Jason Rose

Here is another example of a recent Fair Housing Act lawsuit settled by the United States Department of Justice (“DOJ”). I try to post case summaries in order to provide timely updates to real estate professionals about the "dos and don'ts" under the Fair Housing Act, since fair housing is such an important issue.

On Tuesday, November 3, 2009, the DOJ announced the largest monetary payment ever obtained by the DOJ in the settlement of a case alleging housing discrimination in the rental of apartments. Los Angeles apartment owner Donald T. Sterling agreed to pay $2.725 million to settle allegations that he discriminated against African-Americans, Hispanics and families with children at apartment buildings he controlled in Los Angeles.

The lawsuit, filed by the DOJ in August 2006, alleged that the defendants, Donald T. Sterling, his wife Rochelle Sterling and the Sterling Family Trust, engaged in discriminatory rental practices on the basis of race, national origin and familial status (having children under 18) at various apartment buildings that they owned and managed in Los Angeles. Among other things, the lawsuit alleged that the defendants discriminated against non-Korean tenants and prospective tenants at buildings the defendants owned in the Koreatown area of Los Angeles.

The lawsuit alleged that the defendants violated the Fair Housing Act on the basis of race, national origin and familial status by refusing to rent to non-Korean prospective tenants, misrepresenting the availability of apartment units to non-Korean prospective tenants, and providing inferior treatment to non-Korean tenants. The lawsuit also alleged that the defendants refused to rent to African-American prospective tenants and misrepresented the availability of apartment units to African-American prospective tenants in the Beverly Hills section of Los Angeles. In addition, the lawsuit alleged that the defendants refused to rent to families with children and misrepresented the availability of apartment units to families with children throughout the buildings that they owned or managed. Additionally, the lawsuit alleged that the defendants made statements and published notices or advertisements in connection with the rental of apartment units that expressed a preference for Korean tenants and expressed discrimination against African-Americans and families with children.

In court filings, the DOJ presented evidence that the defendants' employees prepared internal reports that identified the race of tenants at properties that the defendants purchased in Koreatown. Additionally, the defendants made statements to employees indicating that African-Americans and Hispanics were not desirable tenants. The DOJ also presented expert analysis showing that the defendants rented to far fewer Hispanics and African-Americans than would be expected based on income and other demographic characteristics.

The defendants, who manage their apartments under the name Beverly Hills Properties, own and manage approximately 119 apartment buildings comprising over 5,000 apartments in Los Angeles County. The settlement also resolves two related lawsuits filed by former tenants at one of the properties. The two families, an African-American family and an interracial married couple with bi-racial children, alleged that the defendants demolished the private yards that had been part of their apartment and took other actions against them because of their race.

Under the terms of the settlement, the defendants are required to pay a $100,000 civil penalty to the United States. The defendants are also required to pay $2.625 million into a fund that will be used to pay monetary damages to persons who were harmed by the defendants’ discriminatory practices, including the tenants in the two related lawsuits discussed above. Any money left over would go to further fair housing education or enforcement in Los Angeles. The settlement must be approved by the court.

In addition to the payments in damages and civil penalties, the settlement agreement requires the defendants to take various steps to ensure non-discriminatory practices at their rental properties, including:

• Enjoining the defendants from discriminating on the basis of race, national origin, and familial status;

• Requiring the defendants to implement a self-testing program over the next three years to monitor their employee’s compliance with fair housing laws at their properties. The testing would be conducted by an independent contractor that would report the results to the defendants and the DOJ;

• Requiring the defendants to maintain non-discriminatory practices and procedures; and

• Requiring the defendants to obtain fair housing training through an independent contractor for their employees who participate in renting, showing or managing apartments at the properties.

Source: U.S. Department of Justice press release and legal complaint and settlement documents(portions of press release used with permission)

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To learn more about fair housing issues (along with a variety of other real estate topics), please visit us at www.123ConEd.com. We are the leading online provider of Michigan real estate continuing education. All of our courses are fully approved and properly certified by the State of Michigan, and are offered online.

Copyright © 123 ConEd LLC 2009. All rights reserved.

About an hour ago or so, I received a contact message here on ActiveRain from someone named "Mr. Kona" that was one of those Nigerian-like phishing scams. I copied the message below (below the line). I was wondering whether anyone else here on ActiveRain also received this message or anything similar. This is the second time in the past few months that I've received one of these messages.

Thanks!

____________________________________

Contact from mr kona: From MR Christ Moore

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Here is another example of a recent Fair Housing Act lawsuit brought by the United States Department of Justice (“DOJ”). I try to post case summaries in order to provide timely updates to real estate professionals about the "dos and don'ts" under the Fair Housing Act, since fair housing is such an important issue.

Last Friday (October 16, 2009), the DOJ filed a lawsuit against TK Properties L.L.C., its owner, and two employees (property managers), for violating the Fair Housing Act by discriminating on the basis of race. The lawsuit alleged that the defendants violated the Fair Housing Act by harassing and making discriminatory statements to an African-American family residing at Lakeport Village Apartments (located in Sioux Falls, South Dakota). In addition, the lawsuit alleged that the defendants intimidated white tenants who came to the family's defense.

Lakeport Village Apartments is a 48-unit apartment complex that is comprised of three buildings, each with 16 units. The complex is home to many families with children. On December 1, 2008, TK Properties hired Ann Wagner (hereinafter “Manager Wagner”) and Corey Anderson (hereinafter “Manager Anderson”) as on-site property managers.

On January 5, 2009, Michelle Chevalier, a white tenant at Lakeport Village, complained to Manager Wagner about noise coming from an apartment being rented by Charlotte and Untoma Gadsden (who lived there with their three minor children and one adult child). The Gadsdens are African-American. Tenant Chevalier and Manager Wagner went upstairs to speak to the Gadsdens. Charlotte Gadsden explained to Manager Wagner that her husband Untoma had just returned from the hospital and that the noise had been the result of his dialysis machine falling to the floor. Manager Wagner nevertheless yelled, "That's it, you're done, you're out of here, I've had enough," or words to that effect.

Following that confrontation, Manager Wagner urged Tenant Chevalier to file a false police report stating that the Gadsden's 17-year old son had attacked Tenant Chevalier. Tenant Chevalier refused to do so. Manager Wagner nevertheless stated she would file such a report, and told Ms. Chevalier that she needed her help in evicting the Gadsdens, whom she referred to as "nigger" tenants. When the police arrived, Tenant Chevalier denied that she had been threatened by the Gadsdens’ son and therefore no charges were filed.

Manager Anderson told Tenant Chevalier that, with regard to the maintenance requests of African-Americans, "them fucking niggers can wait, I'll get to them when I get to them," or words to that effect. Manager Anderson made the comment in the presence of Tenant Chevalier's children.

On February 11, 2009, Manager Anderson called the Sioux Falls Police Department and falsely reported that the Gadsdens' 15-year old son was attempting to steal change from the apartment complex's laundry machine. Scott Terveen (an owner of TK Properties) insisted that charges be filed. The charges were later dismissed.

On numerous occasions, white tenant Jenny Johnson heard Manager Anderson and Manager Wagner use the word "nigger" to describe black tenants, including the Gadsdens. On February 19, 2009, Tenant Johnson told another white tenant that she believed that Manager Anderson and Manager Wagner were racist. Manager Anderson, who learned of Tenant Johnson's allegations, responded by sending Tenant Johnson a text message that said, "Who in the hell do u think u r if u want 2 bitch about me and b nosy u know where I live." Manager Anderson also told another tenant that he would "punch [Tenant Johnson] in the mouth to shut her up," or words to that effect. The tenant told Tenant Johnson about Manager Anderson's threat.

Following Manager Anderson's text message and threat of assault, Manager Wagner and Tenant Johnson saw each other on the balconies of their respective units. Manager Wagner yelled, "Do you know the difference between a black person and a nigger? . . . They're niggers. They're niggers upstairs in 306," or words to that effect, referring to the Gadsden's unit.

On February 20, 2009, Tenant Chevalier, Tenants Gadsdens and Tenant Johnson went to the Sioux Falls Housing and Redevelopment Commission ("Housing Authority") to complain about the discriminatory conduct of Manager Anderson and Manager Wagner. Manager Anderson and Manager Wagner saw them leave the property. Later that day, Tenants Gadsdens and Tenant Johnson returned to their apartments to find that they and other tenants on their floor did not have heat.

The following day (February 21, 2009), Manager Wagner sent Tenant Chevalier a text message asking, "is it true you were with Jen [Tenant Johnson] yesterday at housing [Sioux Falls Housing and Redevelopment Commission]. we have never done anything 2 u or your family -- y r u against us?”

On February 22, 2009, Tenant Johnson received a voice mail message from Manager Wagner in which she yelled vulgarities and stated that she would use "every ounce in my body" to "take you out of here." Tenant Johnson felt threatened by the message and called the police the following day.

Defendants TK Properties and Scott Terveen (an owner of TK Properties) knew about Manager Anderson’s and Manager Wagner's discriminatory conduct, but failed to take corrective action. In February 2009, Tenant Johnson met with Michael Terveen (another owner of TK Properties) to complain about Manager Anderson’s and Manager Wagner's discriminatory conduct. Michael Terveen relayed Tenant Johnson's complaints to Scott Terveen.

Despite these complaints, Defendants TK Properties and Scott Terveen failed to curtail Manager Wagner’s and Manager Anderson's authority over the management of the complex and allowed them to continue on as managers. Both managers continued to live at the property rent-free and continued to serve as managers of the property until at least May 2009.

On February 26, 2009, Charlotte Gadsden, Untoma Gadsden, Chevalier, and Johnson, on behalf of themselves and their minor children, filed three discrimination complaints with the U.S. Department of Housing and Urban Development ("HUD"). Following an investigation, HUD determined that that reasonable cause existed to believe that the defendants had engaged in illegal discriminatory housing practices in violation of the Fair Housing Act. Accordingly, HUD issued a Determination of Reasonable Cause and Charge of Discrimination against Defendants.

On September 15, 2009, Tenants Gadsden, Tenant Chevalier, and Tenant Johnson timely elected to have these charges resolved in a federal civil action. As a result, the DOJ filed this lawsuit, on October 16, 2009 ,which is pending in the United State District Court of South Dakota.

The lawsuit seeks a court order declaring that defendants' actions violate the Fair Housing Act, prohibiting future discrimination by the defendants, awarding monetary damages to all persons harmed by the defendants' discriminatory practices and assessing a civil penalty to vindicate the public interest. The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.

Source: U.S. Department of Justice press release and legal complaint (portions of press release used with permission)

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To learn more about fair housing issues (along with a variety of other real estate topics), please visit us at www.123ConEd.com. We are the leading online provider of Michigan real estate continuing education. All of our courses are fully approved and properly certified by the State of Michigan, and are offered online.

Copyright © 123 ConEd LLC 2009. All rights reserved.

Here is another summary of a recent legal case involving a fair housing issue. This case is a little different than the typical fair housing case because it involves the criminal interference with the right to fair housing instead of the usual civil violation. Although this case doesn’t provide much guidance about the "dos and don'ts" under the Fair Housing Act for real estate professionals, I thought it was nevertheless interesting and worth posting.

On Tuesday (October 13, 2009), a Louisiana man plead guilty to firing three shots from a shotgun at the home of three Hispanic men and, after they fled, entering the home and setting a fire that burned it to the ground.

Johnny D. Mathis plead guilty to three criminal counts, including (1) criminal interference with the right to fair housing; (2) use of fire to commit a felony; and (3) use of a firearm during a crime of violence. Each count carries a maximum penalty of ten years in prison, a $250,000 fine, or both. Furthermore, the ten year penalties for use of fire to commit a felony and use of a firearm during a crime of violence are mandatory, meaning that Mr. Mathis now faces a maximum sentence of 30 years and a mandatory minimum of 20 years in prison. Sentencing is scheduled for January 13, 2010.

Testimony presented at the plea hearing established that on June 15, 2008, Mr. Mathis fired three shots from a shotgun at the home of three Hispanic men who shared the residence in a rural area of western Louisiana. Mr. Mathis’ home was across the street from the victims’ house. After hearing two shots, the victims fled their house. Once outside, the victims watched as Mr. Mathis fired a third shot into the trees and then entered the house, left briefly, and then returned. Minutes later, the house was engulfed in flames as Mr. Mathis exited the house. Subsequent investigation determined that the fire started in the kitchen where the victims had seen Mr. Mathis. Mr. Mathis admitted that his crime was motivated by the victims’ race and national origin and was intended to interfere with their right to live in their home.

Although this matter did not involve a real estate professional or a real estate transaction, it is important for all real estate professionals to remember that the federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. Real estate agents who violate the Fair Housing Act face only civil (monetary) damages and not prison time. The case against Mr. Mathis was different for (hopefully) obvious reasons.

Source: U.S. Department of Justice press release (portions of press release used with permission)

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To learn more about fair housing issues (along with a variety of other real estate topics), please visit us at www.123ConEd.com. We are the leading online provider of Michigan real estate continuing education. All of our courses are fully approved and properly certified by the State of Michigan, and are offered online.

Copyright © 123 ConEd LLC 2009. All rights reserved.