Boards Have a New Obligation to Stop Discrimination

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What’s the Fair Housing Act?

The Fair Housing Act protects people from discrimination. HOAs are “housing providers” under the Act - they may not discriminate against certain classes of people. Associations who do discriminate risk lawsuits and large fines.

Few associations discriminate on purpose, but some HOAs break the law by accident. The most common Fair Housing violations involve:

  • Making rules that target children
  • Refusing to bend parking rules for the physically disabled
  • Harassing the mentally ill

For more on the Fair Housing Act and HOAs, look here.

What are the New Rules?

In 2016 the government changed some of the rules for housing providers. The new rules say:

a person is directly liable for "failing to fulfill a duty to take prompt action to correct and end a discriminatory housing practice by a third-party, where the person knew or should have known of the discriminatory conduct."

Under these rules, associations must step in when a “third party” discriminates against one of its members. Examples might include:

  • Disputes between homeowners. If one member discriminates against another member, the association must act.
  • Disputes between vendors and homeowners. If an employee or contractor discriminates against a homeowner, the association must act.

In the past, the Act said only that boards must not discriminate. Now, the Act requires that boards prevent others from discriminating.

What Should Boards Do?

The new rule has confused a number of associations and management companies. In some places, managers have told boards to intervene in any dispute that involves a protected class (a very broad group). We feel that this advice is too extreme.

Instead, many association attorneys believe that a board must intervene only when there is evidence of discrimination. Of course, boards must still respond to nuisance complaints. But the Act applies only when there is discrimination.

With this change, boards should be cautious when they learn about problems between owners. If the problem involves discrimination against a protected person, the Act demands that boards step in.

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