New Fair Housing Guidance Clarifies Requirements for Approving Modification Requests

Published on: April 20, 2008

The Department of Housing and Urban Development (HUD) and the Department of Justice have issued new joint guidance explaining the obligations of rental property owners and homeowner associations to allow the “reasonable modification” of individual residences and common areas when those modifications are requested by disabled residents. These obligations stem from the Fair Housing Act, which forbids discrimination in the sale or rental of housing and specifies that disabled individuals are entitled to the reasonable changes in building structure or administrative policies necessary to assure their “full enjoyment” of their residences. The guidance doesn’t establish any new requirements, but it does provide the clearest explanation to date of how HUD is interpreting the Fair Housing rules.

Organized as a series of questions and answers, the guidance targets the issues that have proven most confusing and most problematic for the landlords and homeowner association boards responsible for handling modification requests:

  • Who pays for the modifications and (where appropriate) for removing them?
  • What documentation can landlords/associations require of residents seeking modifications?
  • What conditions, if any, can landlords/associations attach to their approval of modification requests?

The Massachusetts Law

Much of the guidance, and many of its most interesting points concern financing issues, which, for the most part, do not apply in Massachusetts, where a separate state law forbids discrimination in housing. Like the federal law, the Massachusetts anti-discrimination statute requires landlords/associations to approve reasonable modification requests; but unlike the federal law, which generally requires tenants or owners to pay for modifications in individual units and common areas, the state law requires landlords to finance modifications in rental units and common areas, and requires homeowners associations to finance modifications in the common areas of common interest ownership communities, unless the requested changes impose an undue financial or administrative burden. The state law applies to properties with 10 units or more; one-to-three-family dwellings are exempt from most fair housing requirements, while properties with 4-10 units fall into something of a gray area —landlords/associations must allow modifications, but, as under federal law, tenants/owners generally are required to pay for them.

The new guidance doesn’t alter the existing requirements for landlords and associations outside of Massachusetts, but it does restate, with clarifying examples, their obligation to allow requested modifications and the obligation of residents, in most cases, to pay for them, with a couple of notable exceptions to that general rule:

  • If the building is subject to the statutory handicapped accessibility standards in place since 1991 and the requested modification involves an alteration required by that statute, the housing provider (the landlord or the community association) must finance the change.
  • If the property received any federal funding, the landlord/association must finance the modification, unless it imposes an undue financial or administrative burden or requires “a fundamental alteration” of the federal housing program involved.

Although the Massachusetts law puts the burden of financing modifications on landlords/associations, it also offers a measure of flexibility that doesn’t exist in the federal law by allowing them to propose reasonable alternatives to the modifications tenants/owners request.

Example: If a tenant requests a roll-in shower (with a price tag of about $12,000), a Massachusetts landlord could insist that the tenant instead move to a unit that already contains the requested shower. The federal law specifically prohibits landlords from offering relocation to another unit as an alternative to a requested modification, except in federally-financed developments, where landlords may provide “alternative accommodations.”

What about Removal?

This is another interesting question that, again, doesn’t apply in Massachusetts. The federal law does not require tenants/owners to remove modifications installed in common areas, but it does require tenants at their expense to remove modifications they have installed inside individual units “where it is reasonable to do so.” An example in the guidance explains that a landlord could reasonably insist that tenants who have lowered a kitchen sink restore it to the original height at the end of their tenancy, but it would not be reasonable to require tenants who have widened doorways to narrow them. Similarly, the guidance explains, landlords could require tenants to remove grab bars they have installed, but not the re-enforcements embedded within the wall to hold the bars in place. In both cases (the wider doorways and the embedded reinforcements), the guidance emphasizes, the restoration work would be costly and the presence of the modifications will not adversely affect the future tenancies of non-disabled tenants.

Modifications and Accommodations

The Fair Housing Act requires landlords and associations to offer both reasonable modifications and reasonable accommodations to disabled residents, and the new guidance clearly defines the difference between them. A modification, the guidance explains, involves structural changes in residences or common areas, while an accommodation involves “a change, exception or adjustment to a rule, policy, practice, or service.” Installing a ramp would be a modification; allowing a blind resident to have a seeing-eye dog in a community in which pets are prohibited would be a reasonable accommodation a landlord or homeowners association would have to grant.

The guidance draws some interesting and not entirely expected lines between accommodations and modifications that are most relevant in jurisdictions outside of Massachusetts, where tenants/owners must usually pay for modifications, but landlords/associations are responsible for accommodations. The treatment of parking is particularly interesting. The guidance notes that the courts have treated parking requests not as modifications but as accommodations and have placed that responsibility on housing providers, “even if the provision of an accessible or assigned parking space results in some cost to the provider.”

Although the line between modifications and accommodations is usually clear, the guidance notes that some requests might qualify as modifications in some circumstances but accommodations in others. Example: A tenant requests the removal of carpeting to accommodate a wheelchair. If the landlord’s policy does not call for removing the carpeting but there is a smooth floor underneath, the guidance explains, removal of the carpeting would be an accommodation for which the landlord would have to pay (unless it imposed an undue administrative or financial burden). If the landlord typically replaces the carpeting before the beginning of a new tenancy, removing it for the disabled tenant and delaying replacement until that tenant leaves would also be an accommodation. However, if the apartment does not have a finished floor, the guidance notes, removing the carpeting and installing new flooring would be a modification – the tenant’s financial responsibility outside of Massachusetts but the landlord’s obligation in the Bay State.

Escrow Accounts

In jurisdictions outside of Massachusetts, landlords who can require tenants to restore modifications in some cases can also require them to establish escrow accounts when necessary, the guidance explains, “to ensure with reasonable certainty that the funds will be available” for the restoration. However, landlords can’t assume that all disabled tenants are potential credit risks (a discriminatory assumption), so they can’t require escrow accounts across-the-board for all reversible modifications; they must base the escrow requirement on objective criteria, including:

  • The nature and cost of the modifications – the more expensive the restoration work, the more justification for the escrow requirement;
  • The anticipated duration of the lease – the shorter the term, potentially, the more cause for concern about the restoration;
  • The tenant’s credit and tenancy history; and
  • “Other information that may bear on the risk” that the tenant won’t take care of the restoration work.

Based on these standards, a landlord might reasonably require an escrow account from a new tenant with a poor credit history, but would be harder-pressed to justify the requirement for a new tenant with a high credit score or a long-time tenant with a solid rental payment record.

In Massachusetts, as noted earlier, owners of rental buildings with between 4 and 10 units may require tenants to finance modifications inside individual units. These owners could also require escrow accounts, as allowed by the federal law. However, the state security deposit law strictly limits the amount of money landlords can collect in establishing a tenancy and an escrow requirement could easily trigger a violation of this complex and extremely restrictive statute. Considering the stiff penalties involved, landlords will probably find that in most cases, the risks created by the escrow requirement will outweigh its potential benefits.

Conditions and Alternatives

The HUD guidance emphasizes that landlords/associations can’t impose many restrictions on the modifications they approve and makes it clear that regulators will view unwarranted restrictions as back-door efforts to deny allowable modifications in violation of the law – a caution that applies equally in Massachusetts and other jurisdictions. Specifically, landlords/associations can’t impose additional fees for allowable modifications or accommodations – charging an extra fee for a service animal or for an accessible parking space, assessing a construction fee for modification work, or requiring owners/tenants to obtain additional liability insurance to cover risks posed by the construction or by exterior modifications, all would be prohibited.

Outside of Massachusetts design and construction requirements generally fall under the heading of restrictions that would be prohibited by the federal law. Landlords/associations may require residents to submit a description of their planned modification. They can also can require that any construction be done in a “workmanlike manner” and they can require that owners/tenants or their contractors obtain all necessary building permits. But landlords/associations cannot dictate the choice of the contractor.

In a rental building, landlords may not dictate the design or construction standards of interior unit modifications that will be removed at the end of the tenancy. For exterior modifications (where removal can’t be required), the landlord/association may dictate the design and construction materials used as long as those requirements meet the needs of the tenants/owners and impose no additional costs on them. If the landlord/association’s design is more costly, the tenant/owner must accept it only if the landlord/association pays the difference in cost.

What You Can Ask

The guidance provides helpful information, applicable in Massachusetts and other jurisdictions, about the documentation landlords and associations can require from individuals seeking modifications. Although fair housing laws specifically forbid questions about “the nature and severity” of a disability, the rules do allow associations and landlords to require information verifying the existence of a protected disability and explaining the relationship between the disability and the modification requested, but they can require this information only when the disability, the relevance of the requested accommodation, or both are unclear. And they can seek “only the information needed” to substantiate the request. If the disability is obvious and its “nexus” or relevance to the requested modification is clear, landlords/associations may not require additional information. The guidance offers as an example a resident confined to a wheelchair who requests the installation of ramps leading to her apartment and to the clubhouse. An association board confronted with that request could not demand any additional information before approving it.

The guidance identifies several sources who can provide documentation if appropriate. In addition to the obvious (“a doctor or other medical professional”), verification can come from “a peer support group, a non-medical service agency, or a reliable third party.” If that last phrase raised your eyebrows, you’re not alone. It doesn’t take much legal knowledge or imagination to anticipate disputes over exactly who qualifies as a “reliable” third party, as opposed to one who is not reliable. The best advice for landlords and association boards is to be reasonably flexible about information requests, recognizing that the courts are likely to be more sympathetic to individuals seeking modifications than to entities trying to deny those requests. Unless there is a very good and very clear reason to question a disability or a modification – don’t.

The Review Process

Although HUD acknowledges that it is “usually helpful” for tenants/owners to submit modification requests in writing, the new guidance makes it clear that landlords/associations cannot make that a requirement. “The Fair Housing Act does not require that a request be made in a particular manner or at a particular time,” the guidance explains. The statute requires only that individuals make modification requests “in a manner that a reasonable person would understand to be a request for permission to make a structural change because of a disability.”

That said, landlords/associations should encourage residents to submit modification and accommodation requests in writing, even though they can’t require them to do so. We suggest that our clients have a prepared application packet that includes an application form and a separate form to be filled out by a third party if a request for additional information is appropriate. You should phrase the request for a written application positively, explaining that the landlord/association wants to be helpful, and you should be prepared to help individuals who are unable to complete the application on their own. In most cases, we have found, residents will submit the written application willingly, because they understand that it will eliminate confusion about their request.

It is important to handle modification requests efficiently and even-handedly, doing nothing to indicate bias against disabled individuals, resentment towards them, or a reluctance to approve legitimate requests. Toward that end, landlords/associations should have an established written policy for handling modification requests and should follow that policy scrupulously in all situations. The policy should identify the individuals responsible for managing modification requests and should direct those individuals to give the application packet immediately to residents who ask about modifications. Responsible parties should also be instructed to refrain from making any comments about the request, other than offering to help complete the application if assistance is needed.

The policy should also specify a time period within which the board will review modification requests. Because HUD and the courts may view unreasonable delays as tantamount to rejecting a request, we recommend that boards/landlords complete their review process and issue a decision within 15 days after receiving the completed application and any appropriate supporting documentation. If the application is not submitted in a timely fashion or if the documentation requested is not provided, we suggest that boards/landlords follow up with a second request, to demonstrate a good faith effort to respond to the modification request.

It is also essential to keep detailed records of the application review process. Two years from now, which is when a disputed decision will finally be argued in court, the board members or agents involved may have left; if they are still on site, they certainly won’t recall the details of what they did, when, and why. Your written record should document:

  • When you provided the application packet to the resident
  • When the application was returned
  • When you sent a request for additional documentation, where appropriate
  • When you sent a follow-up request
  • The date the modification request was approved or rejected
  • The reason for the rejection.

Having a formal policy and following it will reduce the risk of mishandling a modification request; documenting your review process will help build the defense you will need should a resident challenge the decision you made.