The U.S. Department of Housing and Urban Development (HUD) has released final regulations September 13, 2016 related to the Fair Housing Act that impact community associations. The final rule is effective October 14, 2016, and CAI will provide additional information in the coming days.

Under the rule, community associations may be liable under the Fair Housing Act for the discriminatory actions of residents who harass or create a hostile environment for other residents. The Fair Housing Act prohibits harassment against a person because of race, color, religion, sex, national origin, disability, and familial status in housing and housing-related transactions. Courts and HUD have long held that Fair Housing Act protections extend beyond the initial transaction and protect a consumer’s ongoing use and enjoyment of their home and property.

In finalizing the new regulation, HUD responded to concerns raised by CAI’s Federal Legislative Action Committee in a December 2015 letter. CAI expressed concern the initial proposal would—

  • establish a duty that community associations prevent or halt illegal discriminatory acts of persons over whom the association has no direct control (third parties)
  • pressure community associations to exercise authorities not available under state law as a means to avoid liability or hold associations liable for an inability to promptly end discriminatory conduct
  • inappropriately inject association board members, staff, and community managers into the interpersonal relationships of residents to ascertain if disputes between residents rise to the level of illegal acts, make findings of fact, and make determinations regarding alleged or potential discriminatory acts

In response to these concerns, HUD modified the final rule to—

  • plainly state in guidance that not all resident disputes rise to the level of housing discrimination
  • clarify that community associations do not have a general duty to halt housing discrimination, but must take prompt action to halt housing discrimination when the association is required to by law or governing documents
  • clarify that community associations are not required to take actions outside the scope of authority under law or governing documents to halt housing discrimination
  • add a “reasonable person” standard to determine if or when a community association should have been aware of and acted to halt housing discrimination by third parties if required to do so by law or governing documents

Additional information:

Click here to view CAI’s letter to HUD commenting on the original proposal

Click here to view HUD’s final Fair Housing Act regulation

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C. Scott Canady

Scott Canady's 13 year record of public service includes experience gained in the U.S. House of Representatives and in the U.S. Department of Housing and Urban Development.

In Congress, Scott served as chief policy and political aide to a senior member of the House Financial Services Committee, working to reform the National Flood Insurance Program and improve the regulation of housing finance giants Fannie Mae and Freddie Mac.

Following his time in the Congress, Scott was appointed Deputy Assistant Secretary for Legislative Affairs at the U.S. Department of Housing and Urban Development. Scott served as a key legislative liaison with members of the House Financial Services Committee and the Senate Banking Committee.

In 2009, Scott began his partnership with Community Associations Institute by launching Tambala Strategy. Through this partnership, Scott has worked with CAI's members and leadership team to advance the views of common interest communities on a variety of issues including federal condominium standards, federal disaster assistance for community associations, and community association lien priority.

Scott is a graduate of Louisiana State University where he earned a Bachelor of Arts in Political Science and History.

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