Fair Housing Sex Education for Property Management

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As one might expect, a couple of quips on the topic of sex charged a packed house at the beginning of a Fair Housing session at the National Apartment Association’s Education Conference & Expo in San Francisco. But the mood soon got serious when attorneys for Kimball, Tirey & St. John began sharing eye-opening sexual harassment and sex discrimination cases that have cost the multifamily industry dearly.

A landlord in Bakersfield, California was slapped with a $2.13 million judgment for sexually harassing 25 women. The claims involved not only physical harassment but taking adverse actions against women who opposed his advances. The landlord was ordered to have independent management on all of his properties and not allowed to interact with tenants.

In another case, a property manager harassed 21 single, low-income women over two and a half years. He let himself in to apartments while the women slept or showered, and asked them to pose in lingerie in exchange for forgiveness of rent or late payments. Those who didn’t comply were evicted. The judgment was a stiff $1 million, but attorney’s fees tacked on another $4 million.

Sex discrimination and sexual harassment ‘a high stakes issue’

Craig McMahon has handled hundreds of discrimination complaints in the conventional and affordable apartment arenas, including sexual harassment claims. He cited several other examples from published cases not handled by Kimball, Tirey & St. John, with settlements that ranged from $50,000 to $2 million.

“This is a high stakes issue,” he said.

And despite more awareness than ever before about sex discrimination and sexual harassment in work and living spaces, it’s still a problem and could become a bigger one. An indicator is a rise in complaints involving sex discrimination and sex harassment in the employment industry, McMahon says.

“That’s why we think it’s likely to increase in terms of prevalence in our industry,” he said.

And, as evidenced by the amount of money awarded in claims, a suit isn’t child’s play. An average sexual harassment case costs $150,000 to defend, but an even larger price can be paid. Reputation damage and costs associated with distraction from the day-to-day operations of the enterprise can be just as steep.

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Changing landscape of protected classes redefining playing field

Sex discrimination and sexual harassment come in all shapes and sizes and don’t just fit the old definition of lewd comments directed at women or treating women differently than men. Traditionally, women have filed sexual harassment claims, but more are coming from men. McMahon says one in six claims are from a man.

The changing landscape of protected classes also now embodies transgender issues (gender identity and gender expression) and sexual orientation, as well as consideration for victims of domestic violence – including men. And a seemingly harmless suggestion that a pregnant mother consider a two-bedroom apartment instead of a one-bedroom based on a property’s occupancy criteria could draw a familial status complaint.

HUD memos address sexual harassment, seek to clarify regulations

In 2008, due to the rapidly increasing number of complaints, HUD issued a memorandum to property owners designed to address sexual harassment. The memo states that a property owner or manager “may be either directly or vicariously liable for sexual harassment.

Under the Fair Housing Act, a property owner or manager who engages in sexual harassment will be directly liable for the harm caused by his or her own conduct. In addition a property owner or manager who directs his or her employees, agents or contractors to engage in sexual harassment, or who knows or should have known about sexual harassment perpetuated by such persons but fails to take action to stop it, is directly liable for any resulting harm. In general, such persons are responsible as if they had personally engaged in sexual harassment.

Further, in 2015 HUD issued a proposed rule, “Quid Pro Quo and Hostile Environment Harassment and Liability for Discriminatory Practices”, that seeks to clarify regulations against harassment based on any protected class. The rule includes sex discrimination, another area of concern, especially as transgender and sexual orientation issues have made recent headlines.

Landlords should base decisions on business, not sex and personal characteristics

Attorneys say property managers and owners now must be more diligent than ever to avoid a mistake that could cost millions.

“It’s important that landlords base their housing decisions on what it is they should care about – does the person pay the rent on time – not on personal characteristics such as gender identity and gender expression,” attorney Shawn Bankson said.

Potentially even worse than being accused of sex discrimination or sexual harassment committed by your employees or contractors is knowing about such conduct and not doing anything about it. As noted in the HUD memorandum quoted above, turning a blind eye can be just as damaging.

“It’s a good reminder to everybody, if you receive a complaint on harassment, based on any protected class, you need to take it seriously,” he said. “You need to investigate and get the facts, you need to document and take appropriate action. Ideally, you should have a zero tolerance policy for any type of harassment.”

Implement a policy and hold property accountable

A policy, McMahon says, is only as good as training and enforcement. Training should include educating employees on the importance of the conduct of vendors and contractors. A complaint about a plumber – or even from one – carries with it the same potential repercussions that can be just as stiff as those involving an employee.

“Make sure a policy is reviewed by an attorney who understands landlord and tenant laws, and fair housing law,” he said. “Do have a written policy and hold yourself accountable, so you have consistent treatment. Make sure it’s implemented.”


Contributing Editor, Property Management Insider
President, Ballpark Impressions, LLC

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Tim Blackwell is a long-time publishing and printing executive in the Dallas/Fort Worth area who writes about the multifamily housing and transportation industries. He has contributed numerous articles to Property Management Insider, and worked as a newspaper reporter in the D/FW area. Blackwell is president of Ballpark Impressions, and publishes the Cowcatcher Magazine. He is a member of the Fort Worth Chapter/Society of Professional Journalists.

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