The Best of the Legal Hotline: Fair Housing Issues


 Debbi Conrad, WRA senior attorney and director of legal affairs  |    April 04, 2022
Legal Hotline

In honor of Fair Housing Month, this month’s WRA Legal Hotline article features questions and answers relating to fair housing concerns that impact real estate transactions.

Offensive restrictions and covenants

The cooperating broker received a copy of the covenants and restrictions from 1949 on a property after the buyer’s offer had been accepted. The buyers were upset when they read them. In one portion, the documents say ownership and occupation in the subdivision were restricted to members of the white race only, except those who may be employed as part-time or full-time domestic servants. The title company said to Google the Fair Housing Act of 1968, which says the refusal to rent or sell to someone because of race is prohibited. If the broker gives the buyers this information, will that take care of this concern? Does the FHA trump the covenants and restrictions? 

Yes, the Fair Housing Act of 1968 makes these covenants and restrictions illegal and unenforceable. For nearly 50 years, developers wrote racially restrictive covenants into the title of millions of new homes. Some developers included restrictions in the plat maps or the associated covenants and restrictions, while others affixed deed restrictions as they sold off lots. These covenants ran with the land, and anyone who dared to breach a covenant — even decades after it was put into place and even after the property had changed hands multiple times — risked ending up in court.

In 1948, the U.S. Supreme Court unanimously ruled racially restrictive covenants were unenforceable. In Shelley v. Kraemer, the court held judicial enforcement of racially restrictive covenants was unconstitutional. Nonetheless, developers continued to record such covenants to influence where minority individuals were able to reside.

Twenty years after the U.S. Supreme Court ruling in Kraemer, the Fair Housing Act was passed and outlawed these covenants altogether. The act prohibits discrimination in the sale, rental and financing of dwellings and other housing-related transactions, based on race, color, national origin, religion, sex, familial status and disability. The act officially made the use of racially restrictive covenants in housing illegal and prohibited restrictive covenants from being upheld both privately and judicially. 

However, this ruling did not erase racial restrictions from property deeds and title records. As a result, the language of segregation remains in the fine print of deeds and restrictive covenants today. 

See “Do You Have a Racist Deed?” in the March 2021 Wisconsin Real Estate Magazine at www.wra.org/WREM/Mar21/RacistDeed

“Dear seller” letters

What should an agent’s role be when it comes to “love letters” that buyers are sending to sellers?

Whether the content of the buyer’s “dear seller” or “pick me” letter could raise liability issues for the buyer, the seller or the broker would be transaction-specific and depends on the content of the letter. For example, information contained in the letter could raise a misrepresentation issue if it is inaccurate and the seller relied on the information when accepting the offer. The content of the letter could raise fair housing issues if decisions regarding the sale are made based on the buyer’s, or another buyer’s, protected class status. 

The broker may refer the buyer to the nondiscrimination provisions of the buyer agency agreement, which provide:

NON DISCRIMINATION Client and the Firm and its agents agree that they will not discriminate based on race, color, sex, sexual orientation as defined in Wisconsin Statutes § 111.32(13m), disability, religion, national origin, marital status, lawful source of income, age, ancestry, family status, status as a victim of domestic abuse, sexual assault, or stalking, or in any other unlawful manner.

An agent should not advocate for the buyer to write a letter so that potential liability for everyone can be avoided. An agent also should not advise buyers what should be in a “dear seller” letter and should not offer guidance as to what information would be considered “safe” and not a fair housing violation should the buyer choose to write a letter.
  
Having identified potential issues, buyers may choose to provide “pick me” or “dear seller” letters with offers on a case-by-case basis. A letter not incorporated by reference may not be presented to the seller, but any document can be made part of an offer if it is incorporated by reference into the offer to purchase. In addition, the offer presentation rules in Wis. Admin. Code § REEB 24.13 provide for the submission of all written proposals, not just offers.

Wis. Admin. Code § REEB 24.13(1): “Refusal prohibited. Licensees shall not refuse to draft or submit any written proposal unless the terms of the written proposal would be contrary to specific instructions of the other party.”

Wis. Admin. Code § REEB 24.13(3)(a): 
“Fair presentation of written proposals.
(a) Licensees shall present all written proposals in an objective and unbiased manner to their clients and customers. Licensees shall inform their clients and customers of the advantages and disadvantages of all submitted written proposals.”

“Written proposal” means any written document provided by one party to another during the course of a transaction, including but not limited to notices, offers, counteroffers, options, exchanges, rental agreements and amendments.

See the September 2020 Legal Update, “Multiple Offers and Love Letters,” at www.wra.org/LU2009, the WRA’s “dear seller” letters resource page at www.wra.org/DearSeller, and “Love Letters or Liability Letters?” at www.nar.realtor/fair-housing-corner/love-letters-or-liability-letters.

Assistance animals

The landlord has a four-plex apartment building that does not allow pets. A father and severely autistic son live in the lower unit, and the son is very afraid of animals. The son’s fear of animals is part of the reason the father and son rented in a “no-pet” building. Approximately two months ago, the landlord rented the unit right above this one to a woman and her young son, and she knew it was a no-pet building.

The woman emailed the landlord stating she has a five-year-old goldendoodle dog that has been living with her boyfriend since she moved into this apartment. Her son is having behavioral issues, and his social worker suggested the dog should move in and be his emotional support dog so he can continue to grow emotionally. She attached a short letter from a county worker saying the child needs this dog. It is not fair to allow a dog in the building for the long-term tenant, but the landlord does not want to deny the newer tenant their rights and be accused of discrimination. How does the landlord proceed? 

The federal Fair Housing Act protects the right of people with physical or mental disabilities to keep assistance animals, service animals and emotional support animals, even when applicable policies or rules explicitly prohibit pets. The law generally requires the housing provider to make an exception to any no-pet restriction as a reasonable accommodation as long as the accommodation does not constitute an undue financial or administrative burden for the complex or fundamentally alter the nature of the housing. A reasonable accommodation is a change in rules, policies, practices or services so that a person with a disability will have an equal opportunity to use and enjoy a dwelling unit or common space.

Assistance and service animals that assist persons with disabilities are considered to be auxiliary aids and are exempt from an owner’s pet restrictions, pet security deposits and extra pet rent. Assistance animals include, without limitation, guide dogs for persons with vision impairments, hearing dogs for people with hearing impairments, and emotional assistance animals for persons with chronic mental illness. 

If a tenant needs an assistance animal, they should request a reasonable accommodation, preferably in writing, from the landlord. The request should state the disability — if not readily apparent — and indicate the relationship between their ability to function and the assistance of the animal. In addition, the tenant should include a letter or prescription from an appropriate health professional, such as a therapist or physician, verifying the need for the assistance or service animal. The tenant need not disclose the details of the disability nor provide a detailed medical history. Federal law does not include any specific requirements for registration or credentials for the animal involved.

A landlord may deny the request by a person with disabilities for a reasonable accommodation to have an emotional support animal or any other assistance animal if:

  • The person does not have a disability, does not have a disability-related need for the animal or fails to provide the documentation requested.
  • Allowing the animal would impose an undue financial and administrative burden or would fundamentally alter the nature of services provided by the landlord.
  • The specific animal in question poses a direct threat to a person’s health or safety that cannot be reduced or eliminated by another reasonable accommodation.
  • The specific animal in question would cause substantial physical damage to a property that cannot be reduced or eliminated by another reasonable accommodation.

When a housing provider refuses a requested accommodation, the provider should discuss with the requester whether there is an alternative accommodation that would effectively address the requester’s disability-related needs. If an alternative accommodation would effectively meet the requester’s disability-related needs and is reasonable, the provider must grant it. An interactive process in which the housing provider and the requester discuss the requester’s disability-related need for the requested accommodation and viable alternative accommodations is helpful to all concerned because it can result in an effective accommodation for the requester that does not pose an undue financial and administrative burden for the provider.

On the face of it, the landlord may proceed to process the request for the dog. Given the standards above, it is not clear what would be the basis for denial. Does the landlord have evidence that having the dog live in the building poses a direct threat to a person’s health or safety that cannot be reduced or eliminated by another reasonable accommodation? That seems like a possible theory, but apparently there is no documentation and evidence regarding the condition of the autistic son and the impact of the dog should this matter end up in court.

When cases involving competing disabilities have been decided in court, it is always a fact-based specific result. At times, the person who was there first is given priority, and other times, emphasis is given to the one who has made a written request for a reasonable accommodation along with supporting documentation. When there are two written requests for a reasonable accommodation, then the interactive process may be more productive. In this scenario, the decision might be better able to be made if there was a written request by the father and the son seeking a reasonable accommodation to deny the request of the woman and her son, but that does not make a lot of sense. Because there are only four units, it may not be possible to find a mutual solution to accommodate both parties.

A landlord would want to consult their private legal counsel for advice and answers to any questions. 

See “Sorting Through Assistance Animal Requests: HUD’s new assistance animal guidance” in the March 2020 Wisconsin Real Estate Magazine at www.wra.org/WREM/Mar20/AssistanceAnimals and the sources cited therein for the latest guidance regarding this issue. 

Also see:

Tenant requests grab bars and railings after back surgery

A tenant who has lived in the property for more than five years recently requested shower grab bars be installed and railings be installed outside each of the two entrances of the home. He has offered to share in the cost with the owners. The owners suggested “suction grab bars” for the shower and no exterior railings be installed because they do not want to make any permanent changes to their home. The law requires landlords to make reasonable accommodations for tenants with disabilities. The tenant has been battling health issues due to back surgery. He was just released from a 35-day hospital stay, during which he also had a heart attack. The law seems fuzzy and unclear about the exact responsibility of the landlord. Must the owners accommodate these requests, and are they financially responsible?

Both federal fair housing law and Wis. Stat. § 106.50(2r) prohibit discrimination against persons with disabilities and enable a person with disabilities to make reasonable modifications to a property the person occupies if the modifications are necessary for the person with disabilities to have full enjoyment of the housing.

A reasonable modification is a structural modification made to allow persons with disabilities to have the full enjoyment of housing and related facilities. Reasonable modifications are usually made at the resident’s expense. A landlord may require a restoration agreement under Wis. Stat. § 106.50(2r)(b)3 but may not increase any customary security deposit.

Examples of a reasonable modification would include allowing a person with a disability to install a ramp into a building, lower the entry threshold of a unit or install grab bars in a bathroom. In most cases, the tenant would not have to pay to remove the modifications unless the landlord can show that the modifications would negatively impact the future use of the property. Minor changes to the property such as toilet arms, additional handles and removal of some doors generally do not rise to the level of impacting the future use of the property. 

See the Joint Statement of the Department of Housing and Urban Development and the Department of Justice: Reasonable Modifications Under the Fair Housing Act at www.justice.gov/sites/default/files/crt/legacy/2010/12/14/joint_statement_ra.pdf for more information. Wis. Stat. § 106.50(2r)(b)3 may be found at docs.legis.wisconsin.gov/statutes/statutes/106/III/50.

Distribution of church literature

A developer is working on a subdivision across from a church and church school. The church school asked if the developer could hand out its literature to the subdivision’s prospective buyers. Would it be considered discrimination if the developer distributed the literature with its lot sales information?

Handing out the church literature to prospective buyers may be perceived to be indicating a preference for buyers who belong to that church or who are of that religion. It may be seen as the seller looking for buyers of that faith. 

The federal Fair Housing Act makes it unlawful to indicate a preference, limitation or discrimination based on race, color, religion, sex, handicap, familial status or national origin, or an intention to make any such preference, limitation or discrimination. Wisconsin statutes add sexual orientation, marital status, lawful source of income, age and ancestry to 
the list of protected classes. 

Section 804(c) of the federal Fair Housing Act makes it unlawful to make, print or publish any notice, statement or advertisement with respect to the sale or rental of a dwelling that indicates a preference, limitation or discrimination based on race, color, religion, sex, handicap, familial status or national origin, or an intention to make any such preference, limitation or discrimination. 

See the April 2020 Legal Update, “Fair Housing 101,” at www.wra.org/LU2004.

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