Owners and Property Managers Agree with HUD to Pay $630,000 for Discrimination Suit

HUD Announces agreement to resolve allegations that property owners used rental screening policies that prevented applicants with mental disabilities from renting

By Jeff Sorg, OnlineEd Blog

(May 16, 2016) – The U.S. Department of Housing and Urban Development (HUD) announced today that it has reached a $630,000 agreement with a group of Illinois property owners and a management company resolving allegations they violated the Fair Housing Act and Section 504 of the Rehabilitation Act of 1973 by using rental screening policies that prevented applicants with mental disabilities from living in a supportive living complex the group owned. Read the agreement.

The Fair Housing Act prohibits discrimination in the sale or rental of a dwelling on the basis of disability. In addition, Section 504 of the Rehabilitation Act of 1973 prohibits discrimination on the basis of disability by any program or activity receiving federal financial assistance.

“Discriminatory practices that target persons with disabilities not only violate their rights, they lock them out of decent, safe and affordable housing,” said Gustavo Velasquez, HUD Assistant Secretary for Fair Housing and Equal Opportunity. “HUD remains committed to taking action when property owners and managers fail to meet their obligations under the Fair Housing Act.”

The case came to HUD’s attention after several individuals with mental disabilities filed complaints alleging they were denied residency at the property managed by Eden Management, LLC, due to their disabilities. The individuals filed their complaints with the assistance of HOPE Fair Housing Center, a HUD Fair Housing Initiatives Program agency in DuPage County. HOPE conducted three tests at Eden and also filed a complaint with the Department.

Under the terms of the Conciliation and Voluntary Compliance Agreement, Eden will pay Complainants $630,000, which includes relief and attorneys’ fees and costs. The agreement further requires Eden to make significant policy changes, including revising its admissions manual and handbook; updating its non-discrimination statement; establishing a reasonable accommodation policy; and conducting fair housing training for employees. Furthermore, the company will develop a protocol to apply objective admissions criteria, notify all applicants of their due process rights, and refrain from asking applicants about the existence of mental disabilities or prescriptions during tours of the facility. Eden will also provide a letter to their top three referral sources encouraging individuals to apply regardless of mental disability.

In FY 2015, disability was the most common basis of complaints filed with HUD and its partner agencies, being cited as a basis for 4,548 complaints, or nearly 55 percent of the overall total.

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Jeff Sorg

About the Author

Jeff Sorg is a co-founder of OnlineEd®, a Web-based vocational school founded in 1997 where he also serves as Corporate Secretary, Chief Operating Officer, and School Director. Sorg holds vocational instructor licenses in Oregon, Washington, California, and Nevada and has authored numerous pre-licensing and continuing education courses. Sorg was awarded the International Distance Education Certification Center's CDEi Designation for distance education in 2008. OnlineEd® provides real estate, mortgage broker, insurance, and contractor pre-license, post-license, continuing education, career enhancement, and professional development and designation courses over the Internet.