The Fair Housing Act (FHA) has been on the books for decades. Professional apartment community owners know the law and we train our employees to follow the law. Providing housing in a non-discriminatory manner is not just required by the FHA, it makes good business sense: we want all qualified applicants to move into (and then to renew their leases at) our communities.

The U.S. Department of Justice (DOJ), the U.S. Department of Housing and Urban Development (HUD), along with various state, county, and city agencies, enforce the FHA. Periodically, there are reminders about what can happen when the FHA is not complied with. For example, in November 2009, the Justice Department announced that it obtained the largest monetary payment ever obtained by the DOJ to settle a case of alleged housing discrimination in the rental of apartments. Los Angeles-based apartment owner Donald T. Sterling agreed to pay $2.725 million to settle allegations of discrimination against African Americans, Hispanics, and families with children.

Specifically, the lawsuit alleged that Sterling, his wife and the Sterling Family Trust deliberately engaged in discriminatory renting practices targeted at tenants and prospective tenants who were not of Korean descent. The DOJ presented evidence that Sterling’s employees prepared internal reports that identified the race and/or national origin of tenants at properties that the defendants had purchased in certain sections of Los Angeles. There was also evidence that the defendants made statements to their employees indicating that African Americans and Hispanics were undesirable tenants.

Under the terms of the settlement, which were memorialized in a consent order:

  • The defendants would pay a $100,000 civil penalty to the United States;
  • The defendants would pay $2.625 million into a fund that would be used to pay monetary damages to persons who suffered discriminatory treatment as a result of the defendants’ conduct. The remaining balance would be used for further FHA education in the Los Angeles area;
  • The defendants would be enjoined from discriminating on the basis of race, national origin or family status;
  • The defendants would be required to implement a self-testing program over the next three years to monitor employee compliance with the FHA;
  • The defendants would be forced to maintain non-discriminatory practices and procedures; and
  • The defendants and their employees would be forced to undergo fair housing training through an independent contractor.

Management should always want to get it right. This is what can happen if something goes seriously wrong.  

Just A Thought.