Mediation Can Help Preempt Liability for Neighbor-to-Neighbor Harassment

Few community association board members ever want to get involved in neighbor-to-neighbor disputes — but, under a U.S. Department of Housing and Urban Development (HUD) rule, sticking their heads in the sand could result in association liability for harassment under the Fair Housing Act (FHA).

“The HUD regulations were adopted in October 2016,” says Brendan Bunn, a partner practicing community association law with the Fairfax, Va., law firm Chadwick, Washington, Moriarty, Elmore & Bunn, P.C. “But a number of associations around the country still may not realize that an FHA claim can be filed against them arising out of what seems like a neighbor-to-neighbor dispute.”

One way associations can reduce the odds of liability is to pursue mediation of disputes before they escalate. HUD has explicitly identified mediation as a “powerful tool” associations can use to control or remedy a resident’s unlawful discriminatory conduct.

The FHA prohibits harassment based on race, color, religion, national origin, sex, familial status, or disability. The 2016 final rule provides that housing providers, including community associations, are “directly liable” for such harassment by third parties when the provider:

  • Knew or should have known of the harassment,
  • Had the power to correct it, and
  • Failed to take prompt action to do so.

“The HUD rule in part codifies the ruling in the 1998 Reeves v. Carrollsburg Condominium Unit Owners Association case, where there was an avowed racist harassing a neighbor,” Bunn says. “The stuff he did to her was beyond the pale, and the association didn’t really do much.” The court found the association had a duty to protect the victim from a “hostile housing environment,” and the case ultimately settled for $550,000.

“It sat there on the books for years, and all of a sudden HUD issued the rule based on that case,” Bunn says. “Very few jurisdictions were following the ruling before the final rule.”

To learn about the rule’s implications for association liability, and how mediation can reduce the risk, read our new article, How Associations Can Avoid Liability for Neighborhood Harassment.

Best regards,
Matt Humphrey

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