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Most rental property owners (Owners) are subject to federal, state, and local anti-discrimination housing laws. When an Owner receives notice of a complaint alleging violations of these laws, it is important to take the complaint very seriously. There are significant business, financial, public relations, and personal risks involved with a fair-housing complaint.

The most critical part of an Owner’s response to a fair-housing complaint is immediately engaging legal counsel with experience in defending against these types of complaints. It is never a good idea for Owners to try to go it alone when faced with a fair-housing complaint. An Owner can find themselves spending more time, more money, and ending up in an overall worse position than if they had retained experienced counsel.

One way these complaints arise is for an applicant or resident to submit a complaint to the appropriate government agency. At the federal level, that’s HUD. At the state level in Ohio, it’s the Ohio Civil Rights Commission. At the local level, using Dayton as an example, it’s the Dayton Human Relations Council. The process typically begins with the complainant contacting one of these agencies and submitting a written complaint. Sometimes, the agency may assist the complainant in reducing their allegations to writing.

Another way the process may start is with a government agency initiating its own complaint, based on alleged violations the agency claims it has discovered in the course of its operations. One common type of alleged violation involves discriminatory advertising by the Owner, which the agency finds in a publication or online. Another common type involves allegedly discriminatory interactions between the Owner and a person who is associated with the agency and poses as someone interested in renting from the Owner. These people are known as “testers.”

A tester either will be a member of a protected group or will pose as one, such as by claiming the need for a support animal due to an alleged disability. The tester typically will work with another person, who is not a member of a protected group. Both individuals will interact with the Owner, with direction from the agency, to test whether the Owner treats the tester differently from the person not from a protected group. If the agency believes the answer was “yes,” then it will file a fair-housing complaint against the Owner. You may be thinking, Can they really do that? The answer is they absolutely can, and they do.

Another way the process may start is when an applicant or resident seeks assistance from a local fair-housing organization (FHO), which helps the individual file a complaint against the Owner with one of these government agencies. The stakes get higher for the Owner when an FHO gets involved, because the FHO can file its own complaint against the Owner based on the assistance the FHO provided to the individual complainant. This scenario can lead to two fair-housing complaints against the Owner – one by the individual and one by the FHO – based on the very same set of allegations. Both can seek damages and other relief, resulting in a potentially expensive double whammy for the Owner.

A final way the fair-housing complaint process may start is for an FHO to initiate its own complaint, based on alleged violations it claims to have discovered in the course of its operations. Owner advertising is a common source of complaints by FHOs. FHOs also can use their own testers, in the same manner discussed above with government agencies. Using testers is a tactic that is a favorite of FHOs.

Some of the risks presented by a fair-housing complaint include:

• Personal Liability – Owners and their individual representatives and employees can be named in their personal capacities in fair-housing complaints. Complainants commonly add to their complaints the Owner’s representatives and employees who were involved in the allegedly discriminatory acts. This is similar in many ways to being sued personally in court, and it is a risk that deserves the attention of anyone who works in the rental housing industry. Both the Owner entity and individuals named in a complaint should obtain counsel as a result.
• Money Damages – Most complainants in fair-housing cases are seeking some form of money damages from the Owner. Particularly when FHOs are involved, those damages may be well into the five figures, even at these initial stages of these cases. Often, these damages are subjective and not supported by much actual evidence. This can be very frustrating for Owners. To make matters worse, complainants’ damages demands often may increase as the case continues. Therefore, it is important for Owners to evaluate early resolution options, such as early mediation that is offered in these cases. An early mediation may be many Owners’ best option for resolving a fair-housing complaint as inexpensively and finally as possible. Mediation also is one specific part of these cases in which experienced legal counsel can be most helpful.
• Important Deadlines – When a complaint is served on an Owner, typically there will be several additional documents served with the complaint. Those extra documents usually will contain short deadlines that will not be readily apparent unless all the documents are reviewed carefully. (For example, deadlines that need to be calculated by the Owner as opposed to a specific date already listed.) Additionally, there is no guarantee that the agency representative assigned to investigate the complaint will grant extensions if deadlines are overlooked. It is not uncommon to encounter an investigator who is flexible with the complainant but very strict with the Owner when it comes to deadlines. Failure to meet deadlines can result in waiver of rights and increase the chances of a finding against the Owner and others named in the complaint.
• Anything You Say Can and Will Be Used Against You – It is a mistake for an Owner or their representatives to think anyone can talk their way out of a fair-housing complaint. Fair-housing laws set the rules regarding required investigation processes investigators must follow when an agency receives a complaint, so investigators’ hands are tied even when faced with a totally meritless complaint. Additionally, if you talk to an investigator on your own, they can and will use anything you say against you as part of their investigation. That evidence also can be used against you if there is litigation later on. This generally is less true when it comes to communications that occur through legal counsel; there is a layer of protection provided when legal counsel is involved. Therefore, legal counsel in fair-housing cases serves as an effective and important buffer between the Owner and investigators. Although it’s unfortunate, the reality is many investigators who Owners may encounter will have at least some bias toward the complainant. It’s important to understand that and to conduct oneself accordingly at all stages of fair-housing complaint proceedings. Also, if legal counsel is not involved to serve as the investigator’s contact and funnel communications through counsel, it is fair game for the investigator to reach out to an Owner’s employees and other representatives without the Owner necessarily being aware of it.
• Demands for Documents – The documents served with the complaint may include a lengthy list of documents the agency is requesting from the Owner as part of its investigation. Those requests typically will not relate just to the complainant or the specific allegations in the complaint. Instead, they often will extend to other applicants/residents, other properties of the Owner, and the Owner’s business practices and operations in general. An Owner quickly can find themselves dealing with a government agency and investigator who do not appreciate the volume of information being requested. Or worse, the Owner could be subjected to a fishing expedition for evidence of additional fair-housing-law violations, and possible violations of other laws. (Keep in mind that, especially at the local level, the same agency representatives an Owner may be dealing with in a fair-housing case also will be responsible for enforcing other laws as well.) Whatever the case, Owners without legal counsel often will find themselves having to produce far too much to an investigator, or being threatened with subpoenas if they fail to comply with the investigator’s requests. Most jurisdictions give their agencies some sort of subpoena power that can be used against Owners.
• Exposure to Retaliation Claims – This is a particularly touchy and dangerous issue. Current residents who file fair-housing complaints become protected by anti-retaliation laws. Therefore, current residents present unique risks, because any interaction with them after a complaint is filed can be a basis for allegations of unlawful retaliation. That may include maintenance requests, communications about overdue rent, and any other interactions with the resident. Legal counsel can assist the Owner in communications with the resident to mitigate the risk of allegations of retaliation. An Owner who continues to communicate with a complainant without consulting legal counsel is exposed to additional potential liability with every communication. (Note: On the subject of maintenance requests, untimely and/or unsatisfactory responses to maintenance requests for a resident who is a protected group are commonly part of the allegations in a fair-housing complaint. It is critical that Owners document their responses to these requests, if not doing so already.)
• Public Records Laws – Many documents associated with fair-housing complaints are covered by public records laws, which makes them accessible to the public. This can create a public relations problem for an Owner. Unfortunately, the public records laws also generally make even settlement agreements accessible to the public. Therefore, even if a complaint does not become publicly known, an Owner may enter into a settlement agreement that is uncovered by third parties. If those third parties are other residents and/or FHOs, they may see the Owner as an easy mark and a target for future fair-housing complaints. Thankfully, there are certain strategies that experienced legal counsel can implement to help Owners prevent unfettered disclosure of at least settlement agreements in fair-housing cases.
• Continuing Compliance Obligations – A key part of settlements in fair-housing cases is non-monetary terms. These usually will require an Owner to take certain actions and confirm fair-housing-law compliance with the agency that handled the complaint. These terms may require the Owner and their representatives/employees to attend fair-housing training, send fair-housing-law notices to residents, update application and lease forms, and other such things. They also will give an agency continuing jurisdiction to regularly check an Owner’s compliance with fair-housing laws. These types of terms can result in a lot of extra work and ongoing contacts between the Owner and agency, which may last several months or even years. The good news is that these terms often can be negotiated during settlement discussions, if they are handled the right way, to reduce the Owners’ ongoing obligations.
• Kangaroo Court – After the investigation phase has concluded and a determination is rendered on a fair-housing complaint, the default next phase involves moving to a hearing before the very same agency that investigated the complaint. What do you think the chances are that hearing officers who work for the same agency as the investigator will go against the investigator’s findings? An Owner determined to fight a fair-housing complaint quickly may find this situation untenable. Many jurisdictions offer the alternative of going to court, which typically is better from a fairness perspective. However, business entities typically cannot represent themselves or even appear in court without a lawyer. Therefore, employing legal counsel to defend against a fair-housing complaint gives an Owner the option to avoid kangaroo court and head to actual court to continue defending against a complaint. To be clear, many fair-housing complaints are defensible, and an Owner may prefer to incur costs associated with defending against a complaint rather than paying a settlement on a complaint they view as meritless. Going to court to do that can be a very effective option, but it takes experienced legal counsel to do it the right way.

This list of risks set forth above is not all inclusive, and it still may be overwhelming for Owners reading this. The good news is there are numerous strategies Owners can implement to reduce their chances of being subject to a fair-housing complaint (particularly complaints generated by the use of testers), and to increase their chances of successfully defending against complaints filed against them. It is recommended to contact legal counsel well-versed in fair-housing laws and experienced in defending against fair-housing complaints to further discuss these strategies. Owners definitely take on many risks if they try to go it alone in these cases.