The Fair Housing Act as a Limit on Restrictions Imposed by Associations
The Fair Housing Act ("FHA") prohibits either disparate treatment or disparate impact. For discriminatory treatment, an association must be shown to intentionally discriminate against a protected class. Disparate impact, however, does nor require proof of discriminatory intent. Even if a rule or restriction is nondiscriminatory on its face, if impacts a protected class differently than other classes, it may be found in violation of the FHA.
An association may impose certain restrictions upon its members and their individual lots, usually within the scope of the association's Declaration of Covenants. The Indiana Supreme Court was presented with one such restriction in light of the limitations of the FHA. See Villas West II of Willowridge Homeowners' Ass'n v. McGlothin, 885 N.E.2d 1274 (Ind. 2008). Villas West II of Willowridge Homeowners' Association ("Association") prohibited owners from leasing their properties. An owner leased her property in violation of the covenant. When the Association brought suit against the owner to enforce restriction, the owner counterclaimed alleging that the covenant violated the FHA.
The Supreme Court stated that insufficient evidence was presented to form a conclusion that the Association intended to discriminate against a certain class. The court then noted a prior decision by the 7th Circuit which listed four factors that would entitle an alleged victim to relief under the FHA: (1) the strength of the plaintiff's showing of discriminatory effect; (2) evidence of discriminatory intent; (3) defendant's interest in enforcing the covenant; and (4) whether plaintiff is seeking affirmative relief or simply a prohibition upon defendant's interference with individual property owners.
The Supreme Court rejected, however, the Seventh Circuit's four-factors test. Instead, the court adopted a so-called prevailing test: the plaintiff must first show that a less restrictive alternative is more efficient and fair; defendant must then dismiss such alternatives.
Accordingly, the jurisdiction where an association is located may dictate the impact that the FHA may have on an association's powers to enforce its covenants. Being aware of the prevailing or majority test used in determining disparate intent or impact may serve as a guideline for imposing and delineating restrictions.
This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.
Posted by Ryan McCabe at 5/6/2009 9:19 AM 
Categories: Property Owners Association, Constitutional Issues, Federal Regulations, Covenant Enforcement, SC Community Association Law, Injunctions, Condominium Association, Governing Documents
Categories: Property Owners Association, Constitutional Issues, Federal Regulations, Covenant Enforcement, SC Community Association Law, Injunctions, Condominium Association, Governing Documents
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