Fair Housing, Discrimination, and Sexual Harassment: The Law, Examples, and Best Practices to Avoid Discrimination and Sexual Harassment Claims.

With discrimination claims on the rise and the possible expansion of protected classes (i.e., sexual orientation or transgender status) from a recent United States Supreme Court opinion in Bostock v. Clayton Cty, Georgia, Nos. 17-1617 et. al., 590 U.S. ___ , (more) 140 S. Ct. 1731 (2020), in which the court held that under Title VII, it is unlawful discrimination for employers “to fail or refuse to hire, or to discharge any individual, or otherwise discriminate against any individual” because of their sexual orientation or transgender status, there is never a better time for housing cooperatives to refresh their knowledge of fair housing and employment issues. The law pertaining to fair housing, discrimination, and sexual harassment claims are ever-evolving and a complex field, so knowledge of key factors and best practices will put cooperatives in a better position to avoid unwarranted discrimination lawsuits. First, a recap of some fundamental laws, concepts, and illegal conduct.

The Fair Housing Act and the Protected Classes

The Fair Housing Act makes it unlawful for a housing provider to discriminate on the basis of race, color, religion, sex, national origin, familial status or handicap (42 U.S.C. 3601 et seq). These groups, or categories, are known as the “protected classes.” With the recent United States Supreme Court’s decision in Bostock, supra, ruling that one’s sexual orientation and transgender status falls within the meaning of “sex” for purposes as a protected class although the case involved an employment Title VII discrimination case because the Fair Housing Act prohibits discrimination on the basis of sex, it is likely that the court’s conclusions in Bostock may be equally applied to other federal statutes’ meanings of this term and protected classes. Within the more pragmatic application and concern for housing cooperatives, the Fair Housing Act provides a detailed list of prohibited and discriminatory conduct. The specific language, found at 42 U.S.C. 3604, is summarized by the following:

  • In the sale and rental of housing, it is illegal to discriminate because of race, color, religion, sex, disability, familial status or national origin in the following ways:
  • Refuse to rent or sell housing;
  • Refuse to negotiate for housing;
  • Make housing unavailable;
  • Set different terms, conditions or privileges for the sale or rental of a dwelling;
  • Provide a person different housing services or facilities;
  • Falsely deny that housing is available for inspection, sale or rents;
  • Make, print or publish any notice, statement or advertisement with respect to the sale or rental of a dwelling that indicates any preference, limitation or discrimination;
  • Impose different sale prices or rental charges for the sale or rental of a dwelling;
  • Use different qualification criteria or applications, or sale or rental standards, procedures, such as income standards, application requirements, application fees, credit history analyses or other requirements;
  • Evict a tenant, member or guest;
  • Harass a person. It is illegal under the Fair Housing Act to harass a person because of their race, color, religion, sex, disability, familial status or national origin. This includes sexual harassment;
  • Fail or delay performance of repairs;
  • Limit privileges, services or facilities;
  • Discourage the purchase or rental of a dwelling;
  • Blockbusting; and
  • Deny access to or membership in any multiple listing service or real estate brokers’ organization.

In addition to these types of prohibited discriminatory conduct, the Fair Housing Act also requires housing providers to make reasonable accommodations to housing cooperative members and occupants to allow for reasonable modifications that may be necessary to allow a person with a disability to enjoy their housing. See Section 504 of the Fair Housing Act; 42 U.S.C. 3604(f)(3)(A) and (B). Lastly, it is important to know that discrimination also includes the threatening, coercion, intimidation or interference with anyone exercising their right or assisting another person exercising a right protected by the Fair Housing Act, including the filing of a fair housing complaint.

The Takeaway on Fair Housing for Cooperatives

Housing cooperatives should have internal policies and procedures, including training materials for incoming staff
that educate and remind staff of prohibited and discriminatory conduct in violation of the Fair Housing Act. These policies and internal guidelines, while not be foolproof, nor entirely insulating a housing cooperative from facing Fair Housing Act complaints should provide a basis and standard of conduct for the housing cooperative, its board of directors, committees, office employees and staff to avoid falling in situations and legal pitfalls that may cost the cooperative monetary and punitive damages.

Sexual Harassment and Safe Interactions

While the Fair Housing Act prohibits discrimination based on the basis of one’s sex, so do other federal laws such as Section 109 of the Housing and Community Development Act of 1974, Title IX of Education Amendments of 1972 and Title VII of the Civil Rights Act, which also prohibit sexual harassment and sexual discrimination. Sexual harassment claims typically arise in one of two main types of claims. First, are “quid pro quo” sexual harassment claims. In the context of fair housing, “quid pro quo sexual harassment” is best described as situations where the housing provider or staff requires someone to submit to unwelcoming requests to engage in sexual conduct in order to obtain or maintain housing or housing-related services. Examples include, but are not limited to, situations where a staff member says that an applicant will not be reviewed or approved unless they succumb to sexual acts; threatening to evict or evicting a person for refusing to perform sex acts; and/or refusing to perform repairs unless the member or resident performs sex acts. Sex acts include a variety of things from sexual intercourse, the transmission of sexual content, photographs or videos (i.e. sending profane or pornographic pictures, text messages, emails or other content), the uninvited touching or groping, making sexually explicit comments or remarks, catcalls, ogling or cornering someone. Inappropriate or sexually-content laden jokes can also be considered forms of sexual harassment.

The second type of sexual harassment claims include what is known as a “hostile environment” or “hostile work environment.” This type of sexual harassment deals with the workplace environment. However, in the context of providing housing to others, such instances may include the following:

  • Subjecting someone to severe or pervasive unwelcome touching, kissing, or groping. This may also include more subtle acts such as brushing up aside someone, breathing on someone, or physically blocking someone’s movement;
  • Making lewd comments about a person’s body, looks, or appearance; and
  • Sending severe or pervasive unwelcome text messages, photos, or content as described above.

The list of types and examples of acts, conduct, statements or cues that fall within the scope of sexual harassment are too long to list in a brief article. However, the important takeaway the reader should know is that sexual harassment does not merely consist of overt and grotesque acts. Sexual harassment can also be considered in many subtle ways, through actions or conduct, or even omissions, body language or other subtle gestures. With the United States Supreme Court’s decision in Bostock, supra, it is ever more so important to be aware that sexual orientation and transgender status are considered to be a protected class within the meaning of “sex” in a Title VI employment case. Best practices and caution should be equally applied to housing. Nevertheless, this case shows additional layers and types of conduct, statements, acts or suggestions pertaining to one’s sexual orientation or transgender status may also be considered sexual harassment under fair housing.

Housing cooperatives should at a minimum require a basic level of education and training pertaining to sexual harassment both in the work environment and in the fair housing realm. These trainings and programs should be made available for the cooperative’s directors, officers, employees and staff. Given that the law is fluid and constantly changing with the times, continued education in this area is highly recommended and necessary. Further education is an obvious benefit to all. However, putting action to these best practices and the law may better insulate the housing cooperative from legal action and will also provide for a safer work and housing environment within the cooperative.

For more on sexual harassment in housing cooperatives, see An Anti-Harassment Policy-A Model Policy-is Needed, written by Herb Fisher and published in the summer 2018 issue of the Cooperative Housing Quarterly.

This article was featured in CHQ winter 2020 issue. Click here to read the PDF newsletter.


Matthew T. Nicols is an associate attorney at the Pentiuk, Couvreur & Kobiljak, P.C., with offices in Wyandotte, Michigan and Chicago, Illinois. Nicols focuses his practice primarily in areas of cooperative housing law, and other community and condominium association law.

Does Your Cooperative’s Waiting List Accommodate Disabled Applicants and Members? 

Waiting Lists

Most co-ops offer different types and sizes of units including 1 to 3 bedrooms with various floor plans and square footage combinations. As is often the case, members desire to move from one unit to another. There may be many different reasons for moving such as an increase in family size or a unit with a better view or access to green space or parking. But in some cases members will want to move from their unit to another unit for accessibility purposes or because they have a disability and another unit will better enable them to enjoy the privileges of cooperative living than their current unit.

In such cases the member often presents management or the cooperative Board with a written request to be placed on a waiting list. Virtually all cooperatives maintain waiting lists for this purpose and applicant names are routinely added to the bottom of the list. In many situations when a member decides to sell their unit they seek assistance from the cooperative that then refers the seller to the first name on the waiting list. If the parties can reach a mutually agreed upon sale price, then the unit is sold to the person at the top of the list. Though the seller doesn’t have to sell to any person on the list, the list provides a good starting point for individuals already interested in buying specific types of units.

Does Your Cooperative’s Waiting List Accommodate Disabled Applicants and Members?

Into this process comes a disabled member’s request to move because of his or her disability. It is common practice to add the disabled member to the end of the list because that is fair on a first-come first-served basis. This is particularly so when a member’s name could sit on a list for a number of years without any opportunity to purchase or exchange a unit.

Though it seems unfair, HUD has required cooperative housing providers that maintain a waiting list to advance the name of a disabled applicant or member seeking to transfer because of a disability, to the top of that list.

This means that the disabled applicant or member jumps to the top of the list only behind other disabled applicants or members who have previously made the same request. Nondisabled members or applicants whose names already appear on the list are pushed down the list to make room for the disabled members at the top.

In most cases a member or an applicant for membership who has a disability warranting a specific type of unit such as a unit with no steps or most directly accessible to handicap parking or other specific accessibility feature will qualify to move the member or applicant to the top of the waiting list.

What is Section 504?

HUD has maintained that the Rehabilitation Act of 1973 requires this result.  The Rehabilitation Act of 1973 is a federal law, codified at 29 U.S.C. § 794, that prohibits discrimination on the basis of disability in federally-assisted programs or activities. Specifically, Section 504 prohibits discrimination on the basis of disability in any program or activity that receives financial assistance from any federal agency, including HUD as well as in programs conducted by federal agencies including HUD. Persons with disabilities, persons associated with persons with disabilities, and other persons engaged in certain protected activities under the law are protected by section 504.

Note that the law applies to any program or activity that receives financial assistance from any federal agency including HUD.  Section 504 regulations define “recipient” to include a HUD funded public housing agency or a HUD funded non-profit developer of low income housing.  A Section 8 voucher program or activity also triggers coverage.  However, a private landlord who accepts Section 8 tenant-based vouchers in payment for rent from a low-income individual is not a recipient of federal financial assistance merely by virtue of receipt of such payments.

What Is The Cooperative Suppose To Do?

Thus, according to HUD, when a mobility accessible unit becomes available in the cooperative housing context, the cooperative should make at least the first disabled applicant or member’s name on the list available to the seller for the seller’s consideration. In a traditional landlord-tenant situation, the landlord would be required to offer the unit to the disabled applicant or tenant, but in the cooperative housing situation, the cooperative is not the owner of the unit. The cooperative’s interest is simply ensuring that the applicant or member is qualified or continues to be qualified to reside in the community. Nor is the seller obligated to sell to any particular person disabled or not. The seller is still free to bargain the best sale price for his or her unit.

HUD’s Section 504 regulations at 24 C.F.R. § 8.27 require recipients to adopt suitable means to assure that information on available accessible units reaches otherwise qualified individuals with disabilities who need the features of those units. This means that the cooperative must at least provide the name of the disabled person on the list to the seller. If there is more than one disabled member interested in the unit, the cooperative must repeat this process until all disabled applicants or members have had the opportunity to bargain with the seller. If the seller still has not obtained the price he or she desires then the cooperative may offer the names of applicants without disabilities on the waiting list to the seller.

Cooperative boards and management should review their waiting list protocols and if they are recipients of federal funds; they should ensure that disabled applicants and members desiring to transfer to different units with accessibility features, location or related considerations are advanced to the head of the waiting list.


Attorney Kerry Lee Morgan is of counsel to the law firm Pentiuk, Couvreur & Kobiljak, P.C. and  has extensive experience in matters related to federal discrimination law and has assisted cooperatives to resolve these contentious disputes. He previously served as an Attorney-Advisor with the United States Commission on Civil Rights in Washington, D.C.

Please note this content is provided to our readers for educational purposes but it is not intended and should not be regarded as legal advice. Readers are encouraged to consult with competent legal counsel for personalized guidance.

Federal Appeals Court Affirms Dismissal of Fair Housing Act Lawsuit Over Claims of Smoking in Unit

Housing cooperatives, like other types of community and association housing, face many issues with federal housing laws such as the Fair Housing Act (“FHA”) and Americans with Disabilities Act (“ADA”). While the differences between housing cooperatives, and condominiums, for example, are wide and vast, they are sometimes subject to certain laws. Here, cooperatives and condominiums both must navigate and comply with federal (and state) laws pertaining to Fair Housing. This article, while providing an in-depth analysis of a federal lawsuit involving a condominium owner and the association, involves claims of discrimination under the Fair Housing Act as a result of the failure to ban smoking within the units. This specific instance is something the housing cooperatives, as well as condominiums, face in an ever-evolving and nuanced area of federal housing law.

Introduction

On December 19, 2019, the United States Court of Appeals for the Sixth Circuit issued an Opinion affirming a Michigan federal District Court’s dismissal of a condominium unit owner’s lawsuit alleging discrimination under the Fair Housing Act against a condominium association for its failure to ban smoking as a reasonable accommodation request. This case carries significance for condominium and other association-based communities in how courts continue to address claims under the Fair Housing Act relating to smoking inside a building or unit and the odors that result. This article goes over the history of the case, the Sixth Circuit Court’s opinion and analysis, as well as some key things that the association did that were noteworthy in the opinion.

Although the David v. Echo Valley defendant was a condominium association, which is inherently different from the unique property and occupancy interests within a housing cooperative, the fact that housing cooperatives are also subject to the Fair Housing Act makes this case relevant to cooperatives. While many understand the differences between condominium associations and cooperative housing corporations, they have some shared characteristics and are treated similarly when it comes to some areas of the law, such as Fair Housing. The intent of this article is not to suggest that condominiums and housing cooperatives govern themselves in identical fashions. However, when condominiums and cooperative do have shared concerns and interests, one can learn from the other.

Facts of the Case

The plaintiff in Davis v. Echo Valley Condominium Ass’n, et al.[1], raised several claims against the condominium association and its management agent, including discrimination under the Fair Housing Act, nuisance, breach of covenants (premised under the association’s master deed and bylaws) and other state-law claims. The plaintiff complained, “that the smell of [cigarette and marijuana] smoke regularly emanating from a neighbor’s condo aggravated her asthma.”[2] The plaintiff was a cancer survivor who suffered from asthma, and also at some time was a member of the association’s board of directors. The co-owner initiated complaints to the association’s board of directors and management agent that smoke and odors from an adjoining unit were causing aggravations to her medical conditions, causing discomfort and other adverse effects to her ability to “breathe comfortably” and otherwise live peacefully in her unit.[3] Like many similar situations people face in association and community living, the plaintiff first complained to the neighbor prior to filing any claims in a court of law, but to no avail.

The plaintiff then complained directly to the condominium association. The association and its management agent’s first response was that they sent the neighbor-resident a written letter requesting that they keep the smell of smoke contained. It is worth noting that the association did not have a written policy, Bylaw provision, rule or regulation that prohibited smoking inside one’s condo unit. Instead, the association and its residents long understood that smoking was permitted inside condominium units. After the association received another complaint from the plaintiff, the association hired a heating and cooling contractor and paid for the installation of a fresh-air system which drew in air from the outside, rather than from the basement, in the plaintiff’s unit. The association did this at no cost to the plaintiff.

While the installation of the fresh-air system in the plaintiff’s unit appeared to help and alleviate some of the odors, the plaintiff claimed that the smell and effects of the neighbor smoking in their unit persisted. In the plaintiff’s next move (prior to filing a complaint in a court of law) she submitted a Reasonable Accommodation Request to the association, asking them to prohibit smoking within her building. In response, the Association attempted to amend its bylaws to prohibit smoking, but the proposal failed. Even though the neighbors who were the main source of the plaintiff’s complaints had moved, the plaintiff still filed a lawsuit against the association and its management agent.

Plaintiff/Co-owner’s Lawsuit and Appeal

The crux of plaintiff’s lawsuit against the association was that the association had discriminated against her under the Fair Housing Act (and Michigan law) by refusing grant a reasonable accommodation request to ban smoking, which was claimed to be a detriment to the effects of plaintiff’s disability (i.e., cancer survivor, asthma and chemical sensitivities) and the ability to peacefully enjoy her use of the unit. The plaintiff also brought other claims relevant to condominium associations, notably asserting breach of several covenants within the association’s bylaws, and a private nuisance claim, which is also discussed below. First, we start with the plaintiff’s claim of discrimination under the Fair Housing Act.

In the trial court, both the plaintiff and defendants filed motions for summary judgment. The trial court granted the defendants’ motion for summary judgment, and in doing so, determined that the plaintiff’s request (to ban smoking within the condominium or her building) was not a reasonable accommodation as it would fundamentally alter the association’s already existing policy which allowed smoking. The plaintiff then filed an appeal to the Sixth Circuit Court of Appeals. As discussed below, the Sixth Circuit Court of Appeals affirmed the trial court’s decision to grant defendants’ motions for summary judgment and dismissing the lawsuit.

The Association did not unlawfully discriminate against the plaintiff under the Fair Housing Act by failing to ban smoking.

On appeal, the Sixth Circuit affirmed the trial court’s granting of summary judgment in favor of the association and its management agent. The Sixth Circuit held that the plaintiff’s “proposed smoking ban amounts to a “fundamental alteration” of the [a]ssociation’s smoking policy.”[4] The appeals court reasoned that the smoking-ban was not an accommodation or mere adjustment, but rather, an entire “rewrite” of the association’s policy.[5] More notable, because the association lacked any specific policy banning smoking and because there was a long-established understanding within the association that smoking was permitted, the Sixth Circuit further claimed that the plaintiff’s proposed ban “would intrude on the rights” or other co-owners.[6] The Sixth Circuit’s ruling relied on prior federal cases reviewing similar FHA claims and reasonable accommodations regarding smoking bans.

Under the Fair Housing Act (hereafter, the “FHA”) (and its amendments)[7] it is unlawful to “discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection with such dwelling because of a handicap of’ that person.”[8] “Discrimination” also includes “a refusal to make reasonable accommodations in rules, policies, practices, or services when such accommodations may be necessary to afford such person equal opportunity to use and enjoy a dwelling.”[9] In order to state a prima facia case for discrimination under the FHA for refusing to grant a reasonable accommodation request, a plaintiff must first prove a number of elements.

While the FHA prohibits discrimination based on one’s race, color, religion, sex, national origin, familial status or disability, this case and article focuses on the “disability” class of claimants. From this, it follows that a plaintiff must first prove that he or she suffers from a handicap or disability. Next, the plaintiff must allege and show that the accommodations sought were “necessary.” Third, the plaintiff must prove that the request was a “reasonable accommodation.” The Sixth Circuit looked to each of these factors in its analysis of the plaintiff’s claims in Davis v. Echo Valley, et al. While little was offered by the plaintiff to prove the first element (i.e., showing of a disability or handicap), the Court’s ruling focused more on the second and third requirements (the “necessary” and “reasonableness” factors), rather than whether the plaintiff suffered from a disability or handicap.

Requests for reasonable accommodations must be “necessary.” The Sixth Circuit agreed with the trial court’s characterization that the plaintiff’s proposed smoking ban was not “necessary” to afford her the ability to use and enjoy her dwelling unit. In making that determination, the Sixth Circuit Court looked at the plaintiff’s ability to “use her condo for “several years” despite the [association’s pre-existing smoking policy]” in determining that plaintiff’s request was better couched as a request for “better opportunities” rather than a strict necessity in order to reside, live and enjoy her condo unit.[10] These facts proved it difficult for the plaintiff to show that the smoking ban was necessary to afford her the ability to use and enjoy the dwelling unit.

The focus then shifted on whether the plaintiff’s accommodation request was “reasonable.” The adjustment the plaintiff’s request had on the association’s policies, however, was deemed by the court to go too far. As stated by the Sixth Circuit “an adjustment goes too far if the costs of implementing it exceed any expected benefits it will provide the person requesting it.”[11] In order to be “reasonable,” any requested change in the associations rules or policies, is not determined upon whether the request is a moderate or fundamental change to the policy(ies), but rather, “whether the request is a modest adjustment or fundamental change of the “rule, policy, practice, or service” that the plaintiff challenges.”[12] The court further explained that a reasonable accommodation request seeks a “fundamental change if it turns the challenged policy into something else entirely.”[13]

Looking at the plaintiff’s request to ban smoking, the court concluded first, that the smoking ban would improperly interfere with the rights of third parties (i.e., other co-owners within the condominium association) and their right to smoke in their units.[14] As noted by the Court, it is not unlawful to smoke inside one’s home or condominium unit (absent a policy). Additionally, the court reasoned that forcing the association’s policies from a “smoking-permitted policy” to a “smoking-prohibited policy” would constitute an entire rewriting of the policy rather than an adjustment.[15] The plaintiff, therefore, failed to establish that the accommodation request was both (i) reasonable, and (ii) did not result in a fundamental change to the association’s policies.

Breach of Covenants (Condominium Bylaws) and Nuisance Claims.

Unlike condominiums, which are typically governed by statutory schemes, such as Michigan’s Condominium Act for example, (see MCL § 559.101 et seq.), which laws may require certain covenants, terms and conditions be enumerated within the association’s master deed and bylaws, cooperative governing documents (i.e., Articles of Incorporation, Bylaws, Occupancy Agreements, Rules, Regulations & Policies), may contain similar covenants, provisions or policies, as those in the fact of the Davis v. Echo Valley case.

Next, the Sixth Circuit addressed the plaintiff’s several claims that by allowing smoking inside condominium units, the association was failing to enforce several covenants within the Master Deed and Bylaws. The Court also addressed the plaintiff’s state law nuisance claims. Both, however, can be addressed in the context of the association’s covenants. Specifically, the plaintiff claimed that the association failed to enforce the requirement that co-owners must keep their units “in a safe, clean and sanitary condition,” i.e., the covenant prohibiting co-owners from creating a nuisance or annoyance to other co-owners, and doing acts that would increase the rate of insurance on the condominium. Here, all of the plaintiff’s claims fell short.

First, looking to Michigan law that restrictive covenants (such as those alleged by the plaintiff in Davis v. Echo Valley, et al.) must be strictly construed against persons or parties claiming to enforce them. Moreover, any ambiguities are resolved in favor of one’s free use of his/her property.[16] Next, looking to the association’s history, the Sixth Circuit noted that from a historic perspective, the association had never prohibited or restricted smoking. Nor did the language of the association’s bylaws or rules and regulations show any support that smoking was prohibited. Rather, the bylaws and policies showed that the association had in fact, banned other activities ranging from restrictions on certain pets or animals, to display signs or possession and use of BB guns. The Sixth Circuit Court concluded that if the association intended or wanted to ban smoking, such ban or prohibition would be reflected in the bylaws or policies that ban other activities or things.[17] In short, a smoking ban was not consistent with the association’s bylaws or policies, nor their history.

In determining that the association had not failed to enforce the covenant of providing safe, clean and sanitary conditions, the court again referred to the association’s bylaws and policies. Because the policies allowed smoking, and historically so, the court determined that some amount of smoke would constitute “ordinary” in the context of sanitary and clean conditions and that such levels could not “be considered a “danger” or “pollution”.

In looking at the plaintiff’s nuisance claim under both theories that the association’s breached its covenants and plaintiff’s claim under common law, the Sixth Circuit looked to state law. In Michigan, a private nuisance is an “unreasonable interference with the use or enjoyment of property” that results in significant harm.'”[18]  According to Michigan case law, many courts agree that a nuisance claim provides no way for relief in the context of smoking. As noted by the Sixth Circuit Court “[the plaintiff] chose to live in a condo complex whose bylaws do not restrict smoking. As other courts have found, while even a small amount of smoke might be a nuisance in a complex that bans smoking, the same cannot be said for a complex that allows it.”[19] To this regard, the Court noted that despite the plaintiff’s alleged “sensitivities,” which may be more so than an average person, a “nuisance is not subjective.”[20]

The plaintiff’s other breach of covenant claims against the association failed. The plaintiff additionally alleged that smoking inside the unit caused an increase in the rate of insurance because it constituted a fire hazard. The Court dismissed this claim, again because of the association permitted smoking. Lastly, the plaintiff’s claim that smoking inside constituted unlawful and offensive activity was dismissed on procedural grounds, notably dealing with the plaintiff’s failure to raise this issue with the trial court.

Learning from Davis v. Echo Valley Condominium Association

There were some important things that the association and its management agent did, in this case, played a role in obtaining a dismissal of the lawsuit. The Sixth Circuit Court noted these actions taken by the association and its management agent. First, the association and its management agent did not ignore the plaintiff’s complaints and requests. Rather, they attempted a compromise and alternative resolution. These efforts were all noted by the Sixth Circuit Court and helped to “undermine” the plaintiff’s claim that the association and its management agent failed to enforce the bylaws.[21]

Specifically, the association first wrote a letter to the occupant in the condo unit that the plaintiff claimed the smoke and odors emanated from. The association asked the plaintiff’s neighbor to keep the smell of smoke from intruding into the plaintiff’s unit and contained. Although this effort did not cure the plaintiff’s claims, the association did not stop there. After the plaintiff continued to complain, the Board of Directors had a clean air unit/air purifier installed in the plaintiff’s unit, all at the association’s expense. When the plaintiff continued to complain, the association even went as far as to circulate a proposed amendment to the bylaws providing for a smoking ban. However, the proposed amendment for a smoking ban failed to pass by a majority vote. All of these efforts showed that the association made concerted efforts to resolve the plaintiff’s complaints. While no single effort was determinative of the outcome of the case, the Court did make sure to note the association’s efforts, which did factor into the court’s ultimate decision. 

What is important to take away from this case is that the association’s actions and attempts to resolve plaintiff’s complaints without first resorting to extremes; the association taking neither a “do-nothing” approach nor instantly pushing a smoking ban policy change without first exploring alternative methods of resolution, played an important role in the outcome of the case. Housing cooperative corporations may take a similar approach to address member complaints when a cooperative does not have an express smoking ban within its governing documents.

Even though complaints about smoking may be common, they cannot, and should not be met with one standard common approach or singular answer. With these types of cases, a Cooperative would be best served by taking a hard look at the member’s complaints to first understand the facts, the nature and severity of the complaints, the alleged effects claimed by the member-owner, and the proposed requests the member seeks. Understanding the nature and allegations of a resident’s complaints about smoking will allow the cooperative to determine and craft an appropriate and well-thought response. A well-rounded response providing for multiple steps or efforts, such as the association’s response in Davis v. Echo Valley, et al., proved to be worthwhile in helping obtain a dismissal of the plaintiff’s lawsuit. A response such as that from the association in the Davis v. Echo Valley, et al. case is likely crafted by a well-informed Board of Directors, with the assistance of its management agent and the cooperative’s legal counsel, all of whom should understand not only the policies and rules in place but also, the make-up and preferences of the membership and cooperative community.

About the author

Matthew T. Nicols is an attorney, providing legal advice and assistance to cooperatives in resolving conflicts amongst the Board of Directors. He has experience in litigating disputes involving directors’ wrongful and harmful conduct to the cooperative.

Please note this content is provided to our readers for educational purposes but it is not intended and should not be regarded as legal advice. Readers are encouraged to consult with competent legal counsel for personalized guidance.

References

[1] Davis v. Echo Valley Condo. Ass’n, 945 F.3d 483 (6th Cir. 2019).

[2] Id. at 486.

[3] Id. at 487.

[4] Id. at 492 (citing Howard v. City of Beavercreek, 276 F.3d 802, 806 (6th Cir. 2002))

[5] Id.

[6] Id.

[7] Pub. L. No. 100-430, § 6, 102 Stat. 1619, 1620–22; 42 U.S.C. § 3604

[8] 42 U.S.C. § 3604(f)(2)

[9] 42 U.S.C. § 3604f)(3)(B).

[10] Davis v. Echo Valley Condo. Ass’n, 945 F.3d at 490.

[11] Id. (citing Smith v Lee Assocs., 102 F.3d at 795.

[12] Id.

[13] Id.

[14] Id., at 492.

[15] Id.

[16] Id., at 493 (citing Moore v. Kimball, 291 Mich. 455, 289 N.W. 213, 215 (1939); Millpointe of Hartland Condo. Ass’n v. Cipolla, No. 289668, 2010 WL 1873085, at *1 (Mich. Ct. App. May 11, 2010) (per curiam)

[17] Id., at 493

[18] Davis v. Echo Valley, et al., supra at 494 (citing Adams v. Cleveland-Cliffs Iron Co., 602 N.W.2d 215, 222 (Mich. Ct. App. 1999).

[19] Id. (citing Schuman v. Greenbelt Homes, Inc., 69 A.3d 512, 520 (Mich. Ct. Spec. App. 2013; and Nuncia v. Rock Knoll Townhome Vill., Inc., 389 P.3d 370, 374-75 (Okla. Civ. App. 2016).

[20] Id. at 495 (citing, Schuman, supra at 525).

[21] Davis v.Echo Valley, et al., at 495

3 Reasons Your Cooperative Attorney Needs to Review Contracts

Your Cooperative attorney wears many hats.  Obviously they will litigate your nonpayment cases and evictions, but sometimes Board’s and management companies forget to use them for arguably the most important task…reviewing contracts.

We see all too often that Cooperative’s will rely on canned or template contracts provided to them by the vendor/contractor or perhaps one they retrieved on-line thinking it must legally protect their interest.  Sometimes they are right.  Often, they are not, and it can cause many problems and cost your membership thousands, if not tens of thousands of dollars.

Calling your attorney after you signed a bad contract is trying to put the horse back in the barn. Here are a few examples to let the message sink in:

1. Management Contracts

While the vast majority of management companies we know use standard language widely accepted in the industry, many times, there will be terms within the management contact that can be very unfair and problematic.  Your cooperative attorney will spot these right away.  Are you agreeing to a term that cannot be canceled upon 60 days’ notice?  But, are you responsible for the entire term if you want to change management companies?   What are your indemnification obligations?  If the cooperative has to reimburse the management company as a result of their actions which caused a lawsuit, you should not necessarily be automatically responsible. We will make sure the management companies use language that avoids the cooperative isn’t responsible for their mistakes.   There are big differences in the terms: “negligence” and “gross negligence.”  The difference may cost you.

2. Contracts for Construction

Your cooperative attorney will assure essential terms are mandatory.  Adequate guarantees of workmanship and warranties are non-negotiable.  We had a client years back who did not have our office review the contract on a 7-figure project.  The workmanship was horrid and required massive repairs. The contractor refused to provide anything to remedy the situation since it fell outside of a short warranty period.  The client should not have had to pay out of pocket for the repairs.  Our own experts verified the poor workmanship, yet the court held the client to the strictest reading of the contract terms. Since the repairs came after the expiration of the short warranty/guarantee of workmanship, they were stuck and the contractor got off scot-free.   The reason we use this example is that the court stated to the parties during the ruling, this should have been caught before signing the contract and his hands were tied.  Obviously, he felt bad for the injustice that occurred, but people may enter into bad deals.  This one was.

3. Landscaping Contracts

Be wary of deals where you are getting a discount in consideration for extended terms of contracts. We have seen a lot of these vendors give you a sweet deal if you sign on for 3-5 years. However, if you cancel it any sooner, they will hit you to repay the discounted amounts.  What happens if you terminate because of poor workmanship? It seems unfair the contractor should be rewarded for their poor service and you have to compensate them in a form of liquidated damages because of their failures.  This is not cool in our book, and it shouldn’t be for you either.

What is the takeaway?

First, Contracts that your cooperative attorney did not draft are not contracts looking out for your interest.

Second, contracts that your cooperative attorney did not review cannot be relied upon to assure your interest has been protected. My dad who is an engineer taught me a great lesson growing up: measure twice, cut once. It rarely requires extensive time or costs to have your cooperative review any proposed contract or to provide proposed revisions or supplemental addendums, or what we call “wrap around contracts.” There is nothing more frustrating than a client being screwed on poor workmanship, or an unconscionable contract term that could have been prevented, particularly those that result in an otherwise good case, being lost.

 

About the author

Creighton D. Gallup in an experienced Partner with Pentiuk, Couvreur & Kobiljak, P.C. He has drafted proposed legislation exempting housing cooperatives from the Michigan Truth in Renting Act and the Michigan Consumer Protection Act. You may recognize him as Creighton is a frequent instructor at NAHC and MAHC where attendees benefit from his many years’ experience working with management companies and housing cooperative boards.

 

Please note this content is provided to our readers for educational purposes but it is not intended and should not be regarded as legal advice. Readers are encouraged to consult with competent legal counsel for personalized guidance.

Outdoor Security Cameras at Your Housing Cooperative

The installation of security cameras is widely considered amongst cooperatives mainly for the security and surveillance of its parking lots. The installation of security cameras has its benefits as well as its detriments, but it does not come without issues for multifamily housing properties. There are legal ramifications that are associated with the installation of outdoor security cameras on cooperative premises.

The installation of security cameras, which encompasses the hardwiring of an electrical fixture to the exterior of a building, could seriously compromise not only the structural integrity of the building and/or unit(s), but could also compromise the safety of other members of the cooperative. Although it may seem that security cameras are a minor addition, affixing anything, regardless of how small in size the fixture is, to the exterior of the buildings may compromise the structural integrity of the building or may interfere with existing plumbing, electrical, gutters, downspouts, rain guards, or roofs. A cooperative does not want to face issues with deteriorating exterior structures or compromised service lines located within the interior structure of the building down the line if the exterior structure was damaged or if any vital service lines within the walls were compromised by the installation of the security cameras.

More importantly, issues with the electrical aspect of the installation arise if the electrical wiring of the security cameras were not done properly. Generally, as the buildings of a cooperative are comprised of units that share a common structural foundation, it is vital that the installation of any electrical device does not create any fire or safety hazards, or compromise the structural integrity of the exterior structure, or compromise the plumbing or electrical services of other members of the cooperative. Further, the issue of building code violations also arise if the installation of the security camera is installed in violation of any city of building code.

Implementing the installation of security cameras to the exterior structure of the building may bring challenges for a cooperative. The cooperative could potentially face future liability as a result of the altering of the general common elements of the buildings. The cooperative must protect itself and its members so that the cooperative does not lend itself to future litigation or loss of unit or units due to safety and fire hazards that may stem from the installation of security cameras. A cooperative may find that it would be in its best interest to preserve the current structural integrity of the buildings and not allow for the installation of security cameras.

If a cooperative desires to implement the installation of security cameras for security and surveillance purposes on its buildings to observe the parking lots or any other general common element located on the cooperative premises, the cooperative must be aware of the problematic issues that could likely arise, outside of the possibility of compromising the structural integrity of the Cooperative. Such issues that could arise, but are not limited to:

The Position of the Camera Lens

If a cooperative desires to install security cameras mainly for the oversight and protection of its parking lots, it must be aware that at no time should any camera lens have a view of anything but the parking lot. The camera lens cannot be facing towards any member’s front or back porch. If the cooperative were to also consider having security cameras installed in any other area of cooperative premises, the camera lens can only face that specific general common element, and not any member’s front or back porch area. The cooperative’s board must be aware that in the event that the security cameras are being improperly used and the cooperative is sued, the cooperative will have to defend itself.

Security Camera Policies and Procedures for Board Members, Office Staff, Maintenance Staff, and Management to follow

Legally speaking, everyone is afforded a reasonable expectation of privacy. It is the cooperative’s duty to see that each member is protected and there is not an invasion of anyone’s privacy with respect to the operation and security cameras. The cooperative’s board must implement reasonable policies and procedures for those office and maintenance employees to follow whom are to come into contact with the security cameras. The board may also want to adopt similar policies and procedures for itself to follow, if any board member is to also come into contact with the security cameras. The implementation of reasonable policies and procedures for all to follow with respect to the handling of the security cameras and its footage is vital so that the cooperative does not lend itself to future litigation in the event that the security cameras are improperly being used.

Recordkeeping

With the installation of security cameras comes the burden of recordkeeping. The cooperative’s board would have to determine the time frame in which it will retain such footage. Said proposed timeframe in which the cooperative was to retain such footage could result in a heavy burden for the office and maintenance staff. Generally, as there are many buildings that make up a cooperative premises, there would be multiple cameras to extract footage from each day, week or month. The implementation of the security cameras could take away from the day to day operation and management of the Cooperative. Moreover, there is also the risk of forgetting to record, the deletion of helpful information whether on accident or on purpose, or even the failure to turn the cameras on that would without a doubt cause a heavy burden on the cooperative. Moreover, there is a high probability that members of the cooperative would be requesting access to such footage that would, without a doubt, take away from the day to day operation and management of the cooperative.

Cooperative Member Complaints

The installation of security cameras could open the floodgates with respect to member complaints. There is a high probability that the cooperative office staff, management and/or the cooperative’s board is going to have to micromanage every member complaint and request for footage. This micromanaging will, without a doubt, tie up the day to day operations of the cooperative as well as create an influx of issues at board meetings with violation hearings.

Insurance

As the interior/exterior structure of the building would be altered with security cameras, the cooperative must be aware of the insurance policies that would have to be implemented to protect the cooperative. The cooperative would have to contact its insurance agent to inquire what policies and limits would need to be obtained and maintained by the cooperative. A major drawback to implementing the installation of security cameras on the buildings is the fact that the security cameras could cause damage to the interior/exterior structure of the dwelling unit if the security camera is installed improperly, or if the contractor causes damage to the building, or if there is inclement weather and the security camera is extracted from its hardware, or if the interior/exterior structure cannot withstand the weight of the security cameras and causes damage to the structure internally or externally. The cooperative must be aware of the potential issues that accompany the installation of security cameras, and the cooperative’s board must protect the cooperative by obtaining and maintaining the proper insurance policies and limits for the installation of all security cameras as alterations would be done to the interior/exterior of a general common element.

Selection of Contractor

The cooperative’s board will have to select a contractor to perform the installation of the security cameras. The board will have to meet with individual contractors at a board meeting and listen to their proposals for installing the security cameras. The board must also request that every contractor is to provide evidence that they are licensed and fully insured as well as provide a certificate of insurance for Workers’ Compensation and liability before work is commenced.

Selection of Security Cameras

The cooperative’s board will have to decide what type of security cameras are to be installed on the buildings and how the cameras will be wired into the electrical system, whether it be into the electrical system of a unit or whether an electrical box will have to be included. The board will also have to decide on the specific aesthetic criteria so that all cameras are the same color and type so that there is uniformity within the cooperative.

Tampering of Security Cameras

The cooperative’s board must also be mindful that members or their guests could vandalize or tamper with the security cameras. It would be in the board’s best interest to implement a policy change within the Rules and Regulations that would prohibit the tampering of cooperative security cameras.

If a cooperative were to decide that it would allow for the installation of security cameras, the cooperative’s board must be mindful of the above-listed areas of concerns that not only affect the day to day operations of the cooperative but also affect the livelihoods of the members. As stated above, every individual is legally afforded a reasonable expectation of privacy. It is vital that the cooperative preserve and afford every member with a reasonable expectation of privacy and not use the security cameras to invade anyone’s privacy.

In sum, the installation of security cameras to the interior/exterior structure of the buildings will no doubt bring many challenges to a cooperative. The cooperative could potentially face future liability as a result of the installation of the security cameras to the general common elements of the cooperative. The cooperative must be mindful that it must protect the cooperative and the members so that the cooperative does not lend itself to future litigation or loss of any unit or units due to safety and fire hazards that may stem from the installation of security cameras. The cooperative must be also mindful of the fact that the installation of security cameras will not come without problems as difficult enforcement and operational issues will arise, such as recordkeeping and responding to member complaints as well as the threat of improper use of the cameras by staff that could lead to invasion of privacy claims. Cooperatives considering installing outdoor security cameras on cooperative premises should consult its cooperative attorney as there are legal ramifications that are associated with the installation of outdoor security cameras.

Please note this content is provided to our readers for educational purposes but it is not intended and should not be regarded as legal advice. Readers are encouraged to consult with competent legal counsel for personalized guidance.


Alyssa Gunsorek is an associate attorney with experience in contract negotiations. She has contributed articles for various publications including the MAHC Messenger, NAHC’s Housing Cooperative Quarterly, and Pentiuk, Couvreur & Kobiljak’s Cooperative Law Journal.