8th Circuit Allows Fair Housing Claim Based on Refusal to Consider Social Security Income
The U.S. Court of Appeals for the Eighth Circuit recently held that a disabled plaintiff may sue a property management company under the Fair Housing Act where the Company allegedly refused to accept social security disability income from the applicants.
At issue in the case were plaintiffs (a mother and her disabled adult-daughter) whose rental application was rejected by defendant’s management company because the company’s income verification policy required pay stubs, an offer letter, or tax returns to verify income. Plaintiffs could not provide the required documentation because, as a result of the daughter’s disability, their only sources of income were social security, retirement benefits, and rental income. Plaintiffs offered to provide proof of these income sources. However, defendants refused to accept such proof and instead only offered plaintiffs the options of getting a qualified guarantor (i.e., co-signer) or paying the full lease term up front.
Under the FHA, it is unlawful to “discriminate in the sale or rental, or to otherwise make unavailable or deny, a dwelling to any…renter because of a handicap.” Moreover, the FHA makes it unlawful to “refus[e] to make reasonable accommodations in rules, policies, practices, or services, when such accommodations may be necessary to afford [a person with a disability] equal opportunity to use and enjoy a dwelling.”
The district court dismissed the lawsuit, ruling, in relevant part, that it was not necessary for the defendants to grant plaintiffs an exception to their income verification policy because the plaintiffs “refused to consider the option of obtaining a co-signer, which would have negated the need for an accommodation.”
The Eighth Circuit reversed the lower court in part, ruling that an accommodation to the company’s income verification policy was necessary and reasonable to afford the plaintiffs an equal opportunity compared to the non-disabled to rent the apartment. Moreover, the Eighth Circuit concluded that the district court erred in finding that the requested accommodation was unnecessary because the plaintiffs declined the proffered alternatives of obtaining a co-signer or prepaying the full lease term’s rent. According to the court, these alternatives were not substitutes for accommodating the plaintiffs, but rather additional burdens that would not have leveled the playing field compared to similarly situated but non-disabled individuals. As a result, the Eighth Circuit remanded the case back to the district court for rehearing on plaintiff’s reasonable accommodation claim under the FHA.
The opinion is available here.
