Since 1968, the Fair Housing Act has both protected the rights of individuals seeking a home and simultaneously given landlords and property managers a code of ethics with which to conduct business.  This policy has been modified to cite specific groups of people who should not be discriminated against, as well as provide guidance as to what may constitute taking improper adverse action against an applicant for reasons beyond your requirements to gain housing.  Now taking a new step in this guidance, HUD is formalizing rules that follow a national standard for determining whether a housing practice violates the Fair Housing law based on an unjustified discriminatory effect.

As this will set a formal process for which all claims of discrimination will be tested for their validity, here, I will break down this new HUD rule into what I call, The 3 Part Burden Shift, for your convenience:

1. The Accusing Proof – This first requirement states that the plaintiff (your applicant) must present their prima facie case (first show of evidence), demonstrating where the policy of the landlord has, or would predictably result in, discrimination.  They must prove this on the basis of what classifies one or multiple areas of a protected class.

2. The Defendant’s Rebuttal – Should the plaintiff prove that they have substantial evidence for their case, the burden shifts on to the landlord to provide reasoning behind the necessity for their policy.  This policy should display clearly why the practice in question should remain required, and have supporting evidence to reaffirm that it is of substantial, legitimate, and non-discriminatory interests.

3. The Plaintiff’s Last Stand – If the landlord can present their case for retaining the questioned policy as part of their requirements, it becomes the plaintiffs duty to establish liability.  The plaintiff must prove that the practice in question could be better served by one that has a less discriminatory effect.  Should the plaintiff fail, the case will be dismissed in favor of the landlord.

Here’s one example of HUD’s new ruling in effect: If an applicant is part of the minority who does not have full citizenship in the United States (a green card holder), and your policy defines that you require two forms of valid, state issued ID – the applicant may file a fair housing complaint based on their race or national origin.  They would site that they were rejected due to not producing the state issued ID’s (the accusing proof). Your rebuttal would be that is it your policy to verify all residents based on that form of identification and that all applicants receive the same requirement (the defendant’s rebuttal).  Once this fact is proven, the applicant may shift the burden once again to file a claim that your policy should be modified to allow other forms of identification be acceptable for those who are legally employed, but not legal citizens (Plaintiff’s Last Stand).  Despite that this is (of course) an unlikely situation to occur to these extents, it outlines the general flow that will now be followed by courts nationally.

While the rules of Fair Housing remain unchanged with regards to respecting the rights of protected classes – race, color, religion, sex, handicap, familial status, and national origin – this new standard can help to protect landlords from frivolous lawsuits from disgruntled applicants.  For more information about HUD and this new policy, please visit www.hud.gov

Read the full ruling here: Fair Housing Act’s Discriminatory Effects Standard

About the Author

Ryan Green headshotRyan Green has been working within the real estate and property management industries since 2005, and presently serves as the Marketing Manager for CIC. He holds a degree in Business Administration as well as FCRA and Experian certifications. When not passionately educating the industry about tips and trends he enjoys traveling, and visiting craft breweries.

Leave a Reply