HUD Proposes Rule Expanding Housing Providers’ Liability for Harassment

The Department of Housing and Urban Development (HUD) recently issued a proposed rule that introduces formal definitions for two types of harassment claims: quid pro quo and hostile environment, and clarifies when a housing provider can be held directly or indirectly liable under the Fair Housing Act for illegal harassment or other discriminatory housing practices.

Under the proposed rule:

Hostile Environment Harassment occurs when a person becomes the victim of “sufficiently severe or pervasive” conduct that takes away from their ability to use and enjoy the housing.

Quid Pro Quo Harassment occurs when a person (e.g., property management staff) makes an unwelcome request or demand, and it makes a resident’s compliance a condition related to their housing.

Though NAHB strongly supports measures to curtail quid pro quo and hostile environment harassment in housing, a number of provisions in the proposed rule could have significant impacts for the multifamily building community, and to some small extent, on single-family builders as well.

The proposed rule establishes direct liability under three circumstances: for his or her own discriminatory practices, failing to take prompt action to correct and end a discriminatory housing practice by an employee in a situation where the housing provider knew or should have known of the discriminatory conduct, and failing to take prompt action to correct and end a discriminatory housing practice by a third-party when the housing provider knew or should have known of the discriminatory conduct.

However, the proposed rule does not provide clarity or concrete examples as to when housing providers will and will not be liable for acts of harassment committed by third parties.

For example, if a landlord is aware that Tenant A has asked Tenant B to go on numerous dates, the level of knowledge the landlord must have about these interactions before he or she becomes liable for not taking action against Tenant A remains unclear.

NAHB members should take pride in their responsibility to provide safe housing, and ensure measures are taken to minimize tenant harassment. This includes adopting employee policies against quid pro quo and hostile environment harassment, processes to report such harassment, policies to sanction employees who engage in such harassment, employee training, and most importantly, enforcement of such policies.

However, NAHB does not agree that the burden to resolve charges of discrimination between tenants, or between a tenant and any other third party, such as a delivery person, should fall on the housing provider.

“An apartment owner or manager does not have the same power or authority to prohibit contact between tenants as a court can exert through a restraining order,” NAHB said in its comments to the agency. “Where no restraining order or court decree exists, HUD should not expect the property owner to act as de facto judge.”

It is also possible under the proposed rule for a housing provider to be liable for the acts of one of their employees even if the provider is not aware of the harassing behavior, and even if the provider takes immediate steps to remove the offending employee. This is often referred to as vicarious liability.

NAHB submitted comments to the agency recommending that – at the very least – HUD provide an affirmative defense to housing providers, if they (1) exercise reasonable care to prevent and correct any harassing behavior, or (2) the offended party failed to take advantage of any corrective or preventative opportunities provided by the housing provider.

Housing providers should not be held liable for discriminatory or harassing actions taken by third parties against their tenants, and employers should not be denied a defense from liability. With respect to both, NAHB believes that guidance is a better vehicle than regulation.

However, if HUD intends to move forward with the proposed rule as is, NAHB has urged the agency to focus on providing the regulated community with greater clarity on housing provider liability for the acts of third parties, and stronger protection for housing providers that take proactive steps to curb such harassment.

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