In response to questions from my clients across the country, I am posting this article as evidence that in most cases HOA’s cannot prevent group homes from entering communities.
HOMEOWNERS ASSOCIATIONS AND GROUP HOMES
The governing documents of many homeowner and condominium associations contain provisions prohibiting commercial activities and restricting the use of the property to single family residential use. The recent increase in the number of so-called group homes for senior citizens, disabled or others who may need some type of assisted living frequently is in direct conflict with the association documents. While each situation is unique and must be evaluated individually, in virtually all cases the association will NOT be able to enforce these restrictions against a group home because of the provisions of the Federal Fair Housing Act, 42 U.S.C. § 3601, et seq. (the ‘Fair Housing Act’) and the Arizona Fair Housing Act, A.R.S. § 41-1491,et seq. (the ‘Arizona Act’) (collectively as the ‘Fair Housing Acts’).
The Fair Housing Acts prohibit discrimination against handicapped persons. The term ‘handicap’ is very broadly defined in the Fair Housing Acts as meaning, with respect to a person, (1) a physical or mental impairment which substantially limits one or more major life activities, or (2) a record of having such an impairment or (3) being regarded as having such an impairment. The rules and regulations issued by the Department of Housing and Urban Development implementing the Federal Fair Housing Act define “major life activities” as functions such as caring for one’s self, performing manual tasks, walking, seeing, hearing, breathing, learning and working.
Under the Fair Housing Acts, it is unlawful for any person to discriminate in the sale of a dwelling or to otherwise make unavailable or deny such a dwelling to any buyer because of the handicap of o person residing in or intending to reside in that dwelling after it is sold. The Fair Housing Acts also make it unlawful to coerce, intimidate, threaten or interfere with any person in the exercise or enjoyment of, any right granted or protected by the Fair Housing Acts· or to refuse to make reasonable accommodations in rules, policies, practices or services when such accommodations may be necessary to afford a handicapped person equal opportunity to use and enjoy a dwelling.
The prohibitions against discrimination on the basis of handicap in the Fair Housing Acts apply to homeowners associations and individuals. Thus, an association’s CC&Rs cannot be enforced to the extent that enforcement would constitute unlawful discrimination against handicapped persons. This is illustrated by the case of Rhodes vs. Palmetto Pathway Homes, Inc., 400 S.E.2d 484 (S.C. 1990) in which a property owner filed suit to enjoin a nonprofit organization from establishing a group residence in a residential subdivision. The restrictive covenants for the subdivision stated that the property could only be used for private residence purposes. The trial court determined that a group residence would violate the restrictive covenants and granted a permanent injunction against the nonprofit organization which wanted to establish the group home. In reversing the decision of the trial court, the Supreme Court of South Carolina held that the interpretation of the restrictive covenants in such a way as to prohibit location of a group residence for mentally impaired adults in a community is contrary to public policy as enunciated in the Fair Housing Act and in the laws of the State of South Carolina. The Supreme Court of South Carolina noted that the Fair Housing Act articulates a public policy of the United States as being to encourage and support handicapped persons rights to live in a group home in the community of their choice. The Court concluded that since the need for treatment and maintenance of the mentally handicapped is a legitimate and strong public interest recognized by state and federal legislation, a refusal to enforce restrictive covenants against otherwise unobtrusive group homes substantially advances that interest by promoting integration of the mentally handicapped into all neighborhoods of the community.
Other courts have held that the Fair Housing Acts prohibit the enforcement of private deed restrictions against a group home for the handicapped. In Broadmoor San Clemente Homeowners Ass’n. vs. Nelson, 30 Cal. Rptr. 2d 316 (Cal.App. 1982), the California Court of Appeals held that the Fair Housing Act and the California Fair Housing Act invalidate restrictive covenants that prohibit residential care facilities for non-ambulatory elderly persons. Similarly, in Deep East Texas Regional Mental Health and Mental Retardation Services vs. Kinnear, 877 S.W.2d 550 (Tex. App. 1994), the Texas Court of Appeals ruled that enforcement of a restrictive covenant against a group home for disabled adults would violate the Fair Housing Act. The Supreme Court of New Mexico in the case of Hill vs. Community of Damien of Molokai, 911 P.2d 861 (N.M. 1996) ruled that even if four unrelated residents of a group home for persons with acquired immune deficiency syndrome do not constitute a ‘family’ so that it violated the covenant restricting use of the property to single family residences, the covenant would violate the Fair Housing Act and a refusal of the homeowners association to permit the group home even though it violated the covenants would constitute a violation of the section of the Fair Housing Act that requires a homeowners association to make reasonable accommodations in its rules to afford handicapped persons equal opportunity to use and enjoy dwellings.
The public policy supporting the establishment of group homes is pervasive in virtually all of the cases, and is illustrated by a decision rendered even prior to the adoption of the Fair Housing Acts. In Westwood Homeowners Association vs. Tenhoff, 155 Ariz. 229, 745 P.2d 976 (Ariz. App. 1987), the Arizona Court of Appeals refused to enforce a restrictive covenant, in such a manner as to prohibit a group home for developmentally disabled persons. The Westwood Homeowners Association filed an action seeking injunctive relief to compel the closing of a Mesa home in which six developmentally disabled persons lived. The Association contended that the use of the home violated the restrictive covenants recorded against the subdivision which prohibited a business of any kind or any hospital, sanitarium, or other place for the care or treatment of the sick or disabled, physically or mentally. The Arizona Court of Appeals first considered the question of whether the operation of the residential facility for the developmentally disabled violated the restrictive covenant. The court noted that the facility was admittedly a place for the care of individuals who are physically or mentally disabled. The court also found that the state licensed and funded residential care facility violated the prohibition that no business of any kind or character whatsoever could be conducted from a residence on the lots. Accordingly, the court held that the facility violated the restrictive covenants.
The court then turned to the question of whether the enforcement of the restrictive covenant to prevent the use of the property for a residential facility for the developmentally disabled would be contrary to public policy. The court noted that on one hand, Arizona recognized a public policy of enforcing private restrictive covenants of landowners. On the other hand, Arizona had adopted a public policy of assisting the developmentally disabled by promoting their deinstitutionalization. The court noted that the public policy was codified in part in the Development Disabilities Act of 1978. After discussing that Act and the public policy evidenced by that Act, the Arizona court of Appeals held that the public policy extended to not only zoning ordinances but to private restrictive covenants which impeded the reasonable establishment of residential facilities for developmentally disabled persons in residential neighborhoods.
Any action taken by an association to attempt to enforce the CC&Rs against group homes for the handicapped could constitute a violation of the Fair Housing Acts and subject the Association to significant liability. This is illustrated by the case of United States vs. Scott, 788 F. Supp. 1555 (D. Kan. 1992), in which the United States brought suit against homeowners for violations of the Fair Housing Act, alleging that the defendants violated the Fair Housing Act by writing a letter threatening the filing of a lawsuit and then by filing suit in the District Court of Russell County, Kansas, to enforce a restrictive covenant limiting the use of lots to single family dwellings. Developmental Services of Northwest Kansas, an organization that operates group homes for disabled individuals, signed a purchase contract to purchase a residence. The defendants filed an action to enjoin the sale alleging that the sale would violate the restrictive covenants applicable to the subdivision that limited the use of the lots to single family dwellings. The state court held that the use of the residence for a group home for disabled individuals did not violate the restrictive covenant.
Following the dismissal of the state court action, the sellers of the property filed a housing discrimination complaint with the United States Department of Housing and Urban Development claiming that the action of the defendants in filing suit to block the sale was a violation of the Fair Housing Act. When attempts at reaching a conciliation agreement with the defendants were unsuccessful, the United States filed suit in United States District Court for violation of the Fair Housing Act.
The Court framed the issue as whether the defendants’ actions in interfering with the proposed sale because of the handicaps of the prospective occupants constituted a violation of the Fair Housing Act. The Court noted that several federal courts have held that the Fair Housing Act prohibits the enforcement of restrictive covenants that discriminate, or have the effect of discriminating, on the basis of handicap. The Court also referred to the report of the House Committee on the Judiciary with respect to the Act which stated that the Act “is intended to prohibit special restrictive covenants or other terms or conditions, or denials of service because of an individual’s handicap and which…excludes for example, congregate living arrangements for persons with handicaps.” The Court also noted that the House Report further explained that the Act protects against efforts to “restrict the ability of individuals with handicaps to live in communities.”
The Court, therefore, held that the defendants’ actions in attempting to enforce a restrictive covenant to prevent handicapped persons from residing in their neighborhood constituted discrimination prohibited by the Act. Specifically, the Court found that by attempting to enforce a restrictive covenant to prevent handicapped individuals from residing in their neighborhood, the defendants “otherwise made unavailable or denied” a dwelling because of the handicap of persons intending to reside in that dwelling after it is sold. The Court stated that the phrase in the Act “otherwise make unavailable or deny” would reasonably encompass any act of enforcing a mutual restrictive covenant through the judicial system for the purpose of denying equal housing opportunities to disabled individuals. In addition, the Court held that the defendants’ act of sending a letter threatening a lawsuit to enforce the covenant also constituted a violation of the provisions of the Fair Housing Act which prohibit making, printing or publishing any statement indicating a proscribed preference, limitation or discrimination based upon handicap.
In United States vs. Wagner, 940 F.Supp. 972 (N.D.Tex., 1996), the United States filed a Fair Housing Act lawsuit against homeowners in a subdivision in Ft. Worth, Texas, alleging that by filing a state lawsuit to prevent a lot owner from selling their home for use as a group home for six mentally retarded children, the homeowners violated the Fair Housing Act. The District Court stated that when Congress amended the Fair Housing Act in 1988 to prohibit discrimination against persons with handicaps, it made clear that the Fair Housing Act was intended to prohibit special restrictive covenants which have the effect of excluding congregate living arrangements for persons with handicaps and that Congress specifically stated that the Fair Housing Act prohibits the application of special requirements through restrictive covenants that have the effect of limiting the ability of handicapped persons to live in the residence of their choice in the community. The District Court also noted that since the 1988 amendments to the Fair Housing Act took effect, courts have made clear that single family deed restrictions cannot be used to exclude group homes for disabled persons from single family neighborhoods. Accordingly, the District Court concluded that the defendants had violated the Fair Housing Act when they filed the state lawsuit to prevent the sale of the home for use as a group home for six mentally retarded children.
For the purpose of this article, we have assumed that the residents of a group home will fall within the definition of handicapped contained in the Fair Housing Acts. If the residents do not fall within that definition, it is possible that the provisions of the association’s governing documents may be enforced to prohibit commercial and nonresidential uses. However, the law is now abundantly clear that group homes for the handicapped cannot be prohibited in associations, notwithstanding the fact that the governing documents might otherwise appear to prevent them.
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