In community association administration, disparate impact claims can arise when a seemingly neutral policy or practice has a disproportionate negative impact on a group protected by fair housing laws. For example, communities occasionally ask us whether they can restrict the number of people that live in a property based on the number of bedrooms. While the intent of such a restriction may be to ensure resident safety or protect against excessive noise, the practical effect, or impact, of such a policy could be to discriminate against families of a certain size. It is illegal under the Federal Fair Housing Act to discriminate on the basis of familial status, which covers individuals under the age of 18 living with parents or other guardians.
Recent developments in federal policy underscore the need for community associations to be vigilant regarding disparate impact issues. On March 17, 2023, the Department of Housing and Urban Development (HUD) published on its website its “Reinstatement of HUD’s Discriminatory Effects Standard” which will soon be effective. This document reconfirms legal standards for determining disparate impact discrimination and policies resulting in a “perpetuation of segregation,” both of which have been effective for approximately 10 years. While the previous presidential administration attempted to change those standards to make it more difficult for plaintiffs to prove disparate impact discrimination, the current administration has reaffirmed support for those standards.
Making sure that rules and policies do not expressly discriminate is just one step to protect against fair housing complaints. Communities also need to think through the effects of their rules and policies to understand whether they will have a disparate impact on protected classes of individuals. If you have questions or concerns about one of your association’s policies or restrictions, contact us without delay.