Are We Discriminating By Not Being FHA Certified?

Elina B. Gilbert | Wednesday, February 12, 2014 | Community Associations Miscellaneous

As if all the other drama associated with FHA certifications and recertifications is not enough, there’s now one more match to add to this fire: accusations of discrimination by potential buyers.

A woman in Ohio filed a complaint with the Ohio Civil Rights Commission on or about February 22, 2013 alleging a condominium association by the name of Spring Creek Condominium Association and its management company discriminated against her because the community was not FHA certified.  No doubt you are saying to yourself “how can this be??”  Well, you’re not the only one.

Amy Noel alleged discrimination on the basis of familial status and claimed the association and its managing agent refused to allow her an opportunity to purchase a condominium in the Spring Creek Condominium community because she had a small child.  In fact, Ms. Noel went so far as to allege the association intentionally refused to seek recertification to specifically keep her out of the community.

In this case, the Ohio Civil Rights Commission did not agree with Ms. Noel and found there was no probable cause for discrimination.  The Commission concluded the association had no knowledge of Ms. Noel’s name, marital status, or status as a mother at the time she was attempting to purchase the condominium.  Furthermore, the association lost its FHA certification in August 2011 due to the rise in fidelity coverage, so the FHA non-certification had been out there long before Ms. Noel came into the picture.

Notwithstanding the above, the Commission did note that Ms. Noel is still authorized to file a civil action against the association and its management company pursuant to Ohio law.  In other words, the Commission’s findings are not binding the courts (although such findings may be influential) and Ms. Noel may still have her day in court.

How might this process impact Colorado associations?  What if Ms. Noel were to prevail in court in this particular case?   For more information on FHA certifications, see our article FHA Condominium Certifications: The Requirements and Prohibitions.

Comments

If the association chose not to obtain FHA certification, or was unable to do so, then this action would apply to everyone across the board who wanted to purchase a unit in Spring Creek, so this cannot be discriminatory against one buyer. And how could the association possibly know the status of every potential buyer? However, when you said "Ms. Noel went so far as to allege the association intentionally refused to seek recertification to specifically keep her out of the community," this led me to believe that the association and Ms. Noel were not only aware of each other, but had had prior dealings. Yet and still, failure to do something to satisfy the demands of one buyer does not constitute discrimination, in my opinion. And all the CRC did was to affirm Ms. Noel's right to sue, and we all know that anyone can sue anyone else for any reason. Whether the complainant prevails is an entirely-different issue. My guess is that she won't sue, however, as this would be at her expense. What she was really seeking was for an entity to take her case and pursue the association, at no expense to her. She may have felt vindicated when the CRC accepted her case. However, she was left all-the-more frustrated when it ruled against her. For reasons stated herein, I really don't think we in the CIC realm really have anything about which to worry.

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