News

Resolving the Rights of Two Disabled Residents with Conflicting Needs

A recent case before the Iowa Supreme Court provides a glimpse into the difficulties involved in weighing the rights of two disabled residents when granting an accommodation to either would have a negative impact on the other resident. Facts of the Case A tenant with animal allergies (Cohen) moved into an apartment building due to its no-pet policies.A neighboring tenant (Clark) sought a waiver of the no-pets policy due to a disability and requested an assistance animal (a dog).The landlord allowed the support animal while requiring the two tenants to use different stairways and provided an air purifier for the tenant with allergies.The measures failed to prevent the tenant from suffering allergic attacks.The resident sued the landlord and her neighbor in small claims court for breach of lease (the no - pet provision and quiet enjoyment).The Landlord responded that fair housing law required the accommodation, and he had no choice.The small claims court dismissed the case, concluding that the landlord s actions were reasonable.The case was appealed to the District Court which concluded that the landlord should have denied the animal due to the other tenant s pet allergies but dismissed the case due to the uncertainty of the law governing reasonable accommodations.The Iowa Supreme Court accepted the case for review. Result The Court concluded that the landlord s accommodation of the support animal was not reasonable because the tenant with pet allergies was in the property first and the dog s presence posed a direct threat to her health.The Court also ruled that the tenant with allergies was entitled to recover her claims of breach of lease and awarded damages in the amount of one month s rent.The Court made it clear that this was a fact-specific case and there was no "one-size-fits-all test" that will lead to the same result with different circumstances, giving the example of a guide dog for the blind as an example where the accommodation may be required. Unique Issues of the Case The letter from Clark s psychiatrist indicated that due to "research" showing that "pets are therapeutic and beneficial to physical and mental health," his professional opinion was that Clark would "benefit" from owning and caring for a dog. He asked the apartment community to allow Clark to have a pet (Emotional Support Animal or "ESA").Management received the request for an accommodation and notified existing residents, asking if any had an allergy to dogs. Cohen responded that she did.The landlord contacted the Iowa Civil Rights Commission (ICRC) and explained that the landlord owned other properties that permitted pets and that they could rent to Clark in one of those properties.The ICRC staffer advised the landlord that moving Clark to another building was not a reasonable accommodation and that they should try to accommodate the needs of both residents.The Landlord allowed Clark to have his ESA join him on the apartment premises while trying to mitigate Cohen s allergies. In doing so, the landlord had Cohen and Clark use separate assigned stairwells in an effort to keep Cohen free of the ESA s dander. The landlord also purchased an air purifier for Cohen s apartment to minimize her exposure to pet dander inside the apartment. The landlord explored installing "air lock" doors on each of the four floors of the apartment building to reduce the amount of air infiltration but ultimately decided it was not financially feasible because the cost estimate of doing so was $81,715.92. Issues Considered by the State Supreme Court The court considered two issues in addressing the case: (1) whether the ESA was a reasonable accommodation, and (2) whether the landlord had a good faith defense because it followed the guidance of ICRC staff. The respondent argued that "it had no choice but to allow the [ESA] into the building and also try to accommodate Cohen s allergies" after consulting with the ICRC about the issue. Respondent Clark contends that allowing the ESA was a reasonable accommodation, but Cohen argues that the actions were not reasonable given the burdens they imposed on her ability to enjoy living in her apartment. One of the elements of the FHA stressed by the court was that landlords have a safe harbor in refusing a tenant s requested accommodation if the tenancy "would constitute a direct threat to the health and safety of other persons " HUD in fact has provided guidance stating "A housing provider may, therefore, refuse a reasonable accommodation for an assistance animal if the specific animal poses a direct threat that cannot be eliminated or reduced to an acceptable level through actions the individual takes to maintain or control the animal (e.g., keeping the animal in a secure enclosure)." A key element in the case is that Cohen was in the building first. As the court stated, "Where the physical or mental well-being of tenants collide, we agree with Cohen that a priority-in-time test should be applied as a factor in the reasonableness analysis. As the well-known maxim goes, first in time shall be first in right. " In this case, being first in time tipped the balance in Cohen s favor. Cohen signed her lease first. She had relied on the "no pet" policy provisions in the lease. Finding The Supreme Court reversed the district court s dismissal of Cohen s case. The holding of the court resulted from a "fact-specific balancing" required by law in assessing reasonable accommodation determinations. The court did not hold that in all cases an assistance animal should be rejected if another person in the building had allergies and would suffer from the presence of the animal. The balancing test would not necessarily produce the same result. Lessons Learned Reasonable accommodations relating to support animals require a fact-specific analysis and may include striking a balance between the rights of two disabled residents. In this particular case, the court was swayed by the principle of "first come-first served." The resident Cohen was already living in the property when Clark requested his accommodation (the support animal). Due to the unique circumstances of a support animal vs. a service animal, the court believed that there were other options available to Mr. Clark - including living in another building that permitted pets that was owned by the same landlord. Since service animals, such as those that serve the blind, become acclimated to specific buildings, if this case had involved a service animal the finding may have been different. So, what should a landlord do when an existing resident can prove that the presence of an animal will lead to significant medical problems? There is no single answer. However, I do have recommendations on how to proceed in these cases. First, if possible, try to accommodate both residents. The landlord in this case did attempt to meet the needs of both residents but was unsuccessful. This does not mean that success could not be achieved in other cases. For example, getting the two residents to agree on a "dog-free" zone, such as the community room, may be possible. Especially if failure to reach such an agreement could result in the landlord denying the request for the assistance animal. Second, if the reconciliation process does not work, apply the "priority-in-time" test. The decision may well tip in the favor of the resident that was living in the property first. Third, if the property is a pet-free property, and someone (whether a new or existing tenant) requests an assistance animal, let the existing residents know that due to the requirements of the law, consideration is being given to allowing a dog in the building. Do not provide details regarding the resident requesting the animal or reasons why the animal is needed. If, as was the case here, an existing resident can prove a detrimental effect, granting the request would not be reasonable and should probably be denied. In this case, the "interactive process" with the applicant or resident who requested the animal would be required. This means that the landlord is obligated to work with the requester to try to find another solution (e.g., living in another building owned by the landlord). Finally, in buildings that are pet-free and already have assistance animals in place, new residents should be informed that the building does contain assistance animals. This would give notice to anyone with allergies to animals that they may want to consider alternative living arrangements. This case is a perfect example of the difficulties involved with the approval of assistance animals - especially support animals. Landlords must remember that each case must be considered on its own merits and that the rights of existing residents do play a role in the decision-making process. The landlord in this case was in a "no-win" situation, in that no matter what decision they made, a challenge was likely. The case does provide some guidance - and precedent - if faced with this particular situation and is instructive in the specific circumstance involving the rights of two disabled individuals.

CDC Extends Eviction Moratorium

The Centers for Disease Control and Prevention ("CDC") issued an order on Tuesday, August 3, 2021, that - after a short interruption - seeks to extend its prior eviction moratoriums, originally imposed in September 2020. The newest moratorium will expire on October 3, 2021, is intended to bridge the gap between public health concerns and judicial opinions questioning whether the federal government - including the CDC - has the legal authority to impose an eviction moratorium on properties with no federal assistance. The new moratorium is more focused in that it applies only to jurisdictions with "substantial" or "high" levels of COVID-19 outbreaks. Given the widespread distribution of the Delta variant of the virus, this essentially covers the entire country. The legal rationale for the initial September 2020 eviction moratorium was the CDC s authority to take action to interdict the interstate transmission of infectious materials. The CDC took the position that tenant evictions in the middle of a pandemic would accelerate the spread of COVID-19, as tenants moved across state lines to seek housing in shelters or with family members or friends. During a time when social distancing was still the primary public health response to the pandemic, the CDC moratorium recognized a basic reality - if people stayed home, the spread of the virus would be reduced. Unfortunately, the CDC interpretation of the law giving them authority in this area was tortured at best. The law authorizes the CDC to impose measures such as "inspection, fumigation, disinfection, sanitation, pest extermination, and destruction of animals." It does not give the authority to freeze the rental housing market for months in virtually the entire country. In general, courts have taken the position that the CDC overreached. Some courts stated that the CDC s authority to restrict the transmission of infectious materials was too limited to support a nationwide moratorium on tenant evictions. Other courts went farther, arguing that the federal government had no constitutional authority to interrupt issues of landlord-tenant law that are universally controlled by state laws. Recently, the Supreme Court declined to take up the case, arguing primarily that since the Moratorium would expire at the end of July and billions of dollars of Emergency Rental Assistance Program (ERAP) funding would be available to prevent evictions, participation of the Court was not necessary. (It should be noted that nationally, only a fraction of the ERAP funds - less than 7 percent - have been used). This new CDC order is basically making the argument for the moratorium by showing the threat posed by the Delta variant and how an eviction moratorium will slow the spread of the variant. The CDC order includes a link of areas with widespread outbreaks, but it is an absolute certainty that this order will cause great confusion among landlords and will almost certainly be challenged in the courts. Landlords should obtain a copy of the order and try to determine if they are impacted by the order based on location - approximately 80% of counties will come under the order.

A. J. Johnson to Offer Live Webinar on Criminal Screening Policies in Multifamily Housing

A. J. Johnson will be conducting a webinar on August 31, 2021, on Criminal Screening in Multifamily Housing - Recommended Policies & Procedures.  The Webinar will be held from 1:00 PM to 2:30 PM Eastern time. Property owners may (and should) screen applicants for criminal behavior but must be careful when doing so - and must have transparent and defensible policies relative to screening for past criminal conduct. This 1.5-hour webinar will assist owners and property managers in understanding what is required when implementing a criminal screening policy. The training will outline the HUD guidance relative to criminal screening and will review the type of policies that are - and are not - acceptable. The discussion will center on (1) the types of crimes that are appropriate for screening; (2) the HUD policy regarding the use of arrest records in criminal screening; (3) dealing with convictions for non-dangerous crimes; and (4) the use of individual assessments for rejected applicants. Following the session, participants will be better prepared to develop a criminal screening policy that will not run afoul of fair housing law. Those interested in participating in the Webinar may register on the A. J. Johnson Consulting Services website (www.ajjcs.net) under "Training Schedule."

The Sovereign Citizens Movement and Affordable Housing

A number of our clients have contacted us recently to ask how to handle the applications of individuals who claim to be "sovereign citizens," and state that the government has no right to verify their eligibility for affordable housing, such as Section 8 or LIHTC. I have seen this often enough lately that an article on sovereign citizens and how to handle them for affordable housing eligibility purposes is warranted. Sovereign Citizens believe that they - not judges, juries, law enforcement, or elected officials - should decide which laws to obey and which to ignore. Most sovereign citizens also don t believe they should have to pay taxes. The contemporary sovereign belief system is based on a decades-old conspiracy theory. Sovereigns believe that the American government set up by the founding fathers, under a common-law legal system, was secretly replaced. They think the replacement government swapped common law for admiralty law, which is the law of the sea and international commerce. They follow the basic precept that U.S. judges and lawyers are foreign agents who deny the court challenges of sovereigns out of treasonous loyalty to hidden and illegitimate government forces. It is impossible to know how many sovereigns there are in the U.S. today, in part because there is no central leadership. There are a variety of local leaders with individualized views on sovereign citizen ideology and techniques. Their recommendations often include tax evasion, adverse possession (squatting on a property that does not belong to them), or ignoring laws regarding driver's licenses, vehicle registration, or license plate possession. They base these activities on their belief that free men and women, as they call themselves, are not bound by the laws in question. It is estimated that there may be as many as 500,000 sovereign citizens, with a hardcore group of about 100,000. When sovereigns are angry with government officials (or others who deny their rights as sovereigns), their revenge most often takes the form of "paper terrorism." Sovereigns file retaliatory, bogus property liens that may not be discovered by the victim until they attempt to sell or mortgage their property or take out a loan. These liens can be for millions of dollars. For this reason, it is recommended that property owners who reject the application of a sovereign due to their refusal to verify eligibility check for possible liens against the property for a period of one to two years after the rejection. Sovereigns have also signed up for Section 8 as landlords for properties they do not own. Over the course of four years, the Department of Housing & Urban Development (HUD) has recovered $17 million from sovereigns for housing-related fraud. Despite what they may believe, so-called Sovereign Citizens are not exempt from federal, state, or local law. If such a person applies for occupancy at an affordable housing property of any type, including HUD, Rural Development, or LIHTC, they are subject to the same rules as any other person. They must be able to demonstrate eligibility based on verified information and must submit to the same screening and occupancy criteria as any other applicant. Due to the nature of their beliefs, when dealing with such individuals, managers should contact their corporate office and involve their attorney in the process.

A. J. Johnson to Present Webinar on Hoarding – A Fair Housing Challenge.

A. J. Johnson will be conducting a webinar on August 3, 2021, on Hoarding - A Fair Housing Challenge.  The Webinar will be held from 1:00 PM to 2:30 PM Eastern time. In May 2013, the American Psychiatric Association (APA) confirmed that Compulsive Hoarding is a mental disability and a protected class. More than 15 million Americans suffer from the mental health problem of hoarding and potential problems from hoarding include noxious odors, pest infestation, mold growth, increased risk of injury or disease, fire hazards, and even structural damage.Hoarding is the one class of disability that requires landlords to offer an accommodation - even if an accommodation is not requested!This 1.5-hour live webinar is designed to assist multifamily managers in understanding how to deal with hoarding problems in a way that will prevent liability under fair housing law. The session will define hoarding and provide detailed recommendations on how to deal with a hoarding problem. It will outline examples of accommodations for hoarding, how to engage in the "interactive process" with residents who hoard, and the steps necessary to remove uncooperative residents. Finally, a recent court case regarding hoarding will be reviewed as an illustration of the potential difficulties managers face in hoarding situations.This is an evolving area of fair housing law, and this webinar will provide the guidance necessary to approach the problem in a systematic way that will give multifamily operators the best chance at avoiding the legal traps the exist when dealing with this unique disability. Those interested in participating in the Webinar may register on the A. J. Johnson Consulting Services website (www.ajjcs.net) under "Training Schedule."

A. J. Johnson to Host Live Webinar on Verifying and Determining Income for Affordable Housing Applicants and Residents.

A. J. Johnson will be conducting a webinar on July 29, 2021, on Verifying and Determining Income for Affordable Housing Applicants and Residents.  The Webinar will be held from 1:00 PM to 3:30 PM Eastern time. A critical aspect of every affordable housing manager's job is the determination of income for applicants and residents. This 2.5-hour training covers how income is defined for virtually all affordable housing programs, including the LIHTC, Section 8, HOME, and Rural Development programs, and provides guidance on how to both calculate and verify various types of income. Specific instruction is included for employment income, military pay, pensions and Social Security, self-employment, and child support. A full discussion of how household membership impacts the income determination will be included, as well as a review of the basic rules regarding the calculation of income. This section features guidance on using year-to-date information when projecting income. The course concludes with practice problems to ensure a full understanding on the part of the student and there is plenty of time for Q&A. Those interested in participating in the Webinar may register on the A. J. Johnson Consulting Services website (www.ajjcs.net) under "Training Schedule."

Exclusion of Military Basic Allowance for Housing for LIHTC Properties

While the exclusion of the military Basic Allowance for Housing (BAH) for Low-Income Housing Tax Credit (LIHTC) properties in certain areas of the United States has been around for 13 years, there is still some confusion as to which properties may benefit from this exclusion. This article will recap the basic requirements and clarify some potential confusion. Section 3005(a) of the 2008 Housing Act amended the LIHTC program requirements to exclude the military Basic Allowance for Housing payments from income for certain qualified LIHTC buildings. A qualified building is defined as any building located: In any county which contains a qualified military installation to which the number of members of the Armed Forces assigned to units based out of such qualified military installation increased by 20% or more between December 31, 2005, and June 1, 2008; orAny counties adjacent to the county described in #1 above. For these purposes, a "qualified military installation" means any military installation or facility that had at least 1,000 members of the Armed Forces of the United States assigned to it as of June 1, 2008. Qualifying military bases were identified in IRS Notice 2008-79. However, the list was not an exclusive list and any qualified military installation which satisfied the percentage requirements outlined above is eligible to receive similar treatment regardless of the fact that it was not identified in the IRS Notice. The following list identifies military installations that are deemed to be qualified military installations that satisfied the 20% population increase requirement for purposes of the exclusion of BAH in determining income for LIHTC (and some tax-exempt bond) properties. The IRS will update the list if it receives additional information indicating that other military installations should receive the same treatment. Note - owners and managers should confirm the eligibility of these locations with their Housing Finance Agency: U.S. Air Force Academy, Colorado - Colorado Springs, Co (El Paso County with adjacent counties of Elbert, Crowley, Douglas, Fremont, Lincoln, Pueblo, and Teller).Fort Shafter, HA - Hawaii (Honolulu County and adjacent counties of Maui and Kauai).Fort Riley, KS - Geary & Riley Counties, KS with adjacent counties of Wabaunsee, Morris, Dickenson, Clay, Marshall, Pottawatomie and Washington.Annapolis Naval Station (including U.S. Naval Academy), MD - located in Anne Arundel County with adjacent counties of Baltimore, Calvert, Kent, Howard, Prince George s, Queen Anne s and Talbot.Fort Jackson, SC - located in Richland County, SC with adjacent counties of Kershaw, Fairfield, Sumter, Lexington, Calhoun, and Newberry.Fort Bliss, TX - located in El Paso County, with adjacent counties of Hudspeth, Dona Ana (New Mexico), and Otero (New Mexico).Fort Hood, TX - located in Bell County, with adjacent counties of McLennan, Falls, Milam, Williamson, Burnet, Lampasas, and Coryell.Dam Neck Training Center Atlantic, Virginia - Located in Virginia Beach, with adjacent cities of Norfolk and Chesapeake; also Currituck County, NC.Naval Station Bremerton, Washington - located in Kitsap County, with adjacent counties of Island, Snohomish, King, Pierce, Mason, and Jefferson. Tax-exempt bond-financed properties with the LIHTC are eligible for this exclusion, but bond properties without the LIHTC are not eligible for the exclusion.

Child Tax Credit Excluded Income for Housing Purposes

The American Rescue Plan of 2021 (ARP) provides a monthly payment from the enhanced child tax credit and these payments are landing in family bank accounts during the week of July 12, with the first payments arriving on July 15. HUD has determined, in accordance with Federal law, that the monthly child tax credit is to be excluded from the annual income calculation for affordable housing programs. Section 7527A of the ARP provides a monthly payment of up to $300 per month from July 2021 through December 2021. 26 U.S. Code 6409 states, "notwithstanding any other provision of law, any refund (or advance payment with respect to a refundable credit) made to any individual under this title shall not be taken into account as income, and shall not be taken into account as resources for a period of 12 months from receipt, for purposes of determining the eligibility of such individual (or any other individual) for benefits or assistance (or the amount or extent of benefits or assistance) under any Federal program or under any State or local program financed in whole or in part with Federal funds."  Due to the requirements of this law, the child tax credit is excluded income for purposes of any housing utilizing federal benefits or assistance, including the Low-Income Housing Tax Credit program (LIHTC). Parents of children ages 5 and younger can receive up to $300 per month per child and $250 per month per child ages 6 to 17. The payments max out at $3,600 annually for each child under six and $3,000 for those ages six to 17. The credit is fully refundable, meaning families can still benefit even if they have no earned income or do not owe income taxes. The expanded credit ends in December, but President Biden has called for a four-year extension, which would need Congressional approval. In addition to the Child Tax Credit, owners and operators of affordable housing should keep in mind that the Federal Pandemic Unemployment Compensation of $300 per week is also excluded income.