In a decision published earlier this month, the U.S. Court of Appeals for the Eighth Circuit concluded that a disabled plaintiff has the ability to file a complaint under the federal Fair Housing Act (FHA) against a property management company when management allegedly declined to accept a disability benefits check as an acceptable source of income from the applicants.

The case involved a mother with a disabled adult daughter. The pair submitted an application to rent a unit using disability payments as income. The management company’s income guidelines, however, required pay stubs, an offer letter, or tax returns to verify income. The applicants could not meet that test as their income consisted solely of a disability check, social security, retirement benefits, and some rental income. As the parties engaged in the interactive process, the leasing office suggested it would accept a co-signer who was income qualified. The renters attempted to provide proof of their sources of income. When the parties could not come to an agreement, the plaintiffs sued.

The district court dismissed the complaint, holding that a reasonable accommodation was unnecessary because the defendants offered a solution which the plaintiffs refused. The appellate panel, however, reversed that decision, finding that a reasonable accommodation was indeed necessary because the offered alternative was not a substitute for a “level playing field in housing for the disabled” and that the co-signer option put forward by the defendant instituted “an additional burden on the disabled applicant.”

So, should professional apartment management have income qualification guidelines for your units? Absolutely. Along with a credit and criminal background screening policy, it is a best practice. But, as this court opinion holds, disability payments should be included as an appropriate source of income when running an application.

Just A Thought.

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