Local Law Blogs

Stark & Stark Enforces Age Restriction in Over 55 Community

By Mark M. Wiechnik

Stark & Stark recently obtained a favorable settlement for one of its over 55 communities faced with a homeowner whose granddaughter resides in one of the units. The Association, after becoming aware of the violation, sent notices of the violation to the homeowner and offered Alternative Dispute Resolution (ADR) as a means to resolve the dispute without the need for litigation. However, after the offer of ADR was rejected by the homeowner, the Association was forced to file suit in order to obtain compliance. After spending a significant amount of time and counsel fees serving discovery and having the unit owner's counter claim dismissed, the Association was able to resolve the case via a court ordered mediation. By arguing not only the relevant master declaration standards, but also the applicable federal regulations and case law, Stark & Stark was able to obtain a date certain on which the unit owner would come into compliance (either by selling or renting the unit to a qualified resident), and also obtained a reimbursement of legal fees from the offending unit owner in the amount of nearly 90% of the total fees spent by the Association in the enforcement action.

Generally, the Fair Housing Act ('FHA') provides that it is unlawful '[t]o refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of ... familial status ....' 42 U.S.C. § 3604(a). The FHA further precludes representing 'to any person because of ... familial status, ... that any dwelling is not available for ... rental when such dwelling is in fact so available.' 42 U.S.C. § 3604(d). However, the FHA provides an exception for discrimination on the basis of familial status for housing 'for older persons.' 42 U.S.C. § 3607(b)(1). This gives municipalities and groups of older citizens to create over 55 communities which provide tax revenue, without expenses such as schools.

The Act defines 'housing for older persons' in part as housing "intended and operated for occupancy by persons 55 years of age or older" and (i) at least 80 percent of the occupied units are occupied by at least one person who is 55 years of age or older; (ii) the housing facility or community publishes and adheres to policies and procedures that demonstrate the intent required under this subparagraph; and (iii) the housing facility or community complies with rules issued by the Secretary for verification of occupancy. As long as the Association demonstrates intent to provide housing for older persons, establishes regulations related to that intent and enacts a plan to enforce the rules, the Association will maintain its status and whatever benefits were conferred upon it as a result of this status. (See also 24 C.F.R. 100.304 through 100.308). 

Over 55 communities must be vigilant not only in surveying their unit owners, but also in enforcing the provisions of the master declaration or applicable restrictive covenants, otherwise, the Association runs the risk of losing its designation as an over 55 community, exposing it to litigation risk for discrimination as well as potentially losing any tax benefits were conferred upon the community.

Full post as published by New Jersey Law Blog on February 28, 2011 (boomark / email).