RealManage Insight

Your HOA Board Responsibility for Housing Discrimination

by Rolando Coronado on Aug 11, 2020 8:54:00 AM

The Fair Housing Act, also known as Title VII of the Civil Rights Act is a federal law which prohibits discrimination in housing and housing-related services due to race, color, religion, sex, national origin, disability, and familial status. Because the FHA applies to entities that set terms and conditions for housing and provide services and facilities in connection with housing, it applies to HOAs and other community associations. How much responsibility does your board and it's members have with regards to ending housing discrimination and how can you ensure that your community complies with the laws.

in 2016 the Housing and Urban Development department amended its federal housing regulations to firmly establish association liability for discriminatory conduct by its Board, directors, employees, and even by residents. These new regulations placed a lot of responsibility on the HOA to ensure that the rules were well understood and followed.*

Inclusive CC&Rs and Bylaws

Covenants and restrictions form the foundation of a homeowners’ association.  By establishing standards for what homeowners must do, and must refrain from doing, they set the tone for the community.  Well-planned covenants can protect property values, promote safety and aesthetic appeal, and generally improve a neighborhood’s quality of life. Bylaws can also amend these covenant and restrictions to provide clarity or even more accurate definitions of the rules they define for owners. The first step any board must take to evaluate their compliance with Fair Housing anti-discrimination legislation is to review their current governing documents. For instance, if an HOA's governing documents give its board of directors the right to make housing decisions, such as whether to rent or sell a house, it must be careful not to make such decisions based on a person’s race, color, religion, sex, national origin, familial status, or disability.

When an HOA’s governing documents control such things as who can use a community pool, where or whether members can place religious symbols on their property, or whether ramps can be used in lieu of porch steps, the HOA risks violating the FHA. An HOA should review its governing documents with their licensed attorney to ensure there is no discriminatory language included. These rules must be applied consistently to avoid any potential violations.

We recently celebrated the ADA's 30th year of providing protections for those with disability and it's important that your community recognizes the unique needs of some individuals. If you are interested in learning more about the ADA please visit their website.

Quid Pro Quo/Hostile Environment Rule

Initially industry leaders, including members of Community Associations Institute (CAI), expressed strong disapproval of the Quid Pro Quo/Hostile Environment Rule. There was a lot of misunderstanding and miscommunication associated with the rule and many were under the impression that the rule intended to make the HOA and it's board members liable for all neighbor disputes, but since the law was enacted in 2016 the intent has become less nebulous and more defined. Below is the language from HUD that caused so much concern:

"Pursuant to the rule, a housing provider is directly liable for the illegal, discriminatory practices of a third-party if the provider (1) knew or should have known of the discriminatory housing practice; (2) had the power to correct the discriminatory housing practice; and, (3) failed to take prompt action to end such practice. A housing provider authority to end a discriminatory practice is deemed a function of the provider’s control over the discriminating third-party and any legal obligation the provider may have to end discriminatory housing practices."14

12 Federal Register, Volume 81, No. 178 (Washington, DC, September 16, 2016), p. 63054. 13 Ibid.
14 24 CFR § 100.7(a)(iii)

This rule clearly states that to avoid liability, an HOA Board must take some action to address any alleged discrimination by residents or other people within its authority. If a manager or Board member receives a complaint concerning neighbor-to-neighbor discrimination, some action must be taken. However, most of these neighbor disputes do not fall under the Fair Housing definition of discrimination and while every complaint should be evaluated equally, some may require a legal opinion if the board is unsure of the liability involved.

Corrective Actions

The law makes clear that boards need to take quick corrective actions but the actions themselves are not fully defined, but ensuring your association's governing documents clearly outline board responses to complaints can help ensure that all complaints are evaluated fairly.

Corrective measures can include verbal and/or written warnings and demands that the offensive and discriminatory conduct stop, legal action, including harassment restraining orders and/or reporting the offensive conduct to the police. Note that if a Board member is doing the harassing, that Board member must, of course, be kept out of any executive decisions relating to the harassment complaint.

In light of the potential liability and the sensitivity of the situation, if an HOA receives an allegation of discriminatory conduct, it should contact legal counsel for guidance.

*Please note that this blog and article are not intended to be legal advice. All content shared on the topic of housing discrimination should be discussed with your association attorney as it applies to your community. RealManage is not a primary source for legal advice and the statements in this blog may be subject to change.

Navigating all of the rules and regulations that come along with being a member of the HOA board can be complicated, but one of our goals at RealManage is to provide board members with resources and knowledge so that they are able to clearly and effectively serve their community. If you are interested in learning more about the Rules and Regulations for associations download our informative guide.

Rules and Regulations Download - CTA

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