settlement requires the defendants to pay $120,000 to the NFHA. The settlement also requires RE/MAX East-West to hire a qualified organization to provide fair housing training to its agents and to maintain records and submit periodic reports to the DOJ. Mr. DeJohn is no longer working as a real estate agent and his Illinois real estate license expires in April 2009. However, the settlement requires Mr. DeJohn to comply with similar training and reporting requirements if he decides to become a real estate agent again in Illinois or any other state.

The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. Unlawful steering by real estate agents frustrates the rights of people to make fully informed housing choices and perpetuates segregated housing patterns. This case make clear that real estate companies and their agents who steer buyers to different neighborhoods based on race or nationality have violated the Fair Housing Act and can be held liable for large monetary fines. The elimination of racial steering was a principal goal of the Fair Housing Act, when it was signed into law in 1968.

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$40,000 Settlement against Managers and Owners of Apartment Complex Who Failed to Reasonably Accommodate Autistic Child

I was in the process of updating the online fair housing continuing education courses offered by my school (www.123ConEd.com), when I came across this Fair Housing Act case.

In United States Department of Housing and Urban Development v. Princeton Property Management, Inc., and Masters Loop, LLC, HUD No. 08-068 (settlement reached on May 15, 2008), HUD settled a disability discrimination case for $40,000 that was brought against the managers and owners of an apartment complex who failed to reasonably accommodate autistic child.

On May 15, 2008, HUD settled a discrimination complaint filed against Princeton Property Management, Inc. and Masters Loop, LLC for $40,000. The complaint alleged that they had violated the Fair Housing Act on the basis of disability by refusing to grant Daniel and Jenny Sanchez a transfer to a ground floor apartment as a reasonable accommodation for the special needs of their three-year-old son.

The Sanchezes requested to move to a ground floor apartment to avoid disturbing their neighbors when their young child stomped and banged on the floor. Although the Sanchezes informed the management staff that the reason for their son’s behavior was due to his autism, their request was refused. The Sanchezes received notices for noise disturbances in June and September 2007, after a number of complaints from neighbors. Although a ground floor apartment became available during that time period, management made a decision not to offer it to the Sanchez family.

On November 7, 2007, the Sanchezes were notified their lease would not be renewed and were told to vacate the apartment by December 31, 2007. On December 1, 2007, the family again requested a ground floor apartment by submitting a written request. That request was denied on December 3, 2007, for the stated reason that too many residents had complained about the noise.

Mrs. Sanchez, pregnant with a second child, contacted management several times over the next few weeks to request an extension because she was due to deliver on December 31, 2007. Initially, management indicated that it might allow an extension of time for the move-out. However, after management received a copy of the filed housing discrimination complaint the request was denied. Consequently, the Sanchezes vacated the apartment by the deadline.

The Sanchezes filed their complaint with HUD in December 2007, alleging that Masters Loop, Inc., the owner of the 144-unit Masters Apartments, and Princeton Property Management Company, Inc., violated the Fair Housing Act’s prohibition against disability discrimination in its “refusal to make reasonable accommodations in rules, policies, practices, or services,” when such an accommodation is necessary to afford the family an equal opportunity to enjoy a dwelling. The law requires owners and property managers to make changes to their policies when such an accommodation is reasonable and will afford a person with a disability the ability to enjoy their home.

In addition to the $40,000 payment to the Sanchezes, the May 15, 2008 settlement also required the defendants to donate $2,500 to an autism group and $2,500 to a designated early childhood development center in the family’s school district. The settlement also required the defendants to undergo fair housing training, notify tenants and applicants of the company’s reasonable accommodation policy and submit reports to HUD regarding the handling of reasonable accommodation requests at the apartment complex for a one-year period.

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Instances When a Housing Provider Can Deny a Request for a Reasonable Accommodation Without Violating the Fair Housing Act

Are there any instances when a housing provider can deny a request for a reasonable accommodation without violating the Fair Housing Act?

Yes. A housing provider can deny a request for a reasonable accommodation if the request was not made by or on behalf of a person with a disability or if there is no disability-related need for the accommodation. In addition, a request for a reasonable accommodation may be denied if providing the accommodation is not reasonable (i.e., if it would impose an undue financial and administrative burden on the housing provider or it would fundamentally alter the nature of the provider’s operations). The determination of undue financial and administrative burden must be made on a case-by-case basis involving various factors, such as the cost of the requested accommodation, the financial resources of the provider, the benefits that the accommodation would provide to the requester, and the availability of alternative accommodations that would effectively meet the requester’s disability-related needs.

When a housing provider refuses a requested accommodation because it is not reasonable, the provider should discuss with the requester whether there is an alternative accommodation that would effectively address the requester’s disability-related needs without a fundamental alteration to the provider’s operations and without imposing an undue financial and administrative burden. If an alternative accommodation would effectively meet the requester’s disability-related needs and is reasonable, the provider must grant it. An interactive process in which the housing provider and the requester discuss the requester’s disability-related need for the requested accommodation and possible alternative accommodations is helpful to all concerned because it often results in an effective accommodation for the requester that does not pose an undue financial and administrative burden for the provider.

Example: As a result of a disability, a tenant is physically unable to open the dumpster placed in the parking lot by his housing provider for trash collection. The tenant requests that the housing provider send a maintenance staff person to his apartment on a daily basis to collect his trash and take it to the dumpster. Because the housing development is a small operation with limited financial resources and the maintenance staff are on site only twice per week, it may be an undue financial and administrative burden for the housing provider to grant the requested daily trash pick-up service. Accordingly, the requested accommodation may not be reasonable. If the housing provider denies the requested accommodation as unreasonable, the housing provider should discuss with the tenant whether reasonable accommodations could be provided to meet the tenant’s disability-related needs – for instance, placing an open trash collection can in a location that is readily accessible to the tenant so the tenant can dispose of his own trash and the provider’s maintenance staff can then transfer the trash to the dumpster when they are on site. Such an accommodation would not involve a fundamental alteration of the provider’s operations and would involve little financial and administrative burden for the provider while accommodating the tenant’s disability-related needs.

There may be instances where a housing provider believes that, while the accommodation requested by an individual is reasonable, there is an alternative accommodation that would be equally effective in meeting the individual’s disability-related needs. In such a circumstance, the housing provider should discuss with the individual if she is willing to accept the alternative accommodation. However, providers should be aware that persons with disabilities typically have the most accurate knowledge about the functional limitations posed by their disability, and an individual is not obligated to accept an alternative accommodation suggested by the provider if she believes it will not meet her needs and her preferred accommodation is reasonable.

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What Housing Providers Need to Know About Service Animals

Under the Fair Housing Act, a housing provider cannot refuse housing to someone who is disabled because of their disability. Just as important, the law requires housing providers to accommodate a person’s disability by changing or modifying a rule or policy or practice when doing so is necessary to give the disabled person equal opportunity to use and enjoy his or her unit.

Under the Fair Housing Act, a housing provider who has established a "no pet" policy must allow a disabled resident to keep a service animal as a reasonable accommodation. The housing provider must allow the disabled resident to keep the service animal if three conditions are met: (1) the resident must meet the definition of handicap as defined in the fair housing law; (2) the housing provider must know about or should have know about the resident’s handicap; and (3) the accommodation may be necessary to afford the disabled resident an equal opportunity to use and enjoy the dwelling.

Example: A blind applicant for rental housing wants to live in a dwelling unit with a seeing-eye dog. The building has a “no pets” policy. It is a violation of the law for the owner or manager of the apartment complex to refuse to permit the applicant to live in the apartment without the seeing-eye dog because without the seeing-eye dog the blind person will not have the opportunity to use and enjoy the dwelling.

When an applicant or resident who has a disability requests to live with a service animal, follow the usual accommodation process. It is a “reasonable accommodation” to allow residents to live with service animals that meet their disability-related needs.

A service animal (also referred to as an assistance animal) usually is defined as “any animal that is individually trained to do work or perform tasks for the benefit of a person with a disability.” Fair housing laws also consider “emotional support” or “companion” animals to be a type of service or assistance animal.

Service animals are not pets. A person with a disability uses a service animal as an auxiliary aid – similar to the use of a cane, crutches or wheelchair. Fair housing laws require that service animals be permitted despite “no pet” rules.

Owners of service animals should not be charged pet deposits or fees. General cleaning or damage deposits can be charged, if all residents are similarly charged. A resident with a service animal is liable for any damage the animal causes.

While the most common service animals are dogs, they may be other species, such as cats, monkeys, birds or other animals.

Service animals may be any breed, size or weight. Do not apply pet size or weight limitations to service animals.

There is no legal requirement for service animals to wear visible identification (i.e., special collar or harness) or to have documentation (i.e., license, training certification or identification papers). Thus, if might not be evident at first sight whether a dog is a service animal.

Although there is no legal requirement for service animals to wear visible identification, if a service animal is “wearing a harness or if the hearing dog or service dog is wearing a blaze orange leash and collar, hearing dog cape, or service dog backpack, and the person with disabilities being led or accompanied has in his or her possession a pictured identification card certifying that the dog was trained by a qualified organization or trainer,” Michigan law imposes criminal penalties (jail and/or fines) on any person who fails to reasonably accommodate the service animal. See M.C.L.A. 750.502(c) and 751.61 et seq.

A person may train his or her own service animal.

Because service animals provide different types of assistance, in some cases a person with a disability may require more than one service animal.

The service animal’s owner is responsible for the animal’s care, should observe leash laws, properly dispose of animal waste, and ensure the animal behaves around others and does not break tenancy rules (such as noise rules).

It is critical to remember that a service animal is not a pet. Various fair housing laws require housing providers to modify their "no pets" policy to allow the use of a service animal by a person with a disability. This does not mean the housing provider must abandon its "no pets" policy altogether, but simply that it must make an exception to its general rule for service animals.

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The Difference Between a "Reasonable Accommodation" and a "Reasonable Modification" Under the Fair Housing Act

Under the Fair Housing Act, a reasonable modification is a structural change made to the premises whereas a reasonable accommodation is a change, exception, or adjustment to a rule, policy, practice, or service. A person with a disability may need either a reasonable accommodation or a reasonable modification, or both, in order to have an equal opportunity to use and enjoy a dwelling, including public and common use spaces. Generally, under the Fair Housing Act, the housing provider is responsible for the costs associated with a reasonable accommodation unless it is an undue financial and administrative burden, while the tenant or someone acting on the tenant’s behalf, is responsible for costs associated with a reasonable modification.

Example 1: Because of a mobility disability, a tenant wants to install grab bars in the bathroom. This is a reasonable modification and must be permitted at the tenant’s expense.

Example 2: Because of a hearing disability, a tenant wishes to install a peephole in her door so she can see who is at the door before she opens it. This is a reasonable modification and must be permitted at the tenant’s expense.

Example 3: Because of a mobility disability, a tenant wants to install a ramp outside the building in a common area. This is a reasonable modification and must be permitted at the tenant’s expense.

Example 4: Because of a vision disability, a tenant requests permission to have a guide dog reside with her in her apartment. The housing provider has a “no-pets” policy. This is a request for a reasonable accommodation, and the housing provider must grant the accommodation

It is important for all real estate professionals to remember that the Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. It is equally important for everyone to remember that the Act also requires reasonable accommodation and/or reasonable modification when necessary to accommodate a person with a disability.

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What is a “Reasonable Modification” for Purposes of the Fair Housing Act?

A reasonable modification is a physical/structural change made to a resident’s living space or to the common areas of a community, which is necessary to enable a resident with a disability to have full enjoyment of the housing. Reasonable modifications can include structural changes to interiors and exteriors of dwellings and to common and public use areas. A request for a reasonable modification may be made at any time during the tenancy. The Fair Housing Act makes it unlawful for a housing provider or homeowners’ association to refuse to allow a reasonable modification to the premises when such a modification may be necessary to afford persons with disabilities full enjoyment of the premises.

The cost of the modification is at the expense of the person with a disability, although the owner/landlord may voluntarily pay for the modification.

To show that a requested modification may be necessary, there must be an identifiable relationship, or nexus, between the requested modification and the individual’s disability. Further, the modification must be “reasonable.” Examples of modifications that typically are reasonable include widening doorways to make rooms more accessible for persons in wheelchairs; installing grab bars in bathrooms; lowering kitchen cabinets to a height suitable for persons in wheelchairs; adding a ramp to make a primary entrance accessible for persons in wheelchairs; or altering a walkway to provide access to a public or common use area. These examples of reasonable modifications are not exhaustive.

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What is a “Reasonable Accommodation” for Purposes of the Fair Housing Act?

Under the Fair Hosing Act, a “reasonable accommodation” is a change, exception, or adjustment to a rule, policy, practice, or service that may be necessary for a person with a disability to have an equal opportunity to use and enjoy a dwelling, including public and common use spaces. Since rules, policies, practices, and services may have a different effect on persons with disabilities than on other persons, treating persons with disabilities exactly the same as others will sometimes deny them an equal opportunity to use and enjoy a dwelling. The Fair Housing Act makes it unlawful to refuse to make reasonable accommodations to rules, policies, practices, or services when such accommodations may be necessary to afford persons with disabilities an equal opportunity to use and enjoy a dwelling unit, including public and common use areas.

Example 1: A housing provider has a policy of providing unassigned parking spaces to residents. A resident with a mobility impairment, who is substantially limited in her ability to walk, requests an assigned accessible parking space close to the entrance to her unit as a reasonable accommodation. There are available parking spaces near the entrance to her unit that are accessible, but those spaces are available to all residents on a first come, first served basis. The provider must make an exception to its policy of not providing assigned parking spaces to accommodate this resident.

Example 2: A housing provider has a policy of requiring tenants to come to the rental office in person to pay their rent. A tenant has a mental disability that makes her afraid to leave her unit. Because of her disability, she requests that she be permitted to have a friend mail her rent payment to the rental office as a reasonable accommodation. The provider must make an exception to its payment policy to accommodate this tenant.

Example 3: A housing provider has a “no pets” policy. A tenant who is deaf requests that the provider allow him to keep a dog in his unit as a reasonable accommodation. The tenant explains that the dog is an assistance animal that will alert him to several sounds, including knocks at the door, sounding of the smoke detector, the telephone ringing, and cars coming into the driveway. The housing provider must make an exception to its “no pets” policy to accommodate this tenant.

Example 4: A condominium association publishes a monthly newsletter for all residents. One of the residents is blind and therefore cannot read the newsletter. The condominium association might be required to provide a taped copy of the association’s newsletter to accommodate the tenant who has a visual disability.

A housing provider should do everything it can to make reasonable accommodations, but it is not required to make changes that would fundamentally alter the program or create an undue financial and administrative burden. Reasonable accommodations may be necessary at all stages of the housing process, including application, tenancy, or to prevent eviction.

To show that a requested accommodation may be necessary, there must be an identifiable relationship, or nexus, between the requested accommodation and the individual’s disability.

It is important for all real estate professionals to remember that the Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. It is equallyimportant for everyone to remember that the Act also requires reasonable accommodation and/or reasonable modification when necessary to accommodate a person with a disability.

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How a Housing Provider Can Determine if an Individual Poses a “Direct Threat” under the Fair Housing Act

Every real estate professional should already know that the federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. What many people do not realize, though, is that the Act does not protect an individual with a disability whose tenancy would constitute a “direct threat” to the health or safety of other individuals or result in substantial physical damage to the property of others unless the threat can be eliminated or significantly reduced by reasonable accommodation.

So, how can a housing provider determine if an individual poses a “direct threat” under the Fair Housing Act?

The Fair Housing Act does not allow for exclusion of individuals based upon fear, speculation, or stereotype about a particular disability or persons with disabilities in general. A determination that an individual poses a direct threat must rely on an individualized assessment that is based on reliable objective evidence (e.g., current conduct, or a recent history of overt acts). The assessment must consider: (1) the nature, duration, and severity of the risk of injury; (2) the probability that injury will actually occur; and (3) whether there are any reasonable accommodations that will eliminate the direct threat.

Consequently, in evaluating a recent history of overt acts, a housing provider must take into account whether the individual has received intervening treatment or medication that has eliminated the direct threat (i.e., a significant risk of substantial harm). In such a situation, the housing provider may request that the individual document how the circumstances have changed so that he no longer poses a direct threat. A housing provider may also obtain satisfactory assurances that the individual will not pose a direct threat during the tenancy. The housing provider must have reliable, objective evidence that a person with a disability poses a direct threat before excluding him from housing on that basis.

Example 1: A housing provider requires all persons applying to rent an apartment to complete an application that includes information on the applicant’s current place of residence. On her application to rent an apartment, a woman notes that she currently resides in Wilson House. The manager of the apartment complex knows that Wilson House is a group home for women receiving treatment for alcoholism. Based solely on that information and his personal belief that alcoholics are likely to cause disturbances and damage property, the manager rejects the applicant.

The rejection is unlawful because it is based on a generalized stereotype related to a disability rather than an individualized assessment of any threat to other persons or the property of others based on reliable, objective evidence about the applicant’s recent past conduct. The housing provider may not treat this applicant differently than other applicants based on his subjective perceptions of the potential problems posed by her alcoholism by requiring additional documents, imposing different lease terms, or requiring a higher security deposit. However, the manager could have checked this applicant’s references to the same extent and in the same manner as he would have checked any other applicant’s references. If such a reference check revealed objective evidence showing that this applicant had posed a direct threat to persons or property in the recent past and the direct threat had not been eliminated, the manager could then have rejected the applicant based on direct threat.

Example 2: John Doe, a tenant at the Oak Street apartment complex, is arrested for threatening his neighbor while brandishing a baseball bat. The Oak Street lease agreement contains a term prohibiting tenants from threatening violence against other residents. Oak Street’s rental manager investigates the incident and learns that John Doe threatened the other resident with physical violence and had to be physically restrained by other neighbors to keep him from acting on his threat. Following Oak Street’s standard practice of strictly enforcing its “no threats” policy, the Oak Street rental manager issues John Doe a 30-day notice to quit, which is the first step in the eviction process. John Doe’s attorney contacts Oak Street’s rental manager and explains that John Doe has a psychiatric disability that causes him to be physically violent when he stops taking his prescribed medication. Suggesting that his client will not pose a direct threat to others if proper safeguards are taken, the attorney requests that the rental manager grant John Doe an exception to the “no threats” policy as a reasonable accommodation based on John Doe’s disability.

The Oak Street rental manager need only grant the reasonable accommodation if John Doe’s attorney can provide satisfactory assurance that John Doe will receive appropriate counseling and periodic medication monitoring so that he will no longer pose a direct threat during his tenancy. After consulting with John Doe, the attorney responds that John Doe is unwilling to receive counseling or submit to any type of periodic monitoring to ensure that he takes his prescribed medication. The rental manager may go forward with the eviction proceeding, since John Doe continues to pose a direct threat to the health or safety of other residents.

The two examples described above are merely hypothetical situations used to demonstrate the "direct threat" exclusion of the Fair Housing Act. Because of the potential for civil liability for violations of the Fair Housing Act, I recommend consulting with an attorney before excluding someone as a "direct threat" in order to minimize potential liability for discrimination.

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A Few Examples of Illegal Housing Practices Against Persons with Disabilities Under the Fair Housing Act

Here is a little reminder for everyone about their obligations under the Fair Housing act with respect to people with disabilities. The following are a few examples of illegal housing practices against persons with disabilities under the Fair Housing Act:

Refusing to rent or sell or otherwise making unavailable to an individual with a disability a dwelling unit, because of the buyer’s or renter’s disability;

Imposing different terms and conditions on the sale or rental of a dwelling unit due to the buyer’s or renter’s disability;

Coercing, intimidating or threatening a person for exercising his or her rights under the Fair Housing Act;

Informing an individual with a disability that a dwelling was not available for inspection, when in fact the dwelling was available;

Discriminating against any person who associates with a person with a disability in the sale or rental of a covered dwelling unit;

Blockbusting – that is paying someone to rent or sell a dwelling unit to another person, so as to prevent an individual with a disability from moving into a neighborhood;

Refusing to make reasonable accommodations of rules, policies, practices or services that are needed to accommodate an individual with a disability;

Refusing to allow a tenant with a disability to undertake reasonable structural modifications to an existing building which may be necessary to accommodate that person’s disability;

Engaging in any real estate-related transaction that promotes discrimination against an individual with a disability;

Denying a person with a disability access to a multiple listing service, real estate broker’s organization or other related service based upon his or her disability;

Asking a prospective tenant/home-buyer about his or her disability;

Requiring tenants or others living in housing to be able to “live independently”;

Requiring a person with a disability to pay a higher security deposit than that requested from a tenant without a disability;

Publishing an advertisement, notice or statement which limits or excludes individuals with disabilities from renting or purchasing a dwelling;

Denying housing due to a present or past history of a mental illness;

Asking a prospective tenant about illegal drug use or illegal drug convictions unless those questions are asked of all prospective tenants.

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Types of Discrimination Against Persons with Disabilities Prohibited by the Fair Housing Act

The goal of the Fair Housing Act is to ensure “no person shall be subjected to discrimination because of race, color, religion, sex, handicap, familial status or national origin in the sale, rental or advertising of dwellings, in the provision of brokerage services, or in the availability of residential real-estate related transactions.” With respect to people with disabilities, the Act serves to:

Give people with disabilities opportunities to choose where they want to live;

Assure that reasonable accommodations and reasonable modifications are made so that a person with a disability can secure and use housing as fully as a person without a disability.

Assure that persons with disabilities are able to live free from intimidation and harassment; and

Require that multi-family housing built for first occupancy after March 13, 1991, has certain accessible features (e.g., a usable kitchen for a person who uses a wheelchair).

The Fair Housing Act prohibits housing providers from discriminating against applicants or residents because of their disability or the disability of anyone associated with them and from treating persons with disabilities less favorably than others because of their disability. The Act also prohibits housing providers from refusing residency to persons with disabilities, or, with some narrow exceptions, placing conditions on their residency, because those persons may require reasonable modifications or reasonable accommodations.

With respect to reasonable accommodations and reasonable modifications:

The Act makes it unlawful for any person to refuse “to make reasonable accommodations in rules, policies, practices, or services, when such accommodations may be necessary to afford . . . person(s) [with disabilities] equal opportunity to use and enjoy a dwelling.”

The Act makes it unlawful for any person to refuse “to permit, at the expense of the [disabled] person, reasonable modifications of existing premises occupied or to be occupied by such person if such modifications may be necessary to afford such person full enjoyment of the premises, except that, in the case of a rental, the landlord may where it is reasonable to do so condition permission for a modification on the renter agreeing to restore the interior of the premises to the condition that existed before the modification, reasonable wear and tear excepted.”

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Rules About When and How a Tenant Must Request a Reasonable Accommodation or Permission to Make a Reasonable Modification

An applicant or resident is not entitled to receive a reasonable accommodation or modification unless she requests one. However, the Fair Housing Act does not require that a request be made in a particular manner or at a particular time. A person with a disability need not personally make the reasonable accommodation request; the request can be made by a family member or someone else who is acting on her behalf. An individual making a reasonable accommodation or modification request does not need to mention the Act or use the words “reasonable accommodation” or “reasonable modification.” However, the requester must make the request in a manner that a reasonable person would understand to be a request for an exception, change, or adjustment to a rule, policy, practice, or service because of a disability or that a reasonable person would understand to be a request for permission to make a structural change because of a disability.

Example: A tenant in a large apartment building makes an oral request that she be assigned a mailbox in a location that she can easily access because of a physical disability that limits her ability to reach and bend. The provider would prefer that the tenant make the accommodation request on a pre-printed form, but the tenant fails to complete the form. The provider must consider the reasonable accommodation request even though the tenant would not use the provider’s designated form.

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Saturday, February 14, 2009

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New Michigan Fair Housing Lawsuit Filed in Federal Court

I was in the process of updating the online fair housing continuing education courses offered by my school (www.123ConEd.com), when I came across this recent Michigan Fair Housing Act case. Because Fair Housing is such an important topic I thought that I'd post a summary of this recent case, which was just filed in court four days ago.

On January 29, 2009, the United States Department of Justice filed a new fair housing lawsuit against two Ypsilanti, Michigan, landlords for sexual harassment. The suit was filed against Ronald D. Peterson and Glen E. Johnson, the owner and rental manager, respectively, of 11 single family homes in Ypsilanti, alleging a pattern or practice of sexual harassment of female tenants. The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.

The complaint, filed in U.S. District Court for the Eastern District of Michigan, alleges that Mr. Johnson subjected female tenants to discrimination on the basis of sex, including severe, pervasive and unwelcome sexual harassment. The complaint alleges that Mr. Johnson made unwanted verbal sexual advances, entered the apartment of female tenants without permission or notice, granted and denied tangible housing benefits based on sex, and took adverse action against female tenants when they refused or objected to his sexual advances. The complaint also alleges that Mr. Peterson, the owner of the properties, is liable for Mr. Johnson's alleged misconduct, and that he knew or should have known of Mr. Johnson's alleged misconduct but failed to take reasonable preventive or corrective measures. This case is being handled jointly by the Civil Rights Division of the Department of Justice and the U.S. Attorney's Office for the Eastern District of Michigan in Detroit.

The suit seeks monetary damages for victims, civil penalties and a court order barring future discrimination. This case is currently pending.

It is important for all real estate professionals to remember that the federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. The Act also prohibits sexual harassment, which is something that many real estate professionals do not realize.

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To learn more about Fair Housing issues in Michigan (and many other topics affecting Michigan real estate professionals), please visit us at www.123ConEd.com. 123 ConEd LLC (www.123ConEd.com) is a leading online provider of continuing education courses to real estate professionals in Michigan. Our courses are fully approved and properly certified by the Michigan Department of Labor & Economic Growth. All of our online Michigan con ed courses are designed to offer our students the most information, as quickly and economically as possible.

Justice Department Resolves Lawsuit Alleging Race Discrimination at Roseville, Michigan, Apartment Complex for $170,000

I was in the process of updating the online fair housing continuing education courses offered by my school (www.123ConEd.com), when I came across this recent Michigan Fair Housing Act case. Because Fair Housing is such an important topic, I thought that I'd post a summary of this recent case.

In late November 2008, the United States Department of Justice settled a fair housing lawsuit for $170,000 against the owners and managers of Regent Court Apartments in Roseville, Michigan. The lawsuit alleged that the owners and managers had discriminated against African-Americans who were seeking to rent apartments at the complex. Specifically, the complaint alleged that Regent Court Apartments, LLC, and Donna Harrison, the leasing manager, engaged in a pattern or practice of discrimination against African-American applicants for tenancy.

The Justice Department's lawsuit was based upon evidence developed by Operation Home Sweet Home, a concentrated initiative to expose and eliminate housing discrimination in America. Operation Home Sweet Home utilized the Department of Justice's fair housing testing program where individuals pose as renters for purposes of gathering information about possible discriminatory practices. The Fair Housing Center of Metropolitan Detroit, a private fair housing organization, assisted with the testing pursuant to a contract with the Justice Department.

Under the terms of the settlement, the defendants were required to pay $75,000 in damages to three victims who were discriminated against because of their race at Regent Court Apartments; pay $55,000 in a civil penalty to the United States; and pay $40,000 into a settlement fund that will be distributed to any additional victims of discrimination at Regent Court Apartments who are identified following entry settlement. The settlement also required the defendants to undergo fair housing training, self-testing, and reporting requirements for the three year term of the decree.

It is important for all real estate professionals to remember that the Fair Housing Act ensures that all individuals have equal access to housing. The Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. Fair housing issues are important and real estate professionals need to be familiar with the law and what they can/cannot do.

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US Department of Justice Settles Lawsuit with Landlord Alleging Discrimination Against Families with Children for $145,000

I was in the process of updating the online fair housing continuing education courses offered by my school (www.123ConEd.com), when I came across this recent Fair Housing Act case. Although this case was filed in Louisiana and not in Michigan, the case is still instructive for Michigan real estate professionals because it was brought under the federal Fair Housing Act, which applies equally in all states. Because Fair Housing is such an important topic, I thought that I'd post a summary of this recent case.

On September 30, 2008, the United States Department of Justice settled a fair housing lawsuit for $145,000 against the owner and the property manager of Pecan Terrace Apartments in Lafayette, Louisiana. The lawsuit alleged that the owner and property manager discriminated against families with children in violation of the Fair Housing Act. According to the Department of Justice’s complaint, Pecan Terrace Apartments, LLC, and Taufiq M. Sekhani had and exercised a policy of refusing to rent second floor units to families with children and discouraging families with children from renting at the complex.

This case arose as the result of the use of fair-housing testers, individuals who pose as renters for the purpose of gathering information about possible discriminatory practices in the rental of apartments. In February 2006, in the aftermath of the housing crisis caused by Hurricane Katrina, the Department of Justice announced Operation Home Sweet Home, which was a concentrated initiative to expose and combat housing discrimination in America. Operation Home Sweet Home targets housing discrimination all over the country, not just areas hit by Hurricane Katrina.

Under the terms of the settlement, the defendants were required to pay up to $115,000 to compensate victims of discrimination at Pecan Terrace Apartments, as well as pay $30,000 in civil penalties to the United States. The settlement also called for numerous corrective measures, including training on the requirements of federal housing law, a nondiscrimination policy, record keeping and monitoring.

The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Since January 1, 2001, the Department of Justice’s Civil Rights Division has filed 271 cases to enforce the Fair Housing Act, 54 of which alleged discrimination based on familial status.

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List of Activities that Assistants (Who are Not Licensed Real Estate Salespersons) Can Perform in Michigan

Each year, Michigan real estate professionals make dozens of phone calls to the Michigan Department of Labor & Economic Growth ("DLEG") requesting information about activities that an unlicensed individual may perform. In an effort to provide guidance and to help reduce a broker's exposure to potential risk in the utilization of unlicensed assistants, the DLEG published a list of guidelines, which were modeled after an article written by Tom Kotzian (Macomb County Association of Realtors) and approved by Ann Millben (Licensing Administrator for Real Estate for the DLEG).

Here are the guidelines provided by the DLEG:

Unlicensed Assistants MAY:

Assist licensees during an open house, performing the following functions as a "host" or "hostess"
- Open the door and greet prospects as they arrive at the open house
- Hand out prepared printed material
- Have prospects sign a register (guest book) to record names, addresses and phone numbers for the listing
- Accompany prospects through the home for security purposes (only the licensee should answer any questions pertaining to the material aspects of the house or its price and terms)
Perform strictly clerical tasks
Function as a courier in picking up or delivering documents on behalf of the employing licensee
Note: Keys should not be given to unlicensed persons for the purpose of showing a listed property. Brokers are responsible for the properties in their listing inventory and should only give a key to a licensee who is able to show proper I.D. (e.g., valid pocket card and driver's license with photo)

Unlicensed Assistants MAY NOT:

Independently show or demonstrate property to prospective buyers
Make cold calls by telephone or in person to potential listers, purchasers, tenants or landlords
Answer any questions on title insurance, financing or closings
Independently hold open houses for brokers, or staff booths in home shows or fairs
Solicit business through telephone prospecting
Give additional information not included in prepared written promotional material that has been distributed to the public (e.g., newspaper ads, flyers, brochures)
Represent themselves as an agent for a real estate broker or the owner/seller of property
Have their name printed on business cards or stationery that would imply they are an agent for the real estate broker
Conduct telephone solicitation calls. For example, if John Doe, an unlicensed assistant, calls and indicates he represents ABC Realty, one is led to believe the purpose of the call is to engage in real estate activities. The definition of broker and salesperson in the Occupational Code includes one who "lists or attempts to list." Therefore, a call by an unlicensed assistant identifying him or herself as a "representative" of a real estate company is an attempt to list even if specific terms are not discussed at that time.
Perform any of the acts for which a license is required under Michigan Real Estate License Law. See M.C.L.A. 339.2501 et seq.)

Licensees who violate State license law by allowing unlicensed assistants to practice real estate on their behalf subject themselves to one or more of the following penalties:

Placement of a limitation on the license
Suspension of license
Denial of license renewal
Revocation of license
A civil fine not to exceed $10,000 per offense
Censure
Probation
Restitution.

(M.C.L.A. 339.602)

Brokers and managers must also be aware of their liability in allowing licensees to employ unlicensed assistants. Factors such as worker's compensation laws, agency law, income tax reporting and withholding requirements, sexual harassment, employment discrimination and a myriad of state and federal employment statutes must be carefully reviewed when allowing licensees to hire unlicensed assistants.

Brokers need to remember that they are responsible for the acts of their licensed salespersons and associate brokers and "shall not contract with an individual who is licensed to the broker so as to lose the authority to supervise the licensee." M.C.L.A. 339.22325. It is, therefore, the broker's responsibility to supervise all personnel acting under the scope of the broker's authority.

Brokers need to consider these issues when writing independent contracts with their salespersons and associate brokers. It is recommended that, prior to drafting any independent contract section on this subject, brokers consult with an attorney who is knowledgeable in employment discrimination and related employment laws. Good research and preparation will help avoid many of the problems addressed in this posting.

For more information or answers to specific questions, you should contact the DLEG directly by calling (517) 241-9288.

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Please visit us at www.123ConEd.com for all of your Michigan real estate continuing education needs. 123 ConEd LLC (www.123ConEd.com) is a leading online provider of continuing education courses to real estate professionals in Michigan. Our courses are fully approved and properly certified by the Michigan Department of Labor & Economic Growth. All of our online Michigan real estate con ed courses are designed to offer our students the most information, as quickly and economically as possible.

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Friday, February 27, 2009

A Few Exceptions to the Fair Housing Act

The Fair Housing Act Does Not Protect . . .

$1 Million Judgment in Sexual Harassment Case Against Cincinnati Landlord

U.S. Department of Justice Sued the Housing Authority in Wayne County, Illinois, for Race Discrimination in Violation of the Fair Housing Act

$62,000 Settlement in Fair Housing Disability Discrimination Case Against Apartment Complex for Refusing to Allow Residents to Keep Service Dogs

A Housing Provider Can't Charge an Extra Fee or Require an Additional Deposit as a Condition of Granting a Reasonable Accommodation

When and How an Individual Needs to Request a Reasonable Accommodation or Permission to Make a Reasonable Modification under the Fair Housing Act

Types of Information (If Any) a Housing Provider May Request from a Person with an Obvious or Known Disability

Assigning a Parking Space Can Be Considered a Reasonable Accommodation under the Fair Housing Act

$120,000 Settlement in Discrimination Lawsuit against Chicago Area Realtors (Resulted from Use of Fair Housing Testers)

$40,000 Settlement against Managers and Owners of Apartment Complex Who Failed to Reasonably Accommodate Autistic Child

Instances When a Housing Provider Can Deny a Request for a Reasonable Accommodation Without Violating the Fair Housing Act

What Housing Providers Need to Know About Service Animals

The Difference Between a "Reasonable Accommodation" and a "Reasonable Modification" Under the Fair Housing Act

What is a “Reasonable Modification” for Purposes of the Fair Housing Act?

What is a “Reasonable Accommodation” for Purposes of the Fair Housing Act?

How a Housing Provider Can Determine if an Individual Poses a “Direct Threat” under the Fair Housing Act

A Few Examples of Illegal Housing Practices Against Persons with Disabilities Under the Fair Housing Act

Types of Discrimination Against Persons with Disabilities Prohibited by the Fair Housing Act

Rules About When and How a Tenant Must Request a Reasonable Accommodation or Permission to Make a Reasonable Modification

Saturday, February 14, 2009

GRAND OPENING! 123 ConEd LLC for your Michigan Real Estate Continuing Education Needs

New Michigan Fair Housing Lawsuit Filed in Federal Court

Justice Department Resolves Lawsuit Alleging Race Discrimination at Roseville, Michigan, Apartment Complex for $170,000

US Department of Justice Settles Lawsuit with Landlord Alleging Discrimination Against Families with Children for $145,000

List of Activities that Assistants (Who are Not Licensed Real Estate Salespersons) Can Perform in Michigan

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