Landlords Are Liable for Discrimination of Their Staff

There are two basic ways you, as a landlord, can be liable for housing discrimination:

• You commit discrimination personally; and/or
• Your agents commit discrimination in the course of carrying out their employment duties or otherwise pursuing your interests.

The latter is known as “vicarious liability,” and a recent case from Mississippi is an excellent example of how it can play out in the fair housing context.

Situation: A leasing agent makes a host of “disturbing statements” to testers making it clear that Black people aren’t welcome at the property. The DOJ sues the landlord for racial discrimination. I didn’t do it; the leasing agent did, the landlord replies.

Ruling: Appalled that HUD actually dismissed the case for no reasonable cause, the Mississippi federal court rejected the landlord’s motion for summary judgment, concluding that the leasing agent was acting as the landlord’s agent [United States v. SSM Props., LLC, 2022 U.S. Dist. LEXIS 137648, 2022 WL 3093285].

Takeaway: Although the FHA doesn’t mention vicarious liability, HUD and the courts have historically held landlords liable for offenses committed by their leasing, managing, and other agents. This is true regardless of whether the person knew or should have known of the conduct.

Vicarious liability is most often an issue in harassment cases. While prevention is the priority, you also need to be prepared in case any of your agents do engage in harassment or other discriminatory conduct. How? The starting point is to create a mechanism that applicants and tenants who suffer discrimination at the hands of one of your staff members can use to report to you. Create a report template for victims and management to fill out listing key information about the incident, including:

• The date and time it occurred;
• Where it occurred;
• The parties involved;
• A description of the incident; and
• The names and contact information of any witnesses.

The case above is one of six cases highlighted in the Coach’s January 2023 lesson, “2022 Scorecard: Using Fair Housing Court Cases to Improve Your Compliance Efforts,” available to premium subscribers here.