HUD proposes a change to the 2016 Harassment rule, eliminating a paragraph pertaining to “third-party liability” under the Fair Housing Act of 1968. If the change is implemented, it would not be clear what a resident or advocate could do against a landlord when the landlord knows that a third party (e.g., a neighbor) is harassing a resident, yet the landlord fails to take action against the third party.
Background
HUD published a final rule on September 14, 2016 amending fair housing regulations designed to protect individuals who experience harassment in housing. The courts and HUD have long considered harassment based on race, color, national origin, sex, family status, disability, and religion (“protected classes”) to be prohibited under the Fair Housing Act. However, standards for assessing harassment claims had not previously been formalized in regulation. To address this, the rule added to the existing regulation definitions of the terms “quid pro quo” (“this for that”) harassment and “hostile environment” harassment, and clarified standards for “direct liability.” It is the last feature that the current Administration seeks to modify, eliminating paragraph (a)(iii) of 24 CFR part 100.7. The proposed change from the Administration will weaken fair housing enforcement.
The 2016 rule provided in 24 CFR 100.7 several direct and vicarious liability principles for who may be liable under the Fair Housing Act that were not previously contained in HUD’s regulations. Paragraph (a)(iii) allows for liability on the part of a housing provider for the actions of a third party, such as neighbor, who harasses another resident. In a number of past cases, HUD held a landlord liable for neighbor to neighbor harassment when the landlord knew about the harassment and had an obligation to address it under a lease, but did not.
Section 100.7(a) of the 2016 rule is titled “Liability for Discriminatory Housing Practices.” Subparagraph (a)(1) is “Direct Liability. A person is directly liable for:
“Failing to take prompt action to correct and end a discriminatory housing practice by a third-party, where the person knew or should have known of the discriminatory conduct and had the power to correct it. The power to take prompt action to correct and end a discriminatory housing practice by a third-party depends upon the extent of the person's control or any other legal responsibility the person may have with respect to the conduct of such third-party.”
HUD’s Proposal
The proposal was sent to the Office of Information and Regulatory Affairs (OIRA) at the Office of Management and Budget (OMB) on September 23. The proposed change is titled “Reconsideration of Third-Party Liability Under the Fair Housing Act.” The proposal was listed in HUD’s Spring 2020 Regulatory Agenda. HUD claims existing law does not support the interpretive position that the Fair Housing Act creates negligence-based liability for a property owner or manager for discriminatory conduct by a third party who is not a common law agent of the property owner or manager. The description states no other portions of the 2016 rule are changed.
The description of the proposed change is at: https://bit.ly/33XFmaL
The 2016 final rule is at: https://bit.ly/3ct1JZy