iStock_000028313630Small-300pxWhen tenants accuse their landlords of housing discrimination, much of what happens next is determined by how the landlord responds. A landlord’s initial reaction to an accusation and subsequent behavior could lower the likelihood of an amicable outcome and even open the door to more liability.

One recent case concerning a tenant and her three children in Cedar Rapids, Iowa (HUD ex rel. Beverly Dittmar v. Elite Properties, LLC. and Robert K. Miell, HUDALJ 09-M-113-FH-40 (July 9, 2010)), is a perfect example of how this can happen.

After losing her home to a flood, the tenant sought an apartment for her family. She approached a landlord who owns and manages over 430 rental properties in the area and asked if she could rent a three-bedroom apartment that became available. For reasons that aren’t clear, the landlord declined but offered her a two-bedroom house for rent instead. The tenant accepted and moved her family into the house, paying a requested $645 as a security deposit and keeping up with timely rent payments each month.

The tenant later complained to the U.S. Department of Housing and Urban Development (HUD) about the landlord, accusing him of refusing to rent the three-bedroom apartment to her because of her sex, in violation of the Fair Housing Act (FHA) (42 U.S. Code §§ 3601-3619 and 3631). Following an investigation, HUD concluded that no reasonable cause existed to hold the landlord liable for the alleged discrimination.

The case could have ended there, with the landlord feeling exonerated and able to move on without having incurred any liability. But instead, the landlord wound up paying dearly, both with his wallet and reputation, thanks to two big mistakes he made in his handling of the tenant’s fair housing accusation:

Mistake #1: Retaliating against the tenant for complaining to HUD. The FHA makes it “unlawful to coerce, intimidate, threaten, or interfere with any person in the exercise or enjoyment of” fair housing rights (42 U.S. Code § 3617), and federal regulations clarify that this includes “[r]etaliating against any person because that person has made a complaint, testified, assisted, or participated in any manner in a proceeding under the Fair Housing Act” (24 CFR § 100.400(c)(5)). When the landlord learned that his tenant complained to HUD about his alleged sex discrimination, he reacted by taking adverse action against her, refusing her rent payments and proceeding with an eviction. As a result, the tenant amended her complaint to include the retaliation component and succeeded—even though HUD believed the underlying matter didn’t have merit.

Mistake #2: Not cooperating with HUD’s investigation. The landlord’s allegedly poor behavior with HUD investigators hurt him even more. According to the HUD administrative law judge’s (ALJ) decision, the landlord displayed defiance, indifference, disrespect, and a lack of cooperation throughout the investigative process. For example, the landlord hung up on investigators during a telephone interview, refused to claim certified letters, walked out on an investigatory meeting without notice or reason, and made rude statements to the investigator. This behavior led the HUD ALJ to impose the maximum civil penalty ($16,000) on both the landlord and his management company for the retaliation claim, in addition to damages for emotional distress and other relief.

As you can see, landlords can easily make things worse for themselves if they’re not careful about how they respond to a fair housing accusation. Check out the Nolo article, “What to Do if a Tenant Accuses You of Housing Discrimination,” for more guidance on this important topic.