Follow Eight Rules to Avoid 'Familial Status' Discrimination

Follow Eight Rules to
Avoid 'Familial Status'
Discrimination
From Tax Credit Housing Management Insider
A monthly subscription that helps you avoid compliance mistakes that
could jeopardize some—or even all—of your site’s tax credits.
Vendome Real Estate Media |
www.taxcredithousinginsider.com
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Follow Eight Rules to Avoid 'Familial Status' Discrimination
Tax credit sites are required to abide by the nondiscrimination provisions
of the federal Fair Housing Act (FHA) and their state or local fair housing
laws.
It's imperative that site owners and managers know the rules. The IRS has
stated that a finding of discrimination by the Justice Department or HUD
could result in the loss (or recapture) of tax credits.
One sometimes misunderstood aspect of the FHA is its ban on housing
discrimination based on “familial status.” This ban covers more people than
you think. It’s common to refer to the rules as protecting families with
children, but the ban on discrimination based on familial status extends
well beyond that to cover applicants and residents based on the presence
of a child 18 and under in the household. It also protects pregnant women
and those in the process of obtaining legal custody of a child under the age
of 18.
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In the most basic terms, the law bans sites from denying housing to
families with children. But you’ll have to do more than that to avoid fair
housing trouble based on familial status since discrimination claims may
arise from the way you advertise vacancies, show apartments, apply
occupancy standards, and enforce site rules, to name a few aspects of
day-to-day site management.
We'll give you eight rules for what not to do when dealing with families
with children—that is, potential trouble spots and how to handle them.
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Rule #1: Don’t Deny Housing to Households with Children.
Though it has been unlawful for 25 years, sites continue to run afoul of fair
housing provisions by refusing to rent to applicants because they have one
or more children living with them. Unless the site qualifies as senior
housing, it’s unlawful to screen out or deny housing to families with
children.
Some housing providers have strong reservations against renting to
households with children because of concerns about potential noise
complaints from crying babies or boisterous youngsters, damage to the unit
or common areas from playing children, or liability for falls or other
accidents involving young children. Though you may believe your concerns
are justified, you can’t refuse to rent to an applicant simply because there
are children living within the household. In fact, simply expressing a
preference against families with children can lead to a fair housing
complaint.
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Rule #2: Don’t Claim Senior Housing Exemption Unless You Qualify
The familial status provisions are aimed at preventing discrimination based
on the presence of a child or children under 18 in the household. The FHA
defines “familial status” as one or more children under the age of 18 “being
domiciled with” any of the following individuals:
• A parent or another person having legal custody of the child or children;
or
• The designee of such parent or other person having such custody, with
the written permission of such parent or other person.
The familial status provisions also apply to pregnant women and anyone in
the process of securing legal custody of a child under 18.
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Rule #2 (con’t): Don’t Claim Senior Housing Exemption Unless You Qualify
It's important to note, however, that fair housing law recognizes an
exception to the familial status provisions that allow age-restricted sites to
lawfully exclude children. But it’s a limited exception—it applies only if the
site satisfies strict legal requirements to qualify as “housing for older
persons.” Unless they do so, sites may not simply declare themselves as
“adult sites” or exclude families with children under 18 from living there.
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Rule #2 (con’t): Don’t Claim Senior Housing Exemption Unless You Qualify
Housing that meets the FHA definition of housing for older persons is
exempt from the law's familial status requirements, provided that:
• HUD has determined that the dwelling is specifically designed for and
occupied by elderly persons under a federal, state, or local government
program; or
• It is occupied solely by persons who are 62 or older; or
• It houses at least one person who is 55 or older in at least 80 percent of
the occupied units, and adheres to a policy that demonstrates intent to
house persons who are 55 or older.
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Rule #3: Don’t Treat Prospects Differently Because They Have Children
Treat all prospects consistently, regardless of whether there are children in
the household. It’s unlawful to impose different terms and conditions of a
tenancy on households based on familial status, so you can’t make the
leasing process more cumbersome, or quote varying rental terms, in an
effort to discourage applicants with children from renting at your site.
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Rule #4: Don’t Apply Unreasonable Occupancy Standards
Fair housing law doesn’t prevent sites from maintaining reasonable
occupancy policies as long as they apply them consistently, but it’s illegal to
set overly restrictive occupancy standards that have the effect of excluding
families with children. If a site’s occupancy policy keeps the number of
occupants unreasonably low, it’s likely to discourage families with children
from living there unless they’re willing to pay for a larger unit.
To ensure your site’s occupancy standards pass muster, the first step is to
check applicable state and local laws, which may limit occupancy based on
the number of people, square footage, and other factors. In general, federal
fair housing law defers to reasonable state and local restrictions on
occupancy, so you have to be familiar with those laws before you set or
enforce your occupancy standards.
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Rule #4 (con’t): Don’t Apply Unreasonable Occupancy Standards
HUD suggests a two-person/per-bedroom standard, but that isn’t written in
stone. In a recent statement, HUD pointed to language in its 1991
guidance, which states that although an occupancy policy of two persons in a
bedroom is generally reasonable under the FHA, such a policy might in some
circumstances unfairly exclude families with children and violate federal fair
housing law.
In one case, a national management company agreed to pay $15,000 to settle a
HUD complaint alleging discrimination against a Connecticut family with
children. The couple claimed that the company refused to renew their lease
after concluding that the family of five was too large for the two-bedroom
unit, where they had lived for nearly a decade. Allegedly, the company
maintained an unwritten policy restricting occupancy to two persons per
bedroom regardless of size, claiming that Connecticut state law required the
restriction. But HUD maintained that neither state law nor city ordinances
impose a blanket restriction [Secretary, HUD v. Hamilton Point Property
Management, LLC, August 2013].Vendome Real Estate Media |
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Rule #5: Don’t Express Unlawful Preferences in Statements or Ads
Fair housing law makes it unlawful to make any statements, orally and in
writing, expressing a preference against families with children under 18.
Advertisements may not contain limitations on the number or ages of
children, or state a preference for adults, couples, or singles, according to HUD
guidelines. The law doesn’t require proof of discriminatory intent to establish a
violation.
Increasingly, fair housing organizations have been monitoring Craigslist and
other online media to check for discriminatory advertisements. All too
often, they find blatantly discriminatory ads—such as “No kids”—but even
ambiguously worded ads can lead to a fair housing complaint if the language
suggests a preference for singles or against families with children.
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Rule #6: Don’t Engage in Unlawful Steering
Unless you’re exempt as a senior housing site, it’s unlawful to discourage
families with children under 18 from living at your site—or in certain parts of
your site.
When showing units to prospects, tell them about all available units that meet
their stated requirements. Limiting a prospect’s housing choices because she
has children under 18 in the household is a fair housing violation, commonly
known as “steering.” In general, steering means guiding, directing, or
encouraging prospects to live in—or not live in—certain sections of your site
based on any characteristic protected under federal, state, or local law. Even if
you believe it’s better to keep children out of harm’s way, you may face liability
for unlawful steering if you don’t tell families with children about available
units on upper floors or near water features, such as a pond or pool.
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Rule #7: Don’t Unfairly Target Children in Site Rules
Disputes over the site’s rules—or the way the rules are enforced—can
lead to fair housing trouble based on familial status. Rules governing
residents’ behavior in common areas, such as hallways, parking lots, and
outside spaces serve a legitimate purpose—to safeguard property and
ensure safety. But you may face a discrimination claim if your rules
unreasonably target children or limit their behavior.
As much as possible, avoid adopting rules that specifically target
children’s behavior. Rules banning children from playing in common
areas—or requiring adult supervision on all children under 18—could
lead to accusations that you’re treating families with children less
favorably than adult households living at the site.
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Rule #7 (con’t): Don’t Unfairly Target Children in Site Rules
In one case, a court addressed whether a California site’s rules amounted to
discriminatory statements based on familial status. Among other things, the
rules allegedly stated, “Please keep children under control at all times. It is not
the responsibility of the Manager or other tenants to babysit them.” The court
agreed that the rule explicitly treated families different than adults-only
households: Members of adults-only households were not required to be
“under control” at all times, nor did the rule require tenants to keep adult
guests “under control.” The court found that the rule targeted only families
with children, but that further proceedings were needed to consider the
owners’ alleged reasons for adopting the rule: to inform tenants that they were
responsible for their child’s safety, and to avoid potential liability that could
arise when tenants’ children, who were unsupervised, were injured or caused
property damage [Blackington v. Quiogue Family Trust, April 2013].
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Rule #7 (con’t): Don’t Unfairly Target Children in Site Rules
Even if you adopt rules that govern all residents—not just
children—you could still face a discrimination claim if you
enforce the rules only against children. Singling out children for
breaking the rules against noisy behavior in common areas, but
ignoring similar transgressions by adults, could lead to a fair
housing claim based on familial status.
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Rule #8: Don’t Discriminate Against Residents for Adding a Child to
the Household
Think twice before taking steps against residents for adding one or
more children under 18 to the household. Fair housing rules banning
discrimination based on familial status apply not only to families with
children under 18, but also to pregnant women and others who have
or are in the process of adopting or obtaining custody of a child.
Consequently, it’s unlawful to discriminate against a resident who has
a baby, adopts a child, or takes custody of grandchildren. As long as
the unit is large enough for the family under applicable occupancy
limits, you could face fair housing liability if you evict them, refuse to
renew their lease, or insist that they move to a larger unit.
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Rule #8 (con’t): Don’t Discriminate Against Residents for Adding a
Child to the Household
In general, a new household’s composition should not be changed
within the first six months of its initial lease without recertifying the
household, unless the change was unforeseen at the time of move-in
or was due to an extenuating circumstance. Intentionally understating
or overstating the number of household members in order to meet a
particular income limit is an act of fraud that will result in a finding of
noncompliance.
However, a recalculation is not required for the move-in or move-out
of a dependent child, dependent student, or unborn child, who can be
added or subtracted from the household at any time.
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Follow Eight Rules to Avoid 'Familial Status' Discrimination