Accessibility build it & they will come: by following fair housing requirements in construction and design, buying and selling, and maintenance, apartment owners can serve their residents and avoid costly lawsuits.

The general theory in property management is that if an owner builds an apartment community based on sound homework and market studies, or purchases from someone who has, the prospects will come.

Then, certain prospects will choose to become applicants, and some of those applicants will become residents, preferably the kind who treat their neighbors and the property well and pay the rent on time.

But when an apartment community or building is built or purchased, it is not only the prospects who will come. Fair housing groups, testers hired by the U.S. Department of Housing and Urban Development and advocates for the disabled community also will visit. Their mission is to see just what has been built (or bought) and to see whether the community is in compliance with the accessibility requirements of the Fair Housing Amendments Act of 1988 (FHAA).

Not complying with FHAA may result in the community or building becoming a defendant in a fair housing complaint of lawsuit.

More and more developers, owners and property management companies find themselves in this unexpected and unenviable role of defendant, often along with their architects and civil engineers. The potential cumulative cost of these complaints and lawsuits often reaches six figures; occasionally, the potential cost has been estimated to be in the millions.

The issue is this: Under FHAA, for all new construction ("new" is defined as being designed and constructed for "first occupancy"--for any purpose--on or after March 13, 1991), every ground floor apartment, or every apartment in a building with an elevator, must be built with certain required design features. Failure to include these required design features may result in a complaint of lawsuit, which in turn can result in significant costs to the owner. The basic design features are listed on page 25.

These basic design issues are important in three phases during the "life" of an apartment building of community: the design and construction phase; when the community is bought or sold; and the day-to-day management of an existing community that is "new" for purposes of the FHAA.

Assumptions About Architects

First and foremost, do not assume that an architect is knowledgeable about the FHAA accessibility requirements. Recent cases have included architects among the named defendants, and some of these architects have been required to pay monies and even to notify all other architects in their state of the design and construction requirements. An architect should demonstrate knowledge of FHAA. If the architect says he or she knows about the Americans with Disabilities Act (ADA), you may want to find someone else. Someone who is confusing ADA with fair housing law is not likely to do right with your design. The ADA probably does not apply to the apartment community, with the exception of the leasing office and the parking area serving it. In fact, depending on a number of factors, including how the building is funded, there may be other federal accessibility, requirements beyond those in the FHAA. Some of those other laws are outlined on page 24.

Assuming that the architect demonstrates considerable knowledge of fair housing law and its design and construction guidelines, next ask to see the architect's Errors and Omissions insurance policy. An architect should have coverage limits that are sufficient--and that means substantial, not a mere $250,000 as one architect involved in a recent fair housing legal matter had. Recent lawsuits have resulted in potential monetary exposure of as much as $1.5 million. Depending on the size of the community, it might not be unreasonable to require at least $1 million in coverage.

Next, try to secure an Indemnification Agreement by which the architect agrees to hold the apartment owner/manager harmless and indemnify the owner/manager as to any and all claims that may arise due to the actions of the architect (that is fancy legal language that ultimately says that the architect will "stand in your shoes" if legal trouble arises from the architect and the design plans). That agreement also should state that the owner/manager will be named as an Additional Insured on the Errors and Omissions insurance policy, and that the owner/manager will get a Certificate of Insurance showing this. Get with an attorney to have this agreement drafted to ensure adequate protection.

Even with various legal protections in place, have the plans and specs reviewed. Fair housing issues are very specialized, and investing in a review of the plans by someone dedicated to this area of law is wise. In fact, it may prove (now and in the future should the owner wish to sell the community) to be one of the best proactive decisions for legal and business reasons.

It is important that the architect and engineer work together, as any changes that the engineer might make, although structurally sound and quite logical, (such as a re-grading due to topography) may actually run afoul of the fair housing laws. An orchestrated procedure should exist to bring proposed changes to the architect's attention before execution (no matter how minor they may be), with the owner/manager being advised of the need for any such change and receiving confirmation that the change, once again, incorporates fair housing compliance.

Pay close attention in the field during construction. The construction superintendent may know that thermostats are supposed to be mounted no higher than 48 inches from the floor, but unless those thermostats are subject to frequent checks, the line construction workers may not pay attention to this kind of detail. This is particularly true because many of the FHAA requirements involve variations from the way many construction workers have always done their work in the past. Consider having the architect of record's inspection mad supervision duties include inspection for the FHAA requirements during construction.

Don't rely on the government. Just because the government sends a Certificate of Occupancy of some other official document, don't assume for a moment that the community has been evaluated and approved from a fair housing perspective. The Certificate of Occupancy is based on compliance with a variety, of building codes, fire codes and the like, but in fact, it is almost guaranteed that no fair housing issues have been addressed. Having that Certificate of Occupancy will not be a defense should an owner/manager face a complaint or lawsuit. Quite simply, in such a situation, a Certificate of Occupancy has no value at all.

Buying or Selling a Community

When buying or selling a community, an owner must consider the fair housing FHAA accessibility requirements if that community was built for first occupancy on or after March 13, 1991. If buying, it is important to know what is being purchased: if selling, be prepared to address the buyer's concerns about the FHAA.

A review for fair housing construction compliance should be part of a buyer's due diligence. The apartment community should be inspected (literally inside and out) by someone informed and knowledgeable about fair housing accessibility. No matter the outcome of the inspection, ask for an Indemnification Agreement by which the seller agrees to hold the buyer harmless and indemnify the buyer as to any and all claims that may arise based generally on the construction of the community but with specific reference to fair housing construction and design issues. (This time the fancy legal language should ultimately say that the seller will "stand in your shoes" if the buyer gets into legal trouble because of design and construction issues; get with a lawyer on this.) If the inspection report shows satisfactory compliance and there is a well-crafted Indemnification Agreement, then a buyer will likely consummate the purchase. But keep in mind that even with an Indemnification Agreement a troublesome report can mean some serious trouble later. Know the risks to make an informed business decision.

As a legal matter, there is still no final resolution as to whether a community built outside of compliance is a continuing violation of the FHAA (thus with no statute of limitations) or whether such a community is only in violation of the law for the first two years of its existence, running from the date of Certificate of Occupancy. As a practical matter, a buyer may wish to renegotiate the purchase price to reflect the risk the buyer might be taking.

What does this mean for the seller of a community? The seller needs to know how to respond to a possible request from a potential buyer that the seller provide an Indemnification Agreement and the continuing risk if one is provided. Be prepared for the selling price of the community to be adjusted downward to compensate the buyer for the potential risk, and even be prepared for the sale of a community to fall through because of a reluctant buyer who is concerned about fair housing issues.

How to Fix a Problem

Once the owner of a community that was built for first occupancy on or after March 13, 1991, knows there are problems with the design and construction requirements of the FHAA, what should be done?

If the design issues are relatively minor, consider fixing the problems. A realistic cost-benefit analysis may indicate that the costs to remedy are worth the investment. If served with a complaint or lawsuit, the associated costs may far outweigh what would have been spent on remedying the situation.

Pay particular attention to the common areas and routes to and from the apartment homes. Advocacy groups have been known to visit communities, note that there is a need for curb cuts or an accessible route to an outside door and then file suit without ever having set foot in the leasing office, asking questions or making requests of the leasing staff.

Next, have a plan for requests from prospects, applicants or residents. The leasing staff should know what to do when some one says, "There will need to be a ramp to that doorway," or "Can you put a levered door handle on that door?" or "What about this curb?" If the staff is sophisticated, they can be instructed on how to respond to such queries. With a less sophisticated staff, of a lot of turnover of leasing professionals, perhaps the best policy is to direct them to someone in the operation who is knowledgeable and empowered to advise as to how such a situation should be handled. Should the inquiry be deferred, assure prospects that their questions will be directed to management and that an answer will be forthcoming. And make it soon, 48 hours at the most for a response, with 24 hours being preferable, when possible.

This area of fair housing law is active right now. Fair housing groups and plaintiff's attorneys are given the opportunity to go to classes to learn how to investigate and file fair housing complaints based on accessibility issues. In fact, most cases that are filed based on design and construction issues ale brought not by individuals who may have visited or considered certain apartment communities, but rather by organizations that are acting on behalf of the disabled community as a whole. And these cases hinge not on the traditional "he said-she said" dialogues between prospects or residents with leasing or management personnel. Rather, they are won or lost based on undisputed physical evidence (the width of a doorway, the slope of a grade) and its interpretation under the FHAA.

Build it so when they come, whoever they are, they do not have a basis to bring the owner/manager into the courtroom.

Other Accessibility Laws May Apply

All multifamily housing built for first occupancy after March 13, 1991, is covered by the Fair Housing Amendments Act's (FHAA) accessibility requirements, regardless of whether it is for rent or for sale, or financed publicly, privately or by a combination of the two. However. besides the FHAA, other federal laws mar be applicable to an apartment community, even if it was built for first occupancy before March 13, 1991.

Section 504 of the Rehabilitation Act

Communities that receive direct federal financial assistance--such as project-based rather than acceptance of resident vouchers) Section 8, Rural Development Service funds or HOME funds--must comply with the funding agency's published regulations regarding Section 504, which prohibits discrimination on the basis of disability in federal programs. For instance, HUD's Section 504 regulations require that HUD-funded properties have a minimum of 5 percent of apartments accessible for people with mobility impairments, 2 percent accessible for people with vision and hearing impairments and accessible common areas and amenities. These requirements apply regardless of the age of the community. If the minimum percentages are not met, the community must create a "transition plan," providing a timetable for when the percentages can be expected to be met. In addition, renovation, but not routine maintenance, will trigger these regulatory requirements.

Americans With Disabilities Act

The ADA requires that "public accommodations" be accessible. With regard to apartment communities, "public accommodations" are areas that are available to people other than residents and their guests. Typically, that's the leasing office and the parking serving the leasing office. Under the ADA, therefore, the leasing office must have been built according to the accessibility provisions of the ADA if it was built or renovated after January 1995; if it was built before that date and hasn't been renovated, all architectural barriers to accessibility still must be removed to the extent such removal is "readily achievable." What constitutes "readily achievable" may vary from community to community, but can be as simple as relocating a potted plant that blocks the path of travel or as complicated as installing curb ramp and widening a door.

Note that the ADA applies to these areas of public accommodation regardless of the age or funding of the community.

Other Accessibility Requirements

In addition to the accessibility provisions of the FHAA, the ADA or Section 504, a community also may be subject to local of state building code accessibility requirements. Often, these codes require a certain percentage of apartments be built fully accessible. which is a higher level of accessibility than that provided by the FHAA. If a local or state accessibility code is applicable to a community, then all the ground-floor apartments must be accessible according to the FHAA, and a certain percentage fully accessible, according to code requirements.

Communities funded with Section 42 tax credits alone are not subject to Section 504, but the state agency overseeing the tax credit program may impose the Section 504 requirements (or other accessibility provisions) as part of a Qualified Allocation Plan, These requirements could apply to rehabbed or renovated properties, as well as new construction, and would usually require a written waiver if they are technically not feasible for the community.

7 Features of Accessibility Required By the Fair Housing Act of 1988

The Fair Housing Amendments Act of 1988 (FHAA) added disability as a protected class to the 1968 Fair Housing Act, among other changes. As part of its definition of discrimination based on disability, the FHAA included the "failure to design and construct" new multifamily housing with seven features of accessibility. Following is a summary of the parameters and requirements of the FHAA with regard to accessibility:

The accessibility requirements apply only to multifamily buildings intended for "first occupancy" (for any purpose) after March 13, 1991. This means the requirements are not applicable to renovations of rehabilitations of buildings built before 1991, even if the work is extensive, or even if the building was not used as a residence until 1991. Only buildings with a total of at least four apartment homes are covered (even if all those apartments aren't ground-floor apartments). Within a covered building, only single-story (ground-floor) apartments are covered, except for multi-story apartments in a building with an elevator. In a building with an elevator, all the apartments must meet the requirements. If the building has no elevator, only the ground-floor apartments are covered. Be aware that a single building may have more than one "ground floor," if, for instance, it's built on a slope with apartments in the front and back.

Each of these seven requirements has complicated specifications that are not typically part of the building code for a state or locality. Further guidance on what is required by the FHAA can be found in HUD's "Fair Housing Act Accessibility Guidelines," as well as HUD's "Fair Housing Act Design Manual." Both publications are available at the fair housing section of HUD's Web page, www.hud.gov.

1. An accessible building entrance on an accessible route. Covered buildings must have at least one entrance on an accessible route, essentially meaning a route that can be negotiated by a person using a wheelchair.

2. Accessible and usable public and common use areas. The facilities and amenities of the community, including swimming pools, laundry facilities, exercise rooms and tennis courts, must be on an accessible route.

3. Usable doors. All doors on the ground floor must be wide enough to allow passage by a person using a wheelchair. (Typically, this means regular use of a 2-foot-10-inch door.)

4. An accessible route into and through the apartment home. A person using a wheelchair must be able to get over the entry door threshold to an apartment, and must be able to more throughout the apartment itself.

5. Light switches, electrical outlets, thermostats and other environmental controls in accessible locations. Outlets that are dedicated to a particular appliance, such as a refrigerator, and other controls that a resident would not be expected to use on a daily basis (such as circuit breakers) are exempt from this requirement.

6. Reinforced walls for the later installation of grab bars. The FHAA does not require the installation of grab bars in new construction. However, all bathrooms in covered apartments must have reinforced walls to facilitate the installation of grab bars (usually at the resident's expense) when needed.

7. Usable kitchens and bathrooms. A usable kitchen or bathroom is one in which a person using a wheelchair can maneuver. For the bathroom, "maneuver" includes entering, closing the door, and using the fixtures. Full turning radius--such as mandated by the ADA--is not necessarily required.

Fair Housing Training--Where to Get Help

Courses

NAA Certified Apartment Manager (CAM) curriculum; NAA National Apartment Leasing Professional (NALP) curriculum; and NAA Certified Apartment Maintenance Technician (CAMT) curriculum, all contain several hours of fair housing training for the onsite incumbent. The CAM curriculum is designed to be delivered as a standalone day course, as well.

Books

The NAA Fair Housing Resource Guide--available through the NAA Bookstore--offers a detailed look at all aspects of onsite fair housing practice. Easy to read and understand, it includes a chapter for executives and great operating tips. It is designed to be an employee booklet used for training, with a signed acknowledgment for the personnel file.

Videos

NAA Tester's Welcome--available through the Bookstore--is a 45-minute video using actual undercover shopping videos to depict serious fair housing violations in a variety of onsite situations. It was developed by the Fair Housing Institute and moderated by attorneys Theresa Kitay and Kathelene Coughlin.

Speakers

Many paid speakers provide Fair Housing Training: Howard Bookstaff, Esq.; Doug Chasick; Kathelene Coughlin, Esq.; Nadine Green, Esq.; Robin Hein, Esq.; and Theresa Kitay, Esq.

Online

A three-hour course is available through Grace Hill as a part of its online library. It is provided in English and Spanish and contains a testing instrument and a certificate of completion. See gracehill.com.

Theresa L. Kitay, Esq. is a partner in The Law Firm of Coughlin & Kitay P.C., and the President of the Fair Housing Institute. She has expertise in accessibility issues, including the Fair Housing Act's design and construction requirements for new multifamily housing. She can be contacted at 770/840-8483 or [e-mail].

Nadeen Green, Senior Counsel with For Rent Magazine, regularly teaches fair housing law to the apartment industry.

The information contained in this article is not to be considered legal advice, and the authors and their organizations strongly recommend that you consult with your own counsel.