The number of cases alleging discrimination on race-based or sex-based violations of the Fair Housing Amendments Act (FHAA) is legion. Under the Fair Housing Amendments Act (FHAA), it is unlawful “to discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of race, color, religion, sex, familial status, or national origin.” 42 U.S.C. § 3604 Directors need to be aware that failure to prevent and/or properly respond to FHAA discrimination claims could land their association in an expensive law suit. Because many unlawful discrimination complaints often arise out of covenant enforcement, good record-keeping of covenant enforcement matters is crucial in establishing the association’s legal basis for the action taken whether it be fines, warnings or legal action.
The importance of association records is highlighted in the Baker v. Waterford Square Homeowners Association (“Association”) case out of the Texas U.S. District Court. In this case, the association prevailed primarily because of the evidence presented through association records.
The Court held that the association’s act in levying fines and penalties against a woman of Chinese descent (“Baker”) did not violate the Fair Housing Act, as they were based on the Association’s belief that Baker was in violation of the governing documents rather than on her race, national origin and/or sex.
When Baker first moved into Waterford Square in 1984, she lived with her husband in a single rented condominium unit. In 1993 her husband died. Baker now owned five condominium units. She lived in two of the units and rented the other three. Baker kept four dogs in each of the units within which she lived, and had a habit of feeding stray cats. After a number of complaints based on noise and odor caused by her dogs, the Association requested that she remove her dogs. Over the next five years, the Association further notified her of a number of other violations caused by herself and her tenants. At one point, the Association tried to remove Baker’s patio fence in order to clean her patio, resulting in a hostile and abusive exchange between Baker and a particular Board member (“Randles”). Baker failed to correct her violations, so the Association levied fines and assessments against her and threatened foreclosure on her units.
In 1999, after a prospective buyer wished to buy all the units in the Waterford Square complex, and Baker refused to sell, the Association assessed a $6,750.00 fine against Baker, and also threatened to disconnect her utilities and those of her tenants if she continued to refuse to sell. She obtained a preliminary injunction preventing the association from foreclosing on her units. A year later, she sued the Association and Randles for violation of the Fair Housing Act by creating a hostile housing environment based on her race, national origin and/or sex, and further, because they had intentionally caused her emotional distress.
The Texas U.S. District Court, Northern District, held that the Association had based its fines and penalties on violation of the Bylaws, rather than on her race, national origin and/or sex. It was clear to the Court, based on documentation presented by the Association, that the Association had based its fines and penalties on its belief that she was in violation of the Bylaws. Furthermore, the Court found that although Randles’ conduct reflected insensitivity toward women and minorities, his conduct was based on a profound disagreement with how she maintained her units, not on her race, national origin or sex.
So what does the above case mean for associations and board members? It shows that well-kept records of an association’s practice of not discriminating in covenant enforcement (i.e.,documentation showing uniform enforcement of covenants and rules, detailed records of all covenant enforcement violations, etc.) is a good source for courts to use in determining whether or not an association has violated the Fair Housing Act. However, good record-keeping is only the start. Below are a number of other practice tips: