Fair Housing Discrimination and Harassment Regulations Could Apply to HOAs!

With HOA homeowners—some matters can be contentious—and the board is often the target.  But what if the dispute is between neighbors? Can’t the HOA just stay out of it?  

That depends. The HOA may need to act.  Here’s why:  Recent FHA regulations from HUD RIN 2529-AA94 have made it potentially easier to prosecute for harassment in a housing context.

Two respected Dallas attorneys who specialize in HOA matters have provided the following informative blog article to help association boards avoid potential pitfalls by keeping harassment in housing on your radar.

 Association Liability for Third Party Harassment

Superheroes are a relatively new cultural phenomenon, usually consisting of an individual possessing superhuman abilities and using that power to fight crime and protect the public from evil. The Department of Housing and Urban Development, or “HUD,” revised its fair housing regulations to address discriminatory harassment in housing practices. Those revisions impose liability upon persons and entities who fail to act as a “superhero” by stepping in to stop “evil” discriminatory harassment by a third party where the person/entity possesses the “superpower” to do so.

24 CFR 100.600(a)(2) defines “hostile environment harassment” as:

“unwelcome conduct that is sufficiently severe or pervasive as to interfere with: The availability, sale, rental, or use or enjoyment of a dwelling; the terms, conditions, or privileges of the sale or rental, or the provision or enjoyment of services or facilities in connection therewith; or the availability, terms, or conditions of a residential real estate-related transaction.”

The harassment must be based upon race, color, religion, sex, handicap, familial status or national origin. Discrimination occurs where the harassment causes the person to vacate the dwelling, to abandon efforts to reside in the dwelling, or has the effect of denying or limiting services in connection with the sale or rental of a dwelling. For example, if such harassment causes a resident to cease using the community pool to avoid the harassment, it may rise to the level of discrimination under the fair housing regulations as it denies or limits services to that resident.

Section 100.7 imposes direct liability on a person/entity for, among other things, failing to take prompt action to correct a discriminatory housing practice (including hostile environment harassment) where the person knew or should have known of the conduct by (i) that person’s employee/agent or (ii) a third-party where the person had the power to correct it.

If a resident is subjected to severe or pervasive harassment on the basis of one of the protected classes above (such as race), an association could be liable for failing to address the discrimination if the association knew or should have known of the conduct. The association’s liability is rather clear where the discrimination is created by the association’s employee or agent, such as the association’s property manager. In that instance, the association has the power to fire the employee or change property managers/the property management company. However, under the new HUD regulations, the association could also be liable for harassment by a third party, unrelated to the association, but only if the association had the power to take corrective action.

When might an association have the power to take corrective action against a resident for such discrimination? In responding to public commentary, HUD recognized that associations generally have the power to take corrective action by imposing the penalties authorized by the governing documents or legal authority. HUD notes that the new regulations “merely require] the community association to take whatever actions it legally can take to end the harassing conduct.”

Some associations have regulations that dictate “community etiquette,” such as rules that specifically prohibit harassment of directors, officers and other residents. In those instances, the association arguably has the power to take corrective action, in that the association has the power to treat harassment as a violation of the restrictive covenants. It is less clear whether an association has the power to correct the discrimination when the restrictive covenants merely prohibit “nuisances” and “annoyances.” Based upon HUD’s commentary, if the governing documents are completely silent as to any restrictions on behavior of residents, it appears the association has no power to act on hostile environment harassment.

Nearly all associations have encountered some version of a neighbor-to-neighbor dispute. These disputes rarely rise to a level of hostility that could be described as harassment, and even fewer involve “hate speech” and similar actions. However, these situations unfortunately do occur. Associations should treat any reports of harassment based upon a protected class seriously, even more so in light of the new HUD regulations and the potential for liability for those third party actions.

Investigate complaints of harassment to determine if the harassment may be discriminatory in nature. If such harassment is so severe and pervasive as to create a hostile environment for the targeted resident, the association should take any and all action authorized by its governing documents to stop the harassment. If the association fails to act where it had the power to do so, the association could be subjected to liability under the federal Fair Housing Act for third party harassment.

Thanks to our expert contributors for sharing this blog article.

Dean A. Riddle is the founding shareholder of Riddle and Williams, P.C.  and concentrates his practice on community association law and commercial litigation.  He provides legal services to property owners’ associations, their board of directors, and developers in all types of legal matters.  






A graduate of the SMU law school, Julie Dupont joined Riddle and Williams, P.C. in 2006 and practices law related to property owners’ associations.