Court Says Landlord Should Have Intervened in Tenant Dispute

by | Dec 16, 2019 | Rental Property Management Tips

A U.S. Court of Appeals last week passed down a ruling broadening the liability that landlords face for racial discrimination under the Fair Housing Act.

The court found that a landlord could be liable for discrimination under the FHA for failing to resolve a dispute between two tenants that was racially motivated.

Using the language of “hostile environment” more commonly seen in employment cases, the appeals court found that the landlord discriminated against a minority tenant when it failed to address that tenant’s concerns.

The tenant suffered what the court describes as a “brazen and relentless campaign of racial harassment, abuse, and threats” from a neighboring tenant. In fact, the harassment rose to the level of criminal behavior, and the offending tenant was charged with harassment. Ultimately, the victim was awarded a restraining order.

Although the offending tenant moved out, the victim sued the landlord claiming that the landlord did nothing to mitigate the months-long torment the tenant suffered.

The court case focused on the specific issue of whether the Fair Housing Act required the landlord to intervene in the dispute, given that the harassment was racially charged. The case bounced between the trial court and appellate court for years. The trial court originally ruled in favor of the landlord. Last April, the appeals court found that the landlord may be liable, and ordered the lower court to reopen the case. The trial court once again found for the landlord, and the tenant appealed. Last week, the Court of Appeals decided that the landlord did owe a duty under the Fair Housing Act to resolve this complaint.

That decision, however, is not easy to follow. The majority justices concluded that, because the landlord had previously resolved tenant matters, and then failed to weigh in on this matter, the landlord’s inaction could be viewed as intentional. From that, the justices infer that landlord’s intent was racially motivated, thereby invoking the Fair Housing Act.

But one of the justices on the panel disagrees, and makes a compelling argument that, while the Fair Housing Act might apply to similar situations, in this case, there is no showing of intent to discriminate on the part of the landlord. This justice argues that a landlord handling other routine leasing matters that were not racially charged in no way implies a motive to discriminate on the part of the landlord. This is similar to the reasoning of the lower court when dismissing the charges against the landlord.

The Court of Appeals decision may have been impacted by new guidelines offered by HUD, presumably in response to this court case. In 2016, HUD clarified its position on the reach of the Fair Housing Act, holding that a landlord may be liable under the FHA for failing to resolve such a dispute, regardless of the landlord’s intent or racist leanings.

Under the new HUD guidance, a landlord is liable for “failing to take prompt action to correct and end a discriminatory housing practice by a third-party, where the person knew or should have known of the discriminatory conduct and had the power to correct it. The power to take prompt action to correct and end a discriminatory housing practice by a third-party depends upon the extent of the person’s control or any other legal responsibility the person may have with respect to the conduct of such third-party.”

Under these rules, a landlord who is notified of racial harassment between tenants but fails to stop the harassment or evict the offending tenant could be liable for discrimination.

The dissenting justice issues a stark warning: “Today’s decision is not, as the majority would have it, a step forward to ‘root[ing] out discrimination in housing.’ Instead, this decision . . . is but another stumble along the path to ever more litigation that increases housing costs for those who rent, renders affordable housing more scarce, and risks the loss of housing for some of the most vulnerable among us.”

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

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Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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