Recently, managers of rental homes settled with the U.S. Department of Justice (DOJ) after the managers discriminated against a woman with several children by unlawfully denying housing to the family. As part of the settlement, the managers will pay $20,000 to the family and $7,000 to the U.S. government as a civil penalty.

A complaint was filed against the management company after a woman with four daughters was told that she had “too many children” and would not be permitted to rent the apartment. The occupancy policy at the time of the complaint allowed five individuals in the home, but capped the number of children to no more than three.

A settlement was reached by the parties in the form of a court consent decree. In addition to the $27,000 settlement payment, the managers are required to change their occupancy policy to allow at least two individuals per bedroom. The current and future employees of the management company are required under the agreement to participate in HUD-approved training. The DOJ also imposed certain posting, reporting, and record-keeping requirements, including a notification requirement should the managers make any changes to the occupancy policy. The settlement terms extend to each of the 23 properties in the management company's portfolio.

John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity, commented:

For over twenty years, the Fair Housing Act has made it unlawful to discriminate against families with children, and that includes occupancy standards that unfairly limit the number of children who can reside in a dwelling.

This latest development continues a trend of increasing enforcement by the DOJ to eradicate discriminatory rental policies.

As a general rule, HUD has found an occupancy policy that permits two persons per bedroom to be reasonable under the Fair Housing Act. HUD has made clear, however, that this general rule is not applicable in all cases. In making a reasonableness determination, HUD also will consider the size of bedrooms and the unit, and whether a child occupant is an infant such that the child will not be counted.

We recommend that management companies and others involved in the rental of multifamily housing review their occupancy policies to ensure they comply with all federal and state non-discrimination laws and regulations, including the Fair Housing Act. The settlement is also a timely reminder of the importance of initial and periodic training of employees in these areas and providing written materials consistent with the written policy.