What are a Landlord’s Rights When Facing a Human Rights Complaint from HUD or a Subsidiary?

It is not uncommon for residential tenants to find themselves at a disadvantage when entering a lease agreement and renting residential property from a landlord. Often, the tenant is not sophisticated in real estate law or the relevant laws of the jurisdiction governing landlords and tenants. Additionally, in the past, landlords were not prohibited from discriminating against certain minorities or protected classes of people when leasing their property, which compounded these problems. After the passing of the Civil Rights Act in the 1960s, the Department of Housing and Urban Development (“HUD”) implemented measures under the Fair Housing Act, 42 U.S.C. § 3603, whereby someone who alleges they are the victim of discrimination by their landlord can file a complaint with HUD or the local subsidiary human rights commission. As with any complaint, the veracity of the allegations can vary. As such, landlords need to understand what is expected of them and how to respond if they are ever faced with such a complaint.

How a Complaint is Filed

Anyone who has been or will be harmed by a discriminatory housing practice based on his/her race, color, sex, sexual orientation, gender identity, religion, national origin, disability, marital status, or age may file a charge of discrimination when (1) the alleged discriminatory act occurred during the past 365 days and (2) the dwelling or housing where the alleged event occurred is located in the County where the local HUD office is located. The complaint must be filed within one (1) year of the alleged discriminatory act, or the ability to file such a claim is forfeited. Although this blog focuses on residential leases, activities that may involve discriminatory housing practices include renting or buying a dwelling, obtaining a mortgage, or engaging in other housing-related activities.

Based on the facts obtained during the initial evaluation of the allegations, the local HUD office may decide that the complaint is unsubstantiated, or it may file a formal charge of discrimination against the property owner, property manager, developer, real estate agent, mortgage lender, homeowners’ association, insurance provider, and others who affect housing opportunities. Please note a charge filed with the local HUD office is not a lawsuit and HUD does not accept or investigate anonymous complaints.

How the Landlord is Notified and the Steps that Follow

After the complaint of discrimination is filed and formal charges are brought, the landlord is notified via certified mail of the complaint. The service of process is similar to when a lawsuit is filled.  Once the complaint is served upon the landlord—now referred to as the respondent—the clock for responding begins.

The notice of the complaint filed will contain (1) a copy of the complaint stating the alleged discriminatory act, (2) a letter advising the landlord of the complaint and the deadline to respond, and (3) a request for information. Information sought by the investigator assigned to the complaint may include, but is not limited to:

• A written statement from the respondent addressing the allegations and the respondent’s opinion of same
• Copies of all documentation on file related to the tenant, including leases, background checks, emails, letters, et cetera
• A copy of the respondent’s fair housing policy (if any)
• A copy of the tenant’s rental application
• Copies of rent rolls for the tenant
• Any additional documentation that could help substantiate the respondent’s position

HUD will also ask for a time to interview the respondent as a part of the investigation to question the respondent directly. The interview cannot be avoided, but it is recommended that the respondent seek experienced legal counsel to attend the interview and defend the respondent, if necessary. It should also be known to landlords that the steps of investigating such a complaint will not be shared by HUD with the Respondent.

Results of the Investigation

Once the investigation of the complaint is concluded, HUD or its local office shall determine whether reasonable cause exists to believe that a discriminatory housing practice has occurred or is about to occur. If a finding of reasonable cause is made, the finding must be provided to the respondent within twenty (20) days of the finding. Once service of the charge is received by the respondent, the complainant and respondent have twenty (20) days to elect to have the claims asserted decided in a civil action in circuit court; otherwise, the claim will be heard in an administrative hearing. If civil trial is elected, HUD counsel or local general counsel for the municipality must file a civil action no later than thirty (30) days after the election is made.

If an election to have a civil trial on the charge is not made, HUD shall provide a hearing on the charge. After the hearing, the Commission shall review the Hearing Officer’s recommended order and the record and then issue its final order within thirty (30) days of its receipt of the recommended order. Any party to the complaint can petition for judicial review of the HUD’s final order. The standard of review is a finding that the order is not supported by substantial competent evidence and/or the proceedings conducted did not comply with the essential requirements of law.

Exposure

If, after the hearing, it is determined that the respondent has engaged in or is about to engage in a discriminatory housing practice, it may order “appropriate relief”, which may include actual damages, equitable or injunctive relief, and reasonable attorneys’ fees and costs. HUD may assess a civil penalty against the respondent “to vindicate the public interest,” if the respondent has not been adjudged by order of the Commission or a court to have committed a prior discriminatory housing practice prior to the date of the filing of the charge, which shall not exceed $10,000.

Conclusion

Landlords should always act in accordance with the Fair Housing Act when leasing their property. However, should a landlord ever be faced with a complaint as described within this blog, it is imperative to consult an experienced attorney to assist in navigating the investigation process. If you are a landlord dealing with tenant complaints and need assistance, the experienced attorneys at Jimerson Birr are more than ready to help.