Sexual Harassment – A Fair Housing Priority

     The federal Department of Housing & Urban Development (HUD) and the Department of Justice (DOJ) are making investigations of fair housing violations in three specific areas a priority for 2019. Those areas are sexual harassment, tenant-on-tenant harassment, and policies regarding criminal background checks. Over the next three weeks, I will be providing article on each of these three areas with tips and suggestions on how to avoid problems. I will start with the area that is attracting the most intense level of federal scrutiny – sexual harassment.

Sexual Harassment in Housing

     Federal officials with HUD and the DOJ have made the investigation of sexual harassment in housing a top priority. In 2017, the DOJ launched an initiative to combat sexual harassment in housing, and this initiative was implemented in 2018. There are three major components to the effort: (1) A DOJ/HUD task force to aggressively pursue fair housing sexual harassment cases; (2) an outreach toolkit to leverage the nationwide network of U.S. Attorney’s offices; and (3) a public awareness campaign, including the launch of a national Public Service Announcement.

This third part of the effort – public awareness – includes a “Call HUD; Because Sexual Harassment in Housing is Illegal,” campaign. This component of the national effort is intended to educate the public about the behaviors that constitute sexual harassment and what to do and whom to contact if a person experiences such harassment where they live.

     Since launching the initiative, the DOJ has filed nine lawsuits alleging a pattern or practice of sexual harassment in housing. Since January 2017, the Department has filed or settled 14 sexual harassment cases and has recovered more than $2.2 million for victims of sexual harassment in housing.

     Three cases in particular show how the Feds are approaching sexual harassment in housing.

U.S. v. Robert N. Hatfield (Western District of North Carolina

     In April 2019, the DOJ announced a $600,000 settlement with a NC property owner for allegedly subjecting 17 female prospects and residents to sexual harassment during a more than ten-year period.

     The owner ran a real estate business that involved the operation of residential rental properties and the selling of homes through “owner financing.” The complaint alleged that he subjected female prospects and residents of these homes to sexual harassment by making unwanted sexual advances and comments; groping or otherwise touching their bodies without their consent; offering to reduce or eliminate down payments, rent, and loan obligations in exchange for sexual favors; and taking or threatening to take adverse action against residents when they refused or objected to his advances.

     Under the settlement, Mr. Hatfield agreed to pay $550,000 in damages to former and prospective residents, as well as a $50,000 civil penalty. He is also barred from participating in the rental, sale, or financing of residential properties, and requires that he relinquish his ownership in interest in all such properties.

U.S. v. Chad David Ables (Western District of Tennessee)

     In April 2019, the DOJ announced that it has added more alleged victims in a sexual harassment case against the owner and manager of mobile home rental properties in Henderson County, TN. The landlord is accused of sexually harassing a number of female residents at his properties. He has been accused of conditioning housing or housing benefits on female residents’ agreement to engage in sexual acts; subjecting at least one female resident to unwanted sexual touching; making unwelcome sexual comments and advanced to female residents; and taking adverse housing-related actions against female residents who refused his advances. These allegations must still be proven in federal court and there has been no settlement of the case.

U.S. v. Walden (Northern District of West Virginia)

     In March 2019, the owners and former manager of more than 70 rental properties in West Virginia were held in civil contempt for failing to pay $600,000 still owed under a 2017 settlement with the DOJ in a sexual harassment case.

     In this case, a married couple owned the properties and the husband, while serving as the manager, subjected female prospects and residents to egregious sexual harassment and retaliation. In 2015, the husband pleaded guilty to sexual abuse and other charges and was jailed for two years. The wife has since died.

     The complaint alleged that the husband sexually harassed multiple female prospects and residents from at least 2006 until he was incarcerated. He was accused of engaging in unwanted sexual touching and groping; conditioning or offering tangible housing benefits in exchange for performance of sex acts; touching himself in a sexual manner and exposing himself in the presence of female residents; making unwanted and unwelcome sexual comments and verbal sexual advances; entering the apartments of female residents without permission or notice to sexually harass them; and taking or threatening to take adverse action against female residents who refused or objected to his sexual advances.

     The wife was accused of failing to take appropriate steps to remedy the harassment after receiving tenant complaints. Instead, she allegedly took adverse housing actions against the complaining residents in retaliation for the complaints.

     To resolve the case, the defendants agreed to a settlement, which required them to deposit $500,000 into a compensation fund for potential victims and pay the government $100,000 in civil penalties. The defendants made the first payment of $100,000 but did not deposit the remaining $400,000 into the compensation fund and did not pay the $100,000 civil penalty.

     A federal judge has now held the defendants in civil contempt. The defendants admitted that they had more than $700,000 worth of property but said they could not obtain a loan secured by the properties. They did not want to sell the properties because the husband wanted to transfer his interest in the properties to his children and a forced sale of the properties at a below market price “would only punish innocent persons not party” to the settlement agreement.

     The court position is that obtaining fair market value for the sale of the real estate is not a condition for the defendants to satisfy their obligations under the agreement. As stated by the court, the “innocent persons” at issue in this case are the defendant’s former female residents and prospects who have yet to be compensated for the harm they suffered as a result of the husband’s conduct.

     These cases are reminders of the importance of a zero-tolerance sexual harassment policy for all communities. Every employee – from leasing agents to maintenance workers, whether full or part-time – should receive fair housing training, including training on sexual harassment policies, on at least an annual basis.