News

Participation of Faith-Based Organizations in HUD Programs

I received a call recently regarding the rights of a faith-based organization operating an apartment community when HUD funding is present at the community. The issue is important enough that I believe other clients may benefit from a general review of the laws in this area.   24 CFR 5.109 is the governing section of the Code of Federal Regulations in this area. Faith-based organizations are eligible to participate in HUD programs and activities on the same basis as other organizations. No governmental entity administering HUD programs may discriminate against a group based on religious character or affiliation, of lack of religious character or affiliation.   A faith-based organization that participates in an HUD-funded program may continue to carry out its religious mission as long as direct federal financial assistance is not used to support or engage in activities that are clearly religious in nature. Religious organizations that receive direct federal funding may use space in its facilities to carry out activities under a HUD program without removing religious symbols from the space. However, if the organization carries out specific religious activities, the activities must be offered at a separate time or location from the programs or activities supported by federal financial assistance. Also, participation in religious activities must be voluntary for program beneficiaries. Faith-based organizations that carry out programs or activities with HUD financial assistance must give written notice to beneficiaries and prospective beneficiaries of the programs or activities and describe the protections available to them. If a beneficiary or prospective beneficiary objects to the religious character of the organization carrying out the programs, the organization must undertake reasonable efforts to refer the beneficiary or potential beneficiary to an alternative provider.   Faith-based organizations that operate HUD-assisted housing, and management companies working for such organizations, must be familiar with these requirements and be prepared to adhere to the federal requirements. Clearly, fair housing law should always be kept in mind when dealing with religious issues on the site. It is against the law to discriminate on the basis of religion. This includes having any practice, program, or policies that indicate a preference for one religion over another. For this reason, owners and managers should carefully review programs offered at properties and how community facilities are used.

HUD Notice H 2016-10; Reminder of Lead-Based Paint Requirements

On October 3, 2016, HUD published Notice H 2016-10, Reminder of Requirements Pertaining to Lead-Based Paint Inspection and Disclosure Forms, and Notification of Upcoming Inspections.   As stated in the Notice, exposure to lead remains a major environmental health problem in the United States. The consequences of an elevated blood lead level, especially for children under the age of six, can be life-long. Neurological development, such as lowered IQ and behavioral problems, are typical issues.   The primary source of childhood lead poisoning is lead-based paint, found in the majority of homes built prior to 1978. HUD has issued this Notice to remind Multifamily Owners and Management Agents of the need to retain lead-based paint risk assessment and inspection records, and lead disclosure forms in accordance with the requirements of HUD s Lead-Based Paint Poisoning Prevention regulations.   The Notice also places owners and agents (O/As) on notice that REAC inspectors will soon be inspecting portfolios on a nationwide basis, and that if files do not contain the required lead risk assessment or inspection records, and lead disclosure forms, O/As will be asked to provide a copy of the missing reports and forms to designated field office representatives.   If a multifamily property assisted under a HUD program does not have any buildings built before 1978, or if the pre-1978 property is listed by the owner in Multifamily Housing records as being designated for the elderly or for persons with disabilities, the inspector will ask if any children under age six live at the property. If there are no children under age six, the property is exempt from the Lead Safe Housing Rule (LSHR). If there are children under six at the property, the LSHR applies to the units in which the children live, any common area servicing those units, and exterior painted surfaces associated with those units or common areas, the inspector will inspect those areas. If some buildings in a property were constructed before 1978, and some in 1978 and later, the property is covered by the LSHR but only the buildings built prior to 1978.   If the property is covered by the LSHR and has been inspected for lead-based paint, the inspector must be shown the lead-based paint inspection report. If the lead-based paint inspection report and the report s executive summary state that the property has no lead-based paint, there will be no REAC inspection regarding lead.   If the property does not have a lead-based paint inspection report stating that there is no lead-based paint, the inspector must be provided a copy of the lead risk assessment.   Unless the property has no lead-based paint, the inspector will ask for a copy of the lead hazard control plan for the project, as well as evidence of a two-year (biennial) lead reevaluation.   In preparing for upcoming REAC inspections, properties subject to the LSHR must ensure that all required lead-related reports are available for the inspector.      

HUD 2017 Operating Cost Adjustment Factors Published - October 5, 2016

On October 5, 2016, HUD published a Notice of Certain Operating Cost Adjustment Factors (OCAF) for 2017. The Notice is effective for properties with Project-based rental assistance contracts under Section 8 with an anniversary date on or after February 11, 2017.   Contract rents are adjusted by applying the OCAF to that portion of the rent attributable to operating expenses exclusive of debt service. OCAFs are calculated as the sum of weighted average cost changes for wages, employee benefits, property taxes, insurance, supplies and equipment, fuel oil, electricity, natural gas, and water/sewer/trash using publicly available indices.   Following are the individual state Operating Cost Adjustment Factors for 2017: Alabama: 2.1% Alaska: 0.5% Arizona: 2.1% Arkansas: 2.3% California: 2.2% Colorado: 1.7% Connecticut: 1.1% Delaware: 1.7% District of Columbia: 2.0% Florida: 2.0% Georgia: 2.0% Hawaii: 0% Idaho: 2.3% Illinois: 1.5% Indiana: 2.0% Iowa: 2.1% Kansas: 2.0% Kentucky: 1.9% Louisiana: 1.8% Maine: 1.4% Maryland: 2.1% Massachusetts: 1.8% Michigan: 1.7% Minnesota: 1.8% Mississippi: 2.1% Missouri: 2.2% Montana: 2.1% Nebraska: 2.3% Nevada: 2.2% New Hampshire: 1.8% New Jersey: 1.3% New Mexico: 1.6% New York: 0.4% North Carolina: 2.0% North Dakota: 2.4% Ohio: 1.9% Oklahoma: 2.0% Oregon: 2.2% Pacific Islands: 0.0% Pennsylvania: 2.0% Puerto Rico: 1.9% Rhode Island: 2.1% South Carolina: 2.1% South Dakota: 2.1% Tennessee: 2.0% Texas: 2.0% Utah: 2.2% Vermont: 0.6% Virgin Islands: 2.0% Virginia: 2.0% Washington: 2.2% West Virginia: 2.6% Wisconsin: 1.8% Wyoming: 2.2%

Assistance to Non-Citizens in the Section 8 Program

Assistance to Non-Citizens in the Section 8 Program   Section 214 of the Housing & Community Development Act of 1980 prohibited HUD from providing housing assistance to aliens unless they meet certain residency requirements.   In 1996, Congress amended Section 214 to revise provisions regarding verification of eligibility and proration of assistance. In Section 214(h) on verification, Congress included an opt-out provision for Public Housing Agencies (PHA). The apparent intent of this provision was to allow PHAs to opt-out of the verification provision, but the literal language allowed PHAs to opt-out of Section 214 in its entirety. The mistake was corrected by the Quality Housing & Work Responsibility Act of 1998 (QHWRA) and allowed PHAs to elect not to verify eligibility before providing financial assistance. This provision does not permit owners of Section 8 properties to do the same; in the case of these properties, verification of eligibility prior to the provision of assistance is always required.   PHAs are the "responsible entity" for implementing the Section 214 requirements for the Housing Choice Voucher Program.   Eligibility of Noncitizens (24 CFR 5.506 (a) (2))   To be eligible, noncitizens must fall into one of the following categories: Lawfully admitted for permanent residence; Lawfully admitted for temporary resident status as Special Agricultural Workers; Granted refugee or asylum status or granted conditional entry because of persecution or fear of persecution on account of race, religion, or political opinion or because of being uprooted by national calamity; Granted parole status by the Attorney General; Lawfully present because the Attorney General withheld deportation due to a threat to life or freedom; or Granted amnesty for temporary or permanent residence.   Evidence of Eligibility [24 CFR 5.508 (b) and (c)]   To receive assistance, each family member - regardless of age - must submit evidence of citizenship or eligible immigration status.   For U.S. citizens, all that is required is a signed declaration of citizenship, though a PHA must request verification through presentation of a passport or other documentation. Noncitizens must submit a signed declaration of eligible immigration status and proper documentation.       Eligibility Verification [24 CFR 5.512 (a) and (b)]   The primary method of verification is use of the INS (HUD regulations still refer to Immigration & Custom Enforcement as the INS) System for Alien Verification of Entitlements (SAVE) which provides access to names, file numbers, and admission numbers of noncitizens. If the SAVE system fails to verify eligibility, the PHA/owner must use secondary verification, consisting of a manual search of INS records.   Generally, no household may receive assistance unless at least one family member is eligible for assistance. However, as noted above, a PHA may elect to provide assistance before verification as long as eligibility is verified by the first annual recertification. This rule applies for voucher residents only - it does not apply to public housing.   24 CFR 5.514 (b) (2) provides that assistance cannot be delayed, denied, reduced, or terminated due to delays in the verification of immigration documents submitted by the applicant.   Denial or Termination of Assistance [24 CFR 5.514 (c)]   Assistance must be denied or terminated to an applicant or recipient if evidence of citizenship or eligible immigration status is not submitted or cannot be verified by primary or secondary verification. If it is determined that a family member knowingly permitted an ineligible individual to reside permanently in a unit (and assistance was not prorated), assistance must be terminated for at least 24-months.   24 CFR 5.514 (d) and (f) provides that from the date of denial or termination of assistance, the family has 30-days to appeal to the INS. The INS must give a decision within 30-days unless it notifies the family and PHA/owner of the reason for a delay. When the INS decision is received, the family must be notified of its right to an informal hearing, which must generally be held within 30-days.   24 CFR 5.514 (b) (2) provides that if a hearing is requested, assistance may not be terminated or reduced prior to the hearing.   Continuation of Assistance [24 CFR 5.518 (a)]   An assisted family with both eligible and ineligible members will be eligible for continued assistance if the family was receiving assistance on June 19, 1995, the head of household or spouse has eligible immigration status, and the family does not include any ineligible member other than the head of household, spouse, parents of the head of household or spouse, or children of the head of household or spouse. After November 29, 1996, continued assistance to a mixed family is prorated based on the number of family members eligible for assistance.     Proration of Assistance [24 CFR 5.520 (c)]   A mixed family not eligible for continued assistance is entitled to receive a prorated Section 8 subsidy based on the number of eligible family members. The proration will not affect the rent received by the owner. The family is responsible for the difference between the prorated assistance and the unit rent.   Noncitizen Students [24 CFR 5.522]   The provisions for continued assistance and temporary deferral of termination of assistance do not apply to noncitizen students admitted temporarily and solely for educational studies and their families, unless the spouse of the student is a citizen.    

Compliance with HUD Live-in Aide Rules

Compliance with HUD Live-in Aide Rules   Allowing a Live-in Aide for a disabled person is both a HUD and fair housing requirement.   The definition of a live-in aide is a person who resides with one or more elderly persons, near-elderly persons, or persons with disabilities, and who: Is determined to be essential to the care and well being of the person(s); is not obligated for the support of the person(s); and would not be living in the unit except to provide the necessary supportive services.   Requirement #1 essentially means that in order to have a live-in aide, a resident would have to meet the Fair Housing Act (FHA) definition of handicapped or disabled; otherwise, the aide would not be essential to the care and well being of the resident.   To qualify as a live-in aide:   The owner must verify the need for the live-in aide. Verification that the live-in aide is needed to provide the necessary supportive services essential to the care and well being of the person must be obtained from the person's physician, psychiatrist, or other medical practitioner or health care provider. The owner must approve a live-in aide if needed as a reasonable accommodation under fair housing law to make the program accessible to or usable by the family member with a disability. The owner may verify whether the live-in aide is necessary only to the extent necessary to document that applicants or tenants who have requested a live-in aide have a disability-related need for the requested accommodation. This may include verification from the person's physician, psychiatrist, or other health care provider. The owner may not require applicants or tenants to provide access to confidential medical records or to submit to a physical examination. It should be noted that fair housing law prohibits verification of the need for a reasonable accommodation when both the disability and the need for the requested accommodation are obvious. If an owner/agent determines by observation that a resident is so clearly disabled as to require the services of an aide, the file should be clearly documented with regard to the reason why no professional verification was obtained.   Expenses for services provided by the Live-in Aide, such as nursing services (dispensing of medications or providing other medical needs) and personal care (such as bathing or dressing), that are unreimbursed out-of-pocket expenses for the tenant are considered eligible medical expenses for HUD purposes (this issue does not apply for purposes of the Low-Income Housing Tax Credit Program since there are no deductions from income). Homemaker services such as housekeeping and meal preparation are not eligible medical expenses.   The Live-in Aide qualifies for occupancy only as long as the disabled resident requires the aide s services and remains a tenant. The Live-in Aide may not qualify for continuing occupancy as a remaining family member, and under no circumstance should a Live-in Aide be converted to a household member. Owners should use a lease addendum (HUD approved in the case of a HUD property) that denies occupancy of the unit to a Live-in Aide after the tenant, for whatever reason, is no longer living in the unit. The addendum should also give the owner the right to evict the Live-in Aide if they violate any house rules. This may also be done through the use of a "Live-in Aide Agreement.   Income of a Live-in Aide is excluded from household income.   In a HUD property, the Live-in Aide must disclose and provide verification of their Social Security Number (SSN).   Live-in Aides should also be required to meet the property s screening criteria - other than credit. The screening of Live-in Aides at initial occupancy and the screening of Live-in Aides to be added to an existing household should be the same. They should be screened based on the criminal screening procedures that the owner uses in screening applicants for housing. HUD properties should note that the EIV Existing Tenant Search is required for Live-in Aides.   A relative may be a Live-in Aide if they meet the requirements stated above - especially #3. This also applies to HUD Section 202 PRAC and Section 811 projects, where adult children are not eligible to move into a unit unless they are performing the functions of a Live-in Aide and are classified as a Live-in Aide for eligibility purposes.   Live-in Aides must be counted for the purpose of determining appropriate unit size, i.e., a Live-in Aide is entitled to their own bedroom. However, if a unit with a separate BR for the aide is not available, the aide should not be denied occupancy as long as permitting such occupancy does not overcrowd the unit under state or local law. If a larger unit becomes available and the tenant requests a transfer to such unit, the owner is obligated to permit the transfer as a reasonable accommodation. However, there is no obligation to charge only the rent that would be charged for the smaller unit.   In the case of HUD-assisted properties, a Live-in Aide may never be considered a dependent.   When permitting a Live-in aide to reside it a unit as a reasonable accommodation, owners and managers should be certain that the file clearly documents the status of the aide. It is also recommended that Live-in Aides be included on the Tenant Income Certification (TIC), but they should not be permitted to sign the TIC. Also, other than on the Live-in Aide addendum to the lease, an aide should never be listed on a lease - not even as an occupant.    

Defining the Terms Handicapped or Disabled for Fair Housing Purposes

The Meaning of "Handicap/Disabled": Defining the Protected Characteristic   The Fair Housing Act (FHA) defines "handicap" as: A physical or mental impairment which substantially limits one or more of a person s major life activities; A record of having such an impairment; or Being regarded as having such impairment.   This is a very broad definition and virtually matches the definition found in Section 504 of the Rehabilitation Act of 1973.   Part 1 of the definition includes three critical elements: (1) physical or mental impairment; (2) substantially limits; and (3) major life activity. As noted in 24 C.F.R. 100.201(b), A "major life activity" includes such functions as "caring for one s self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working."   All physical and mental impairments are included and protections extend to those who are substantially limited by alcoholism, emotional problems, mental illness, and learning disabilities. The legislative history of the Fair Housing Amendments Act of 1988 and court decisions since passage of the 1988 Act have extended protection to persons suffering from communicable diseases, including AIDS and persons who are HIV positive. Drug addiction is also included (but not current, illegal use of a controlled substance).   Almost any impairment can be a disability, but only if it is severe enough to "substantially limit" a major life activity. The courts have deemed that "substantially" means "considerable" or to a "large degree" and "precludes impairments that interfere in only a minor way" with major life activities (see Toyota Motor Mfg., Kentucky, Inc., v. Williams - 2002). Relevant factors in determining substantiality include the impairment s nature and severity, its expected duration, and the probable long-term impact resulting from the impairment.   The Supreme Court has ruled that conditions that can be corrected are not disabilities within the context of the law (e.g., a person with severe vision impairments that are corrected by glasses is not disabled).   Part 2 of the definition covers people who have a record of disability, such as a former drug addict or recovering alcoholic.   Part 3 of the definition covers people who are regarded as having such impairment. This protects people who are "perceived" as being disabled, such as elderly or persons who are HIV positive.     The FHA protection against disability discrimination also extends to nondisabled renters or buyers who reside or are associated with people with disabilities. This means that the law prohibits denials of housing opportunities to applicants because they have children, parents, friends, spouses, roommates, patients, subtenants, or other associates who have disabilities. For example, if a resident has a friend with an assistance animal and a property refuses to allow the assistance animal to accompany the friend when visiting the resident, it could be considered discrimination even though the resident is not disabled. In this case, the resident would be denied the right to have a visitor due to the disability of the visitor; this could well be construed as a violation of fair housing law.   Housing operators should remember that the definition of "handicapped/disabled" for fair housing purposes is very broad. Great care must be taken when determining whether the provisions of the FHA relating to the disabled apply to individual circumstances at the property level.

HUD Office of General Counsel Guidance on Local Nuisance and Crime-Free Housing Ordinances - September 13, 2016

On September 13, 2016, the HUD General Counsel issued guidance on the application of the Fair Housing Act (FHA) to the enforcement of Local Nuisance and Crime Free Housing Ordinances against crime victims and others who require police or emergency services. The guidance was issued to explain how the FHA applies to ensure that the growing number of local nuisance ordinances and crime-free housing ordinances do not lead to discrimination in violation of the FHA. State and local governments use a variety of terms, including "nuisance," "chronic nuisance," "crime-free," or "disorderly behavior" to describe the types of ordinances addressed by this guidance. This guidance is primarily directed toward ordinances relating to rental housing.   The guidance primarily focuses on the impact these ordinances may have on victims of domestic violence. The guidance also describes the obligation of HUD fund recipients to consider the impact of these ordinances in assessing how they will fulfill their affirmative obligation to further fair housing. In other words, local governments and landlords who receive federal funding may violate the FHA and the Violence Against Women Act (VAWA) if they have policies that deny "assistance, tenancy, or occupancy" to domestic violence victims due to these nuisance policies.   Background   A growing number of local governments are enacting a variety of nuisance ordinances that can affect housing in potentially discriminatory ways. In Illinois alone, more than 100 such ordinances have been adopted. These ordinances often label various types of conduct associated with a property - whether the conduct is by a resident, guest or other person - a "nuisance" and require the landlord or homeowner to abate the nuisance under the threat of a variety of penalties. The definition of "nuisance" varies by locality, but can include littering, lawn care, or abandoned vehicles. In addition, prohibitions relating to the conduct of a tenant or guest, disorderly or disruptive conduct, disruption of quiet use of neighboring properties, or any criminal conduct on or near the property may also be included. One of the most troubling aspects of the nuisance ordinances is the penalty for "excessive" calls for emergency services, typically defined as just a few calls within a specified period of time by a tenant, neighbor, or other third party, whether or not directly associated with the property.   In some jurisdictions (such as Spokane, WA), an incident of domestic violence is defined as a nuisance without regard to whether the resident is the victim or the perpetrator of the domestic violence. Some ordinances specifically define "excessive" calls for emergency service as nuisances, even when the person in need of services is a victim of domestic violence or another crime or otherwise in need of emergency assistance.   The ordinances usually require housing providers either to end the alleged nuisance or risk penalties, such as fines, loss of rental permits, condemnation of their properties, and in some extreme cases, incarceration. Some ordinances may require the housing provider to evict the resident. In Cincinnati, OH, three calls for emergency police or medical help within a 30-day period is considered a nuisance, and in St. Louis, two calls for services with one year constitute a nuisance.   In many jurisdictions, domestic-violence related calls are the largest category of calls received by police. On average, 12 million individuals per year are the victims of rape, physical violence, or stalking by an intimate partner, and approximately 80% of victims are women. These "nuisance" ordinances are a factor that operates to discourage victims from reporting domestic violence. A grotesque example of this problem occurred in Norristown, PA in 2014. Police warned a woman who had been the victim of domestic violence by her ex-boyfriend that if she made one more 911 call, she and her young daughter would be evicted from her home. The ordinance operated under a "three-strike" policy, allowing no more than two calls to 911 for help. When the ex-boyfriend returned to her home and stabbed her, the woman was too afraid to call the police, so she ran from the home hoping she would not lose her housing. A neighbor called the police and the woman was airlifted to the hospital with very serious injuries. When she returned home a few days later, she was served with eviction papers for violating the local ordinance.   The Issue of Disparate Impact   A local government s policies and practices to address nuisances such as those described here, violate the FHA when they have an unjustified discriminatory effect, even when there is no intent to discriminate. A seemingly neutral policy or practice that has a discriminatory effect violates the FHA if it is not supported by a legally sufficient justification. Discriminatory effects liability is assessed under a three-step, burden-shifting standard requiring a fact-specific analysis. The three-steps are:   Evaluation of whether the challenged nuisance ordinance or practice has a discriminatory effect. If there is a discriminatory effect; Evaluation whether the ordinance is necessary to achieve a substantial, legitimate, nondiscriminatory interest. If this is demonstrated; The plaintiff must demonstrate that there is a less discriminatory alternative.   Intentional Discrimination   A local government may also violate the FHA if it intentionally discriminates through the adoption or enforcement of a nuisance or crime-free ordinance. Two types of intentional discrimination claims may be brought: A local government enacts a nuisance ordinance for discriminatory reasons; or The locality selectively enforces a nuisance or crime-free housing ordinance. In order to make this determination, a number of factors will be examined. The impact of the ordinance; The historical background of the ordinance; The specific sequence of events; Departures from the normal procedural sequence; Substantive departures; and/or The legislative or administrative record.   How Will HUD Assess the Nuisance Ordinances Relative to the FHA?   In 2015, HUD issued a rule of affirmatively furthering fair housing which requires grantees who receive Community Development Block Grant (CDBG), HOME, Housing Opportunities for Persons with Aids, or Emergency Solutions grant funding to conduct an assessment of fair housing for purposes of setting goals to affirmatively further fair housing. In conducting their assessments of fair housing, state and local governments should assess their nuisance ordinances, crime-free housing ordinances, and related policies or practices. If these ordinances, policies, or practices have a discriminatory effect based on a protected characteristic, communities will be expected to examine viable and nondiscriminatory alternatives.

Quid Pro Quo Harassment - HUD Final Rule - September 14, 2016

Quid Pro Quo Harassment - HUD Final Rule - September 14, 2016   On September 14, 2016, HUD published a final rule in the Federal Register - Quid Pro Quo and Hostile Environment Harassment and Liability for Discriminatory Housing Practices Under the Fair Housing Act.   The rule amends HUD s fair housing regulations to formalize standards for use in investigations and adjudications involving allegations of harassment on the basis of race, color, religion, national origin, sex, familial status, or disability. The rule specifies how HUD will evaluate complaints of quid pro quo ("this for that") harassment and hostile environment harassment under the Fair Housing Act. The rule defines "quid pro quo" and "hostile environment harassment," and provides examples of such harassment.   The effective date of the rule is October 14, 2016.     While Title VII of the Civil Rights Act prohibits illegal harassment in employment, until now, no standards had been formalized for assessing claims of harassment under the Fair Housing Act. Courts had applied standards first adopted under Title VII to evaluate claims of harassment under the Fair Housing Act (FHA), but such standards were not always the most suitable for assessing claims of harassment in housing discrimination cases given the differences between harassment in the workplace and harassment in or around one s home. As described in the rule, "One s home is a place of privacy, security, and refuge (or should be), and harassment that occurs in or around one s home can be far more intrusive, violative, and threatening than harassment in the more public environment of one s workplace." The Supreme Court has historically recognized that individuals have heightened rights within the home for privacy and freedom from unwelcome speech, among other things.   In addition to formalizing standards for assessing claims of harassment under the FHA, the regulation clarifies when housing providers and other covered entities or individuals may be held directly or vicariously liable under the Act for illegal harassment or other discriminatory housing practices. There has been significant misunderstanding among public and private housing providers as to the circumstances under which they will be subject to liability under the Fair Housing Act (FHA) for discriminatory housing practices undertaken by others.   The rule amends 24 CFR part 100 to establish a new subpart H, entitled, "Quid Pro Quo and Hostile Environment Harassment."   Quid Pro Quo & Hostile Environment Harassment   Any person who claims to have been injured or believes such person will be injured by prohibited harassment is an aggrieved person under the FHA, even if that person is not directly targeted by the harassment. For example, a property manager awards an apartment to an applicant in exchange for sexual favors. Other applicants, who were denied the apartment due to the manager s provision of the apartment based on sexual favors, are aggrieved persons.   Quid Pro Quo Harassment   Quid pro quo ("this for that") harassment refers to an unwelcome request or demand to engage in conduct where submission to the request or demand, either explicitly or implicitly, is made a condition related to: the sale, rental or availability of a dwelling; the terms, conditions, or privileges of the sale or rental, or the provision of services or facilities in connection therewith; or the availability, terms, or conditions of a residential real estate-related transaction. An unwelcome request or demand may constitute quid pro quo harassment even if a person agrees to the unwelcome request or demand.   The theory has most typically been associated with sex. For example, quid pro quo harassment occurs when a housing provider conditions a tenant s continued housing on the tenant s submission to unwelcome requests for sexual favors.   Hostile Environment Harassment   Hostile environment harassment occurs when unwelcome conduct is sufficiently severe or pervasive as to create an environment that unreasonably interferes with the availability, sale, rental, use or enjoyment of a dwelling, the provision or enjoyment of facilities or services relating to the housing, or the availability or terms of residential real estate-related transactions. Claims of hostile environment harassment should be evaluated from the perspective of a reasonable person in the aggrieved person s position.   Hostile environment harassment does not require a change in the economic benefits, terms, or conditions of the dwelling or housing-related services or facilities, or of the residential real-estate transaction.   Establishing hostile environment harassment requires a showing that: A person was subjected to unwelcome spoken, written or physical conduct; the conduct was because of a protected characteristic; and the conduct was, considering the totality of circumstances, sufficiently severe or pervasive that it unreasonably interfered with or deprived the victim of his or her right to use and enjoy the housing or to exercise other rights protected by the FHA.   Totality of the Circumstances   Factors to be considered in determining whether a hostile environment exists include, but are not limited to: The nature of the conduct; The context in which the conduct occurred; Will consider factors such as whether the harassment was in or around the home; Whether the harassment was accomplished by use of a special privilege of the perpetrator (e.g., using a passkey or gaining entry by reason of the landlord-tenant relationship); Whether a threat was involved; and Whether the conduct was likely to or did cause anxiety, fear or hardship. The severity, scope, frequency, duration, and location of the incident(s); and The relationship of the persons involved. Neither psychological nor physical harm must be shown to prove that a hostile environment exists. Evidence of psychological or physical harm may, however, be relevant in determining whether a hostile environment existed and, if so, the amount of damages to which an aggrieved person may be entitled.   It is particularly important to consider the place where the conduct occurred. In a case decided under the Equal Protection Clause of the Constitution, the Supreme Court described the sanctity of the home as follows: "Preserving the sanctity of the home, the one retreat to which men and women can repair to escape from the tribulations of their daily pursuits, is surely an important value." "The State s interest in protecting the well-being, tranquility, and privacy of the home is certainly of the highest order in a free and civilized society."   When harassment occurs in and around the home, the victim has little opportunity to escape it short of moving or staying away from the home - neither of which should be required. As one court noted in a sexual harassment case under the FHA, the home is a "place where one is entitled to feel safe and secure and need not flee." (Quigley v. Winter, 8th Cir. 2010). Because of the importance of the home, the rule states, "the same or similar conduct may result in a violation of the Fair Housing Act even though it may not violate Title VII." This final rule establishes a lower threshold to show hostile environment under the FHA than that required for employment. Type of Conduct   Prohibited quid pro quo harassment and hostile environment harassment require unwelcome conduct. Such conduct may be written, verbal or other conduct and does not require physical contact. Examples include threatening imagery (e.g., cross burning or swastika), damaging property, physical assault, threatening physical harm, or impeding the physical access of a person with a mobility impairment. Unwelcome conduct can be spoken or written, such as requests for sexual favors. It may include gestures, signs, and images directed at the aggrieved persons. It may include the use of racial, religious or ethnic epithets, derogatory statements or expressions of a sexual nature, taunting or teasing related to a person s disability, or threatening statements. The unwelcome conduct may involve the use of email, text messages or social media.   An individual violates the Act so long as the quid pro quo or hostile environment harassment is because of a protected characteristic, even if he or she shares the same protected characteristic as the targeted person.   With respect to sexual harassment, harassing conduct need not be motivated by sexual desire in order to support a finding of illegal discrimination. Sexually harassing conduct must occur "because of sex." For example, conduct motivated by hostility toward persons of one sex; conduct that occurs because a person acts in a manner that conflicts with gender-based stereotypes of how persons of a particular sex should act; or conduct motivated by sexual desire or control.   Number of Incidents   A single incident can constitute an illegal quid pro quo, or, if sufficiently severe, a hostile environment. In Quiqley v. Winter, the court cited as a quid pro quo violation the implication by a landlord that the return of a security deposit depended on seeing the plaintiff s nude body or receiving a sexual favor. The court also stated that touching of an intimate area of a plaintiff s body is conduct that can be sufficiently severe to create a hostile housing environment - even if it was an isolated incident.                     Establishing Liability for Discriminatory Housing Practices   Direct Liability   A person is directly liable for failing to take prompt action to correct and end a discriminatory housing practice by that person s employee or agent where the housing provider knew or should have known of the discriminatory conduct. The final rule also states that a person is directly liable for failing to fulfill a duty to take prompt action to correct and end a discriminatory housing practice by a third party (i.e., a non-agent) when the person knew or should have known of the discriminatory conduct.   With respect to a person s direct liability for the actions of an agent, the law recognizes that a principal who knows or should have known that his or her agent has engaged in or is engaging in unlawful conduct and permits it to continue is complicit in or has approved the discrimination. With regard to direct liability for the conduct of a non-agent, the traditional principle of liability that a person is directly liable under the Act for harassment perpetrated by non-agents if the person knew or should have known of the harassment, had a duty to take prompt action to correct and end the harassment, and failed to do so or took action that he or she knew or should have known would be unsuccessful in ending the harassment. For example, an owner may be liable for acts of tenants after failing to respond to a tenant s complaints of harassment (see Neudecker v. Boisclair Corp., 8th Cir. 2003). This indicates that management will be held liable for tenant-on-tenant harassment if they know of the harassment and fail to take action. It is important to note however, that not every quarrel among neighbors amounts to a violation of the FHA.   Corrective actions appropriate for a housing provider to use to stop tenant-on-tenant harassment might include verbal and written warnings; enforcing lease provisions to move, evict or otherwise sanction tenants who harass or permit guests to harass; issuing no trespass orders or reporting conduct to the police; and establishing an anti-harassment policy and complaint procedure. When the perpetrator is an employee of the housing provider, corrective actions might include training, warnings, or reprimands; termination or other sanctions; and reports to the police. The housing provider should follow up with the victim of the harassment after the corrective action is taken to ensure that it was effective.   The "knew or should have known" concept of liability is well established in civil rights and tort law. A principal "should have known" about the illegal discrimination of the principal s agent when the principal is found to have had knowledge from which a reasonable person would conclude that the agent was discriminating. For example, if a housing provider s male maintenance worker enters female tenants units without notice using a passkey, and enters their bedrooms or bathrooms while they are changing or showering and exposes himself, and the tenants complain about this conduct to the manager, the manager has reason to know that unlawful discrimination may have occurred. If the manager conveys this information to the owner, and neither the owner nor the manager takes any corrective action, they are both liable for violating the FHA. In such as case, the principal is liable as if the principal had committed the act.     Vicarious Liability   A person is vicariously liable for the discriminatory housing practices of his or her agents or employees based in "agency law." Under agency law, a principal is vicariously liable for the actions of his or her agents taken within the scope of their relationship or employment, as well as for actions committed outside the scope of the relationship or employment when the agent is aided in the commission of such acts by the existence of the agency relationship. Unlike direct liability, someone may be vicariously liable for the acts of an agent regardless of whether the person knew of or intended the wrongful conduct or was negligent in preventing it from occurring. To be vicariously liable, an agency relationship must exist.   Unlike Title VII, the "affirmative defense" against vicarious liability does not apply to fair housing, and no known court case has extended the Title VII affirmative defense to fair housing claims. Under Title VII, an employer may avoid vicarious liability by showing that the employer exercised reasonable care and took corrective action, and that the victim failed to take advantage of administrative options to address the issue. In the housing context, whether the perpetrator is a property manager, mortgage loan officer, a realtor or a management company s maintenance person, a housing provider s agent holds an unmistakable position of power and control over the victimized home seeker or resident. For example, a property manager can recommend (or sometimes even initiate) the eviction of a harassment victim or refuse to renew a lease, while a maintenance employee may withhold repairs to a victim s apartment or may access the victim s apartment without proper notice or justification.   This rule is the first comprehensive guidance from HUD regarding the issue of harassment, and will have a significant impact on fair housing harassment cases in the future - especially those relating to sexual harassment.     All housing operators should become familiar with this final rule and pass it along to their attorneys. Written company policies should be established that make it clear that harassment of any type will not be tolerated. These policies should include examples of prohibited conduct and encourage anyone who feels they have been harassed to file a complaint, and provide details on how to do so.