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Proposed Federal Rule Change Has Property Managers Feeling Anxious

Landlords Liable for Residents' Discrimination?

By | Thursday, October 27, 2016

Real concern is spreading among rental property managers and owners over a proposal that would hold them liable if they failed to stop their tenants from harassing other tenants who are protected by anti-discrimination legislation.

The federal Department of Housing and Urban Development rule could be enacted as early as this fall. What has landlords worried is hearing that they would be held responsible for failing to stop housing discrimination action against a protected tenant – even if they didn't know the action had occurred.

No need to panic, according to HUD, which states that the rule is only a clarification of an existing policy. And since it doesn't call for any new duties on the part of landlords, HUD states that it “adds no additional costs to housing providers and others engaged in housing transactions.”

The background is that, under the Fair Housing Act, people already are protected from discrimination based on race, color, national origin, religion, sex, disability or familial status. The clarification then, according to HUD, is that they have the right to be protected from all discrimination they encounter in housing, not just discrimination from landlords and property managers.

“...(I)n HUD’s experience, there is significant misunderstanding among public and private housing providers as to the circumstances under which they will be subject to liability under the Fair Housing Act for discriminatory housing practices undertaken by others,” the proposal explains.

Prohibited actions aren't limited to the refusal to rent or sell a home to someone in a protected class. Discriminatory comments, gestures, signs or images toward protected persons are also prohibited.

But what's most notable about this clarification is that it states that discriminatory actions by non-agents of the landlord, such as other tenants, are the landlord's responsibility.

"It may include the use of racial, religious or ethnic epithets, derogatory statements or expressions of a sexual nature, taunting or teasing related to a person’s disability, or threatening statements. In addition, the unwelcome conduct may be communicated to the targeted individual in direct and indirect ways. For example, the unwelcome conduct may involve the use of email, text messages, or social media,” the proposal states.

National housing associations have registered their concern, according to "The Wall Street Journal. Those associations said that HUD would be putting landlords in the middle of neighbor disagreements. Landlords don't have the resources to monitor their tenants' potentially discriminatory actions, they said, and they worry that landlords would be held liable for harassment that occurs between tenants who may be away from the rental property when the harassment occurs.

The recommendation from HUD is that landlords reduce the potential for discrimination by establishing anti-discrimination standards and making them clear to all tenants, HUD says..

“This should facilitate more effective training to avoid discriminatory harassment in housing and decrease the need for protracted litigation to resolve disputed claims,” according to HUD.

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