Owner Not Liable for Religious Discrimination

Facts: A married Muslim couple who dress in traditional attire sought to rent an apartment at a low-income site. After being denied, the couple sued the owner for religious discrimination under the Fair Housing Act.

The rental application asked for a variety information from applicants, but for purposes of this case, the most relevant is the requirement that an applicant provide rental history from the previous five years. The form asked for the names and addresses of past landlords and the locations of the prior residences.

After turning in the application, the wife followed up and spoke to a staff member who told her that her application had been denied for “insufficient income.” The husband called back and asked her how their application could be denied for “insufficient income” when they had a Section 8 voucher that would cover their rent. The staff member told him that she would call him back, and sometime thereafter, the office notified them that an error had been made and the site would continue to process their application.

In November 2009, the husband went to the rental office to check on the status of their application. The staff member gave him a form “letter of denial.” He then asked the leasing specialist if she could have the property manager sign off on the denial letter. According to the husband, the letter stated that their application was denied because of “poor rental history.” The couple sent a handwritten letter to the owner requesting an appeal of the decision, but never received a response.

In selecting tenants to reside at the site, site staff are supposed to follow a specific screening process when reviewing applications. The process is set forth in the resident selection plan. According to the plan, “[a]pplications will be screened in accordance with program eligibility requirements and the criteria set forth in the Resident Selection Plan.” Section XII of the Plan sets forth the “Applicant Screening” criteria: (1) Credit History (2) Criminal History; (3) Rental History; and (4) Income Verification.

According to the manager, when their application was screened for landlord history, after attempting to contact the listed landlords with the information they supplied, she received two returned landlord references. The first was from the husband’s brother, who personally delivered the form. However, the form was incomplete as he had failed to answer any of the pertinent landlord history questions. The form referenced an “attachment,” but he didn’t provide any attachment or further information. The second form returned was from the landlord at the time they were applying to live at the site. The landlord returned a properly completed form, but the form was nevertheless problematic in meeting the screening criteria. The landlord indicated that they were fine tenants, but they were also in the midst of their lease with him and, if they did move out, he would “probably” not rent to them again because “their lease was not fulfilled.” The manager testified that this reference wouldn’t be considered an acceptable landlord reference because a prior lease wasn’t fulfilled. No other landlord forms were returned. Having determined that they didn’t meet the rental history screening requirement, the site didn’t proceed any further in screening their application.

Ruling: A New York district court granted a judgment without a trial in the owner’s favor and dismissed the lawsuit.

Reasoning: The court found that the owner supplied a legitimate, nondiscriminatory rationale for its decision not to rent an apartment to the couple. HUD regulations permit the owners of rental housing units to “screen families on the basis of their tenancy histories.” And while the couple met the first two criteria, the evidence showed that the site was unable to verify a rental history that met the third step of the screening criteria. The information the couple provided in their rental application didn’t meet the five-year rental history requirement, and the contact information was deficient for at least two of the five landlords provided. Accordingly, the evidence supports a legitimate nondiscriminatory reason for the rejection of the couples’ housing application. The couple failed to provide sufficient information for the site to verify a satisfactory rental history pursuant to the requirements of the screening criteria.

However, the court stated that while the site may have adopted legitimate screening criteria for prospective tenants, the manner in which it implemented those criteria with respect to prior rental history was not only unfair to the couple, it was unfair to any prospective tenant who was unlucky enough to have a landlord who wouldn’t immediately respond to a form letter seeking rental history information. With a long waiting list, the site had the luxury of rejecting applications from individuals who would be perfectly good tenants, simply because their previous landlords refused, were too busy, or were simply unwilling to respond in a matter of days to a form letter seeking rental history information. Moreover, it’s clear from the deposition testimony that the site had no “standard procedure” on how to verify landlord history and no uniform requirement of how many letters to send out, when to follow up with a phone call, and when to contact the applicant to let him know that a landlord was unresponsive or unreachable. It also seemed clear from the record that the reason the site didn’t have a standard procedure was that it didn’t need to. If the information provided on the housing application form didn’t yield a favorable reference within a week or two, it was easier for the leasing agents to move on to the next application rather than following up with an otherwise qualified prospective tenant.

Thus, the record supports the couple’s claim that they were treated unfairly. But the same record does not support the basis of the couple’s complaint that they were treated unfairly due to their religious beliefs.

• Williams v. Pines Apartment LLP, September 2017