Creating software to meet the demands of Property Managers (“PM”) is a constant challenge, to say the least; to reference the industry’s status quo is an anomaly in itself, as the game, the players, and the rules, are suspended in a state of perpetual motion.  My head spins after writing only one sentence about property management’s fast-paced environment.  This is exactly the reason I like to share industry news and other tidbits, so that hopefully you can be better informed and focused on growing your business and maximizing profitability.

Providing housing for every man, woman, and child is the social and humanitarian goal, and thus, a government concern.  Consider the following: [Government involvement = Regulation] and [Regulation = Risk for PM]; thus, according to the Transitive Property of…Property Management…Gov’t involvement equals risk to property managers.  The Fair Housing Act protects the rights of those seeking homes, and it is this same legislation that provides the authority to punish those responsible for wrongdoings in the management of these properties.

Major setback can be government fines, legal settlements, or fees.  No one wants to deal with paying these or the time it takes to fight them.  That’s why, when we caught wind of Barry and Barbara Bernsen’s troubles in Chicago with the Fair Housing Act, we wanted to share the story…

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From Recent News:

Landlords, Barry and Barbara Bernsen, of Chicago’s northern sudburbs are accused of housing discrimination and face civil action for allegedly “catering to college kids…and systematically refus[ing] to rent housing to anyone but Northwestern University (“NWU”) Students.”    Interfaith Housing Center of the Northern Suburbs (“Interfaith”) is a fair-housing organization serving Chicago’s Metropolitan residents, and following one particular constituent’s complaints, Interfaith employed an undercover investigation focused on unearthing violation(s) of the Federal Fair Housing Act.

Interfaith’s investigation consisted of running three “test prospects” through the Bernsen’s rental housing application process.

  1. First,they sent an undercover tester posing as a Northwestern student (“T1”); the Bernsen’s offered an apartment “without incident,” and Barbara was noted as saying the property was “pretty quiet.”
  2. The second tester (“T2”) was presented as the wife of an incoming Northwestern student, but she was approached quite differently.  Barry[2] reportedly told her that “the building was not suitable for families and that if she had a family she would be unhappy there.”
  3. The final tester (“T3”) posed as T2’s husband (also a student), and he got the same response as his “spouse” when he spoke to Barry, “…the building was not suitable for families…[they] would be unhappy there.”

 Housing Act (from the HUD’s website)

Title VIII of the Civil Rights Act of 1968 (Fair Housing Act), as amended, prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on race, color, national origin, religion, sex, familial status (including children…)                                                                 

In Addition: It is illegal for anyone to:                                                                                                                                                  —Threaten, coerce, intimidate or interfere with anyone exercising a fair housing right…or make any statement that indicates a limitation or preference based on race, color, national origin, religion, sex, familial status, or handicap.

According to the news article, the issue went before a U.S. District Court, with Interfaith filing a civil suit.  The article discusses the legitimacy of Interfaith’s move, noting that U.S. District Judge Sharon Coleman rejected of the Bernsens’ motion to dismiss.  Her Honor explained the standard or rule used to decide whether civil action (trial) is warranted in a Fair Housing case,

“…a district court applies the ‘ordinary listener’ standard when determining whether a statement ‘indicates’ a preference in violation of the Fair Housing Act.”

She concluded that Barry’s alleged statements to prospective tenants “may lead an ordinary listener to believe that defendants prefer not to rent apartments to people with families,” thus the standard was met and trial is warranted.  Furthermore, the article went on to mention that “…similar claims have succeeded in the 10th Circuit [appellate court], and Interfaith may have a case, according to the eight-page decision.”

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What does this tell property managers?  Beware the provisions of  Fair Housing.  Most managers are aware of the Fair Housing Act, but understanding the nuances will help keep you out of trouble.  This legislation was initially created in 1968, alongside Civil Rights legislation (and has evolved and expanded over the next 4 decades), and the language bears strong similarities to Civil Rights laws as well as those enforcing Women’s Rights.  This certainly is not the first time we’ve seen the terms…  discrimination based on “…race, color,national origin, religion, sex…” .. familial status…

In all honesty, it’s hard to tell whether or not, from the reports, more was actually said to discourage this family from moving into the community.  In all likelihood, more was said and done than reported.  However, the point of all of this still stands.  This could have been a disgruntled family, they could have been looking for a hand-out, or just wanting to stir up some trouble.  Regardless, avoiding these issues with your business is paramount.

It’s easy to see the benefits of keeping a community for college students and families separated.  That’s why it’s hard to find these managers at serious fault here, at least on the surface.  So, where do you draw the line?  Has anyone else experienced a similar issue?  Does anyone have any creative methods for addressing this problem while keeping expectations in line and improving the experience for the tenant?

 


[1] Barbara only spoke to the 1st tester (T1), who was rightfully treated, thus “Interfaith cannot sue Barbara in her personal capacity.

[2] Barry allegedly made the offending statements to the 2nd and 3rd testers  ( T2  T3 ), who were wrongfully treated, thus he could be held personally liable.

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