Bill Morris in Legal/Financial on March 28, 2019
Most co-op and condo boards are aware of the dangers of discriminating against protected classes – based on age, race, sexual orientation, and numerous other factors – when vetting potential buyers and subletters of apartments. A new ruling by the U.S. Court of Appeals for the Second District has added a potentially devastating new danger: boards may be held liable under the Fair Housing Act if they fail to address racial discrimination between residents of the building.
In the case of Francis vs. Kings Park Manor, Inc., Donahue Francis, a black tenant at a Long Island rental property, was subjected to what the court called “a brazen and relentless campaign” of racial abuse by a fellow tenant named Raymond Endres, including harassment, repeated use of the N-word, and at least one death threat. Francis, fearing for his personal safety, contacted the police and the landlord several times. The landlord and management did nothing other than advising Francis to continue calling the police.
The Court of Appeals stated that in the event of such unacceptable behavior by tenants, courts will consider that “housing providers ordinarily have a range of mechanisms at their disposal to correct discriminatory tenant-on-tenant harassment, such as issuing and enforcing notices to quit, issuing threats of eviction and, if necessary, enforcing evictions.” These are, the court stated, “powerful tools” available to housing providers to curtail harassment. The court added: “With the objective of building a racially integrated society in mind, it would make no sense for Congress to require landlords to rent homes without regard to race but then permit them to harass tenants or turn a blind eye when tenants are harassed in their homes because of race.”
“The accepted wisdom has been for co-op boards not to get involved in disputes between residents,” says attorney Michael Manzi, a partner at Smith, Gambrell & Russell. “This court has said, no, under the Fair Housing Act, boards are responsible for discriminatory acts by one resident against another. Boards can’t sit on their hands and do nothing, and that’s what makes this a big deal.”
“This ruling is major,” adds Dona Kahn, of counsel with the law firm Anderson Kill, who runs training sessions for co-op and condo boards on issues of harassment, discrimination, and diversity. “It’s the first time the U.S. Circuit Court has held that if a board or a landlord knows about harassment – or should have known about it – they must take action.”
Kahn advises all boards to take immediate steps. “First, they should put in place a specific person who residents can report such incidents to,” she says. “They should also review their bylaws and revise them to come into compliance with this case. And they should train their staff once a year on how to deal with all kinds of discrimination.”
The ruling leaves boards open to punitive damages, which can be crippling. To protect themselves, Kahn advises boards to take specific steps. “If they hire an outside person to investigate such complaints, they’ll be protected against punitive damages,” she says. “Punitive damages require a ‘reckless disregard’ for the law, and by hiring an investigator, a board will protect itself against charges of recklessness.”
Deborah Koplovitz, a shareholder at Anderson Kill, adds that the Francis case carries a lesson for every co-op and condo board: “The lack of response by that [Kings Park Manor] landlord should be an example of what not to do in these situations.”
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