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August 14, 2005
The Department of Fair Housing May be on the Prowl- Watch Your Rules!
Do you have rules singling out children? Rules that may discriminate against any of the protected classes? A local (California)law firm recently sent around an alert. One of the Associations represented by the firm apparently received a letter directly from the Department of Fair Housing about rules of the association. The Association was accused of discriminating against children. A rule as simple as "Children are not allowed to play in the common area" can get an Association in trouble. It suggested by this firm that the Department of Fair Housing has resorted to "surfing" the web for such rules. A simple google search for the word "children" could turn up thousands of Association sites and the offensive rules.
A few years ago, legislation was introduced by Senator John Burton, a powerful legislator, and it passed into law, that requires California Associations to remove all discriminatory language from the governing documents (which include rules). [SB 1148] Since that time, knowledgeable California attorneys have encouraged Associations to get their governing documents reviewed. Clauses or rules like that stated above may seem harmless to some Boards that are dealing with out-of-control children; however, the language can lead to discrimination claims. Clauses that prohibit renting to persons other than "single families" or that limit occupancy to a "single family", adopted because of an experience with 12 people living in a 2 bedroom condo may seem harmless but can lead to a discrimination claim. A simple change of a rule to state "There is no playing, climbing trees, bike riding or ... in the common area" is more easily defensible because it applies across the board, from children who want to dig in the dirt, to thirty-somethings who want to toss a frisbee or football in the common area. A change from "Owners are responsible for the conduct of their children" to "Each Owner is responsible for the conduct of their family members, tenants ... etc." is a simple way to get the results wanted with alternate language that will not trigger a discrimination claim. So, Boards do not have to give up on reasonable rules, they just have to think differently (try the perspective of minimizing risk of legal action against the association - which should be a part of any risk assessment analysis conducted by a Board).
An Association can be held guilty of discrimination simply for failure to remove discriminatory language. Check out http://www.californiacondoguru - for more on this -and review articles and FYIs on this topic. At the height of discussion on this - around the time the legislation was proposed and for a year or two thereafter, there were a lot of alerts sent out and many Associations did send in the documents to attorneys and receive letters for their files either blessing the documents or outlining the appoach to take with regard to potentially discriminating language. But after the initial storm of interest, the volume of review projects dropped off to nothing. Perhaps because there was no ongoing alert of this problem. Perhaps managers dropped this from the checklist of possible document issues for Associations, perhaps Boards became resistent to paying legal fees for the review and letter. Some advised that Boards could wait until an Owner or resident, or the City or County sent a letter about the language, and assumed they could clean it up before the Department of Housing got involved. The statute allows a Board 30 days to get rid of the language once notice is given.
However, times change. This year AB 394 was introduced in California because the legislator introducing it does not feel that the Burton Bill resolved the issue of eradicating discriminatory language in CC&Rs. If this bill passes, Owners will be able to strike language from CC&Rs and rerecord them, thereby superseding prior documents and rendering them null and void. Common Interest Developments are excluded but it still applies to any CC&Rs for developments that do not have an Association. Absolutely, this carries with it a number of serious problems if an Owner can disrupt the priorities established for CC&Rs, but aside from that, it illustrates the desperation of legislators to eradicate discriminatory language from CC&Rs. This recent move by the Department of Fair Housing, if it is true, may have been triggered by this renewed interest in removal of discriminatory language in CC&Rs.
Now, if it is true that the Department of Fair Housing has people "surfing the web" for potential violations, it is time to put this back on the "top burner" and keep it there, until your association has been "blessed". I realize it seems a bit self-serving for an attorney to be encouraging Boards to seek a legal "review", but truly, it is worse to be caught with your pants down! Defending a discrimination complaint is much more expensive and frustrating than taking care of business up front that needs to be taken care of. Since more and more associations are publishing rules and regulations on the web for all to see (which by the way I am not in favor of), there is much more exposure to liability for an innocent oversight. And be advised that a complaint might come from an owner or tenant within the development, even if the Fair Housing Department does not find anything interesting on the web. And if your Association receives a complaint or request FROM ANYONE that suggests there is discriminatory language in any of the Association governing documents, get help from a knowledgeable CID attorney (don't go to your family law or estate attorney for this, or even a real estate attorney with no specific CID credentials!)immediately! This is serious business!!
Get thee to the website and check it out. If you read my blogs, you know I believe in preventive law. If you do not take measures to avoid a discrimination claim, and the Association does receive a Fair Housing Complaint letter, you will have to pay not only for a full review, and advice of what to correct, but also to defend and satisfy the Fair Housing Department requirements, which can be quite severe.
Posted by Beth Grimm at August 14, 2005 10:39 AM