California's Civil Rights Department (formerly the Department of Fair Employment and Housing) has broad authority to enforce California’s fair housing laws. A letter of inquiry or complaint from the Department may herald the beginning of an expensive legal problem for the association, its board of directors and the management company, all of whom may be identified as actual or potential respondents. (See Complaint Flowchart.)
Insurance carried by the association and the board may or may not provide a defense to these parties in the proceedings that follow. Even if the insurance carrier does pay for counsel for defense purposes, a complaint by Civil Rights Department (CRD) may well trigger a duty of disclosure on the part of the association, and if the CRD is successful in prosecuting a civil complaint, the actual damages, penalties, punitive damages and attorney’s fees that may be assessed against the association, board and management company may not be covered by insurance.
Complaints You Might See. Fair housing complaints are filed with the CRD by owners and tenants on a variety of grounds. These include:
The California Unruh Civil Rights Act. The Act prohibits discrimination on the basis of sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation.
The Federal Fair Housing Act of 1988 (42 U.S.C. Section 3601 and following) which bars discriminatory housing practices. These include discrimination by the denial of a dwelling to a person because of race, color, religion, sex, familial status or national origin. It further prohibits discrimination on these basis in the provision of services or facilities in connection with a dwelling. Discrimination is defined to include a refusal to make reasonable accommodations in rules, policies, practices or services, when such accommodations may be necessary to afford such person equal opportunity to use and enjoy a dwelling. (42 U.S.C. Section 3604.) The statute further prohibits discrimination by refusing to allow a handicapped person, at that person’s expense, to make reasonable modifications of existing premises necessary to afford full enjoyment of the premises.
The New Regulations. On October 7, 2011 new regulations became effective to guide CRD procedures. See California Administration Code, Sections 10035-10066. Certain changes made by regulations which facilitate the CRD administrative process include the following:
Complaints of discrimination may be filed electronically, in which event they do not need to be signed despite the fact that complaints are required to be verified. (Sections 10035(a) and 10035(a)(10)-(11).) The latter subsection states that electronically filed complaints are deemed to be signed under penalty of perjury. Complaints may be filed on the CRD website. (Section 10035(c).)
Although by statute complaints must be filed within one year from the date upon which the alleged unlawful practice occurred, the regulation creates a limited exception when the complainant cannot sign a complaint before the statute of limitations runs, in which case the Department will file an unsigned complaint and date-stamp it received before the statute of limitations runs and subsequently receive a signature on the unsigned complaint. (Section 10035(c).)
Statutory Reform. In 2017, the California Legislature adopted Senate Bill 1038 which made further changes to the CRD in an effort to modernize its operations. Beyond administrative reshuffling, the law allows the CRD to file cases in the Superior Court of California (Gov. Cod. Section 12981(a)) against parties alleged to have violated the fair housing laws, but requires mandatory dispute resolution (Gov. Cod. Sections 12965(a) and 12981(a)), free of charge to the parties, before litigating. The statute authorizes the CRD to obtain reasonable attorney’s fees and costs, including expert witness fees (Gov. Cod. Section 12989.2), if it is the successful party in the litigation. Attorney’s fees awarded to the CRD in litigation will be placed in a special fund to support the operations of the Department in addition to its funding through the Legislature. New regulations will be adopted to implement the changes in DFEH resulting from Senate Bill 1038.
Traps to Avoid. The CRD issued most housing accusations in the calendar year 2011 based on disability and familial status. Directors must be attentive at all times to policies and actions that may run afoul of federal and state law that prohibits discrimination on these grounds.
As noted, federal and California law, associations must provide “reasonable accommodations” to the disabled to allow the resident to have full use and enjoyment of the property. Disability is defined as a physical or mental impairment that limits a major life activity. The definition includes not only persons with a present impairment, but those who have a record of such, or who are regarded as having such an impairment that may become a future disability, although not presently disabling. (Government Code Sections 12926 and 12926.1.) These definitions are broadly construed. Major life activities include physical, mental and social activities, as well as working. Chronic or episodic conditions are covered as disabilities. A few examples of physical and mental disabilities recognized by the CRD include heart disease, multiple sclerosis, HIV-AIDS, cerebral palsy, post-traumatic stress disorder and clinical depression.
In general, the law requires an accommodation when it imposes no fundamental alteration to the nature of the program or undue financial or administrative burdens. For example, if a mobility impaired resident has a van with a wheelchair lift that cannot operate in the garage due to physical constraints, it would be a reasonable request for that resident to be granted an accommodation for parking in a nearby common area parking space despite restrictions or rules that would otherwise prohibit granting such a permit. A good discussion of the reasonable accommodation duty can be found in the joint statement of the Department of Housing and Urban Development and the Department of Justice dated May 17, 2004: "Reasonable Accommodations Under the Fair Housing Act." The Department of Housing and Urban Development and Department of Justice have issued a similar joint statement concerning the obligation of housing providers to grant reasonable modifications for the disabled.
B. Safety Rules
Restrictions and rules based on safety concerns often trigger complaints to the CRD. Boards are naturally concerned about potential lawsuits when children skateboard on sidewalks, play in the streets, climb trees and use recreational facilities unsupervised.
However, limiting the privileges and facilities associated with the dwelling because of familial status is a violation of federal and state law. Therefore a prima facia (on its face) case is established when rules treat children, and thus families with children, differently and less favorably than adults-only households. Such rules are illegal unless the association, board and management can articulate a legitimate justification for their existence. (United States vs.Badgett, 97 F. 2nd 1176 (1992).) In defending a rule on safety grounds, the association must show that it has a compelling business necessity supporting it, and that it is the least restrictive means used to obtain that end. (Fair Housing Council vs. Ayres, 85 F. Supp. 315, 318-19 (1994).)
Rules that contain absolute prohibitions against children under eighteen, such as those prohibiting use of recreational facilities and playing in streets in the common areas, are vulnerable to the challenge that they are not the least restrictive means to achieve the ends. (Plaza Mobile Estates vs. Oloff, 273 F. Supp. 2nd 1084 (2003).) As the court noted in Plaza Mobile Estates, age restrictions concerning use of common area facilities can be arbitrary and do not constitute the least restrictive means of achieving the health and safety concern. The court in that case went on to note that requiring adult supervision likewise can be arbitrary, specifically stating that prohibiting all children from walking around the park without adult supervision is overly broad regardless of the safety concern and stating that “there is nothing magical about the age of eighteen or fourteen years old if defendants’ concerns are for the protection of the health and safety of the children or other residents in using recreational facilities or the swimming pool or riding bicycles. Such concerns could be addressed with use of rules. Moreover, rather than being connected with such ages, bicycle and pool safety would be better served with a proficiency requirement.” The extensive case law in this area requires careful attention on the part of boards and their legal counsel in drafting cc&rs and implementing rules.
Conclusion. In conclusion, the new regulations may increase complaints against associations, boards and managers. The new statutory mediation procedure will provide an opportunity to settle fair housing cases on an expeditious basis. However, the power of the CRD to file civil suits if the mediation is unsuccessful creates new leverage on the part of the State of California against homeowners’ associations. While fair housing concerns have always been important, the changes at the CRD require extra diligence to avoid liability, particularly when an accommodation request is receive and when rules, regulations and restrictions are being considered that directly or disproportionately affect families with children.
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