Housing discrimination suits against landlords are on the rise.
Property owners and managers are struggling to keep up with modifications to Department of Housing and Urban Development (HUD) regulations—and finding themselves unprotected when it comes to discrimination suits.
These suits run the gamut. Some claim age discrimination, others cite so-called nuisance ordinances and some involve people with criminal records who claim they were unfairly denied housing.
Denying housing over criminal records could be discrimination, according to the 10-page policy paper HUD released in April 2016 regarding the use of criminal background criteria to screen applicants for tenancy. According to a HUD news release, a landlord violates fair housing laws when a policy or practice has an unjustified discriminatory effort, even when there is no intent to discriminate. Blanket policies that refuse to rent to anybody with a criminal record constitute “defacto discrimination” because of the systematic disparities of the American criminal justice system.
How can the HUD’s interpretation of compliance with fair housing laws impose a burden on landlords? Consider the October 2016 lawsuit a social services group filed in federal court, contending that a New York City landlord had a policy of not renting to people with criminal records. The lawsuit targeted the owners and managers of a rental complex in Queens over concerns about legal restrictions that hinder former prisoners’ efforts to find homes. The suit argued that the landlord should replace the rental policy with one that allows for individualized review of factors other than a criminal history when determining a person’s security risk as a tenant.
Property owners and managers can protect themselves by learning about the laws and how regulations are enforced—and by securing adequate insurance coverage for when problems do arise. In addition to continually educating themselves and informing these clients about the applicable risks, agents and brokers can help address each of these needs by properly insuring property owners and managers.
Part of the solution for property owners and managers is understanding the added security available through third-party employment practices liability insurance. This type of policy covers insureds for liability claims brought against them by customers, vendors or clients. The coverage works as an add-on to commercial general liability policies and provides a safeguard to any business or operation that has direct contact with the public—and is therefore at risk for claims of actual or alleged harassment or discrimination from a third party.
Insurance agents need to work with property owners and managers to identify risks, gaps in coverage and steps for building greater protection into their EPLI policies.
Jonah Mull is underwriting leader at Millers Mutual Group.
