Atlanta Condo Association Charged with Discrimination

According to a July 30th, 2009 news release from the U. S. Department of Housing and Urban Development (“HUD”) a metro Atlanta condominium association, real estate company, and a real estate agent are being charged with discrimination against families with children.

The Fair Housing Act prohibits discrimination in providing housing, unless the provider falls within specific requirements for housing for older persons. It is this exception that allows for age-restricted communities.

Age-restrcticted communities must have the requisite covenant provisions and satisfy other requirements to allow discrimination against occupants of the housing that are under the 55 or 62 age cutoffs, as provided in the enabling Acts and HUD requirements that deal with age-restrictions. When it comes to trying to age-restrict a community, it is incredibly important to follow the rules so that this type of situation does not happen.

HUD investigated allegations that the condominium had a policy of excluding children, with the help of Metro Fair Housing Services, Inc. (a HUD-funded fair housing agency). The charges state that the real estate agent was attempting to sell a condominium unit with a condition that the pruchaser may not have children.

Metro Fair Housing Services, Inc. sent testers to inquire about the unit for sale. It is common practice for HUD to use testers to investigate discrimination claims. When testers let the agent know that they had children, the agent allegedly refused to show the unit and told them that no children were allowed.

According to the HUD press release the agent also admitted that several prospective buyers with children had expressed interest in the property and she told them that children were prohibited. The unit at issue was eventually shold to a single woman who had no children.

At this point the case may be heard by an administrative law judge or the parties may elect to have the hearing moved to Federal court. The administrative law judge has the ability to award damages if he/she finds that there was indeed discrimination, award attorney’s fees, and can order injunctive relief (or other equitable relief) to stop further discrimination from happening, and finally, civil penalties. If the case is moved to Federal court, the all of the previous remedies are available, plus the judge may award punitive damages. These are potentially significant damages the association, real estate company, and agent are facing.

By Amy H. Bray, a partner/shareholder in our Commercial Real Estate Department.