HOAleader.com - Tip of the Week - August 12, 2022
Published: Fri, 08/12/22
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HOAleader.com - Tip of the Week - August 12, 2022
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In this week's tip, we report on an HOA in Denton County, Texas, that might need to beef up its legal budget as a result of a new provision in its governing documents. Our experts predict fair housing claims are about to come rolling in.
The HOA has reportedly passed a provision banning renters from paying rent in the community with Section 8 government subsidies and will impose a $300 per week penalty on homeowners who accept such payments, according to The Real Deal, a Texas news outlet.
The "legislation," as the news outlet calls it (making it unclear whether it's a rule or amendment to the governing documents), reportedly reads, "A Rent House may not be used for a publicly financed or subsidized housing program, such as Section 8 Housing."
According to that report, the Providence Village HOA apparently issued a press release stating: "The amendment passed with 52.8 percent of homeowners in support. This is a huge win for the community…We look forward to keeping our community beautiful and protecting property values."
However, the report also includes homeowners who say the provision that passed wasn't the one that was put before them.
Despite the HOA's strong initial defense, it appears the HOA may be backing away slightly from its immediate enforcement of the program. In the weeks that followed the announcement, the HOA reportedly eased up and agreed that current leases could continue.
Our experts universally raised concerns about the possibility that such a rule could violate federal or state fair housing rules.
"I think there are fair housing concerns," reports Elina Gilbert, a shareholder at Altitude Community Law in Lakewood, Colo., who has specialized in community association law for 22 years. "I think a policy like this could affect a protected class, such as race, ethnicity, national origin, or familial status, because it would hit some folks harder than others. I'd never recommend my clients change their documents to do something like this."
Patricia A. Ayars, founder of Ayars & Associates in Glastonbury, Conn., who has been practicing association law for more than 30 years, has a similar concern. "You worry about discrimination based on familial status," she states. "There are a lot of single-parent households that might qualify for the voucher program because they have lower incomes than a couple. So there could be a disparate impact on those renters. They would perhaps have a familial status discrimination claim."
Jennifer Biletnikoff, a shareholder in the Naples, Fla., office of Becker & Poliakoff, who has represented condos and HOAs for more than 15 years, also raises this red flag. "I think there could be the potential for a huge discrimination claims as a result of this action," she says. "That would be my biggest concern.
There are a number of other legal reasons such a move might not pass muster. And that $300 fine? It would also be legally questionable in many states. Read more our new article: https://www.hoaleader.com/members/4561.cfm
Best regards,
Matt Humphrey
President
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