'Reasonable Accommodation,' Rent Regulation, and the Fair Housing Act

The federal Fair Housing Act Amendments prohibit discrimination in the sale or rental of a dwelling because of a handicap. 42 USC Section 3604(f)(1) and (f)(2). The statute also provides that discrimination 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.” Does the statute require a landlord to offer a handicapped occupant of a rent-regulated apartment the opportunity to rent, at a regulated price, a vacant apartment located on a lower floor? A federal district court has recently suggested that the statute might, indeed, impose such a requirement on the landlord.

The Bentley Case

For 24 years, tenant Bentley has rented a top-floor, rent-stabilized apartment in a four-story walk-up. She recently signed a 2-year renewal lease at a monthly rental of $820.64, but cancer surgery in 2004 has made it difficult for her to climb the stairs to get to her apartment. In October 2004, a first-floor apartment in the same building became vacant, and tenant requested to move to that apartment to avoid climbing the stairs. That apartment, which is also rent-stabilized, had previously rented for $833.58, but, upon vacancy, the rent stabilization law entitled landlord to a 20% increase, which would have brought the rent to $1000.30 per month. Landlord offered to rent the apartment to tenant at that price. Tenant, however, contended that landlord was obligated to rent the first-floor apartment to her at her existing regulated rent, noting that the financial burden to landlord would be limited because landlord would be entitled to a vacancy increase on tenant's top-floor apartment. Tenant brought an action in federal district court for the Eastern District of New York, contending that landlord's refusal to rent the apartment on tenant's terms constituted a violation of the federal Fair Housing Act Amendments. Landlord moved to dismiss for failure to state a claim.

Judge Garaufis denied landlord's motion to dismiss (NYLJ 5/19/05, p. 23., col. 1). He concluded that a request to move between units of an apartment building is a cognizable accommodation within the meaning of the statute. Left open in the decision was whether the accommodation requested by the tenant was “reasonable.” Judge Garaufis set down that issue for a hearing that would focus on the burden to landlord that would result from accommodating tenant's request.

Statutory Analysis

The Fair Housing Act was originally enacted in 1968, but was amended in 1988 to prohibit discrimination based on handicap. The premise of the amendments, however, was significantly different from the premise on which the original statute was enacted. When the Fair Housing Act prohibited discrimination based on race, color, religion, and national origin, the statute mandated that members of protected groups receive the same treatment as non-members of those groups. But when the Fair Housing Act Amendments prohibited discrimination based on handicap, the amendments required that handicapped persons receive treatment different from persons who were not handicapped. That is, section 3604(f)(3) defined discrimination to include two categories of behavior not applicable to members of other protected groups. First, discrimination includes a refusal to permit — at the expense of the handicapped person — reasonable modifications of existing premises “if such modifications may be necessary to afford such person full enjoyment of the premises.” 3604(f)(3)(A). A landlord may, however, condition permission on the tenant's agreement to restore the interior of the premises to the condition that existed before the modification. Id. Second, discrimination 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.” 3604(f)(3)(B).

The first of these provision is clearly inapplicable to cases like Bentley; the statute provides expressly that the cost of any modifications authorized by the statute are to be borne by the handicapped person. That is, the provision is not designed to impose any financial obligations on landlord. It is the second provision — refusal to make accommodations in rules policies, practices, or services — on which Bentley relied. The focus of this provision was clearly on rules adopted by the landlord that would make it difficult or impossible for a handicapped tenant to occupy a unit — rules such as a “no pet” provision that would prohibit a blind tenant from maintaining a seeing-eye dog. No such rule was at stake in the Bentley case. Nevertheless, Judge Garaufis focused on the spirit and purpose of the Fair Housing Act Amendments in concluding that a request to transfer from one apartment to a more convenient apartment raised a claim cognizable under the statute.

In reaching that conclusion, the court indicated that landlords should have to bear the cost of reasonable accommodation of disabled tenants — a proposition that appears nowhere in the statute. Nevertheless, the court could cite to prior cases — generally dealing with landlord's obligation to accommodate the parking needs of disabled tenants — that did discern in the statute an obligation on landlord's part to bear the cost of accommodation. See Shapiro v. Cadman Towers, Inc., 51 F3d 328, 335 (2d Cir. 1995); Hubbard v. Samson Management Corp., 994 Fsupp 1878 (SDNY 1998).

Significant Questions

However, the court's conclusion in the Bentley case raises some significant questions. If Bentley had been a new prospective tenant rather than an existing one, no one would suggest that landlord was obligated to accommodate her by offering her a first-floor apartment at less than the rent a tenant without a disability would pay. Landlord would not be entitled to discriminate against a disabled tenant, but neither the language nor the purpose of the statute suggests that landlord would be obligated to discriminate in favor of a disabled tenant by offering that tenant a lower rent. And, indeed, the Second Circuit has held that a landlord need not accept disabled tenants who receive government rent subsidies under Section 8 when landlord does not accept Section 8 tenants who are not disabled. Salute v. Stratford Greens Apartments, 136 F3d 293 (2d Cir. 1998). The court in Salute made it clear that landlord had no obligation to accommodate a disabled tenant's poverty, even if that poverty is related to the disability.

If landlord would not be required to offer a preferential rent for a vacant apartment to a prospective tenant with a disability, then why would landlord be obligated to offer such a preferential rent to an existing tenant with a disability? The Bentley court never addresses that question directly, but the only plausible answer focuses on the offsetting benefit the landlord in Bentley would receive if Bentley were to vacate her own apartment — entitling landlord to a 20% vacancy surcharge on that apartment. Hence, the court might reasonably have concluded that landlord would bear very little financial loss by accommodating Bentley's request — especially because the rents for the two apartments were nearly identical.

But if that is the basis for the holding in Bentley, how far does the decision extend? Would it apply when the rents of the two apartments are disparate? Would it apply when the vacant first floor apartment is not subject to rent regulation at all? The court in Bentley sidestepped those questions by concluding that the reasonableness of the accommodation is a question of fact to be decided at a hearing. But if the implication of the Bentley decision is that every disabled tenant who requests to move into another vacant apartment survives a motion for summary judgment, then the court will have engendered significant litigation costs for little apparent benefit. After all, in the one case to which the Bentley rule sensibly applies — the case where the two apartments are nearly identical in rent — the landlord will generally have little financial incentive to refuse tenant's request. By contrast, in the case where landlord does have a significant financial incentive to rent to a different tenant, there appears to be little chance that a court will ultimately require landlord to permit the tenant to swap apartments.

As a result, one might read the Bentley decision as one essentially limited to its facts, rather than as a decision that significantly broadens the rights of disabled tenants.

Stewart Sterk, Esq., is the Editor-in-Chief of this newsletter.

The federal Fair Housing Act Amendments prohibit discrimination in the sale or rental of a dwelling because of a handicap. 42 USC Section 3604(f)(1) and (f)(2). The statute also provides that discrimination 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.” Does the statute require a landlord to offer a handicapped occupant of a rent-regulated apartment the opportunity to rent, at a regulated price, a vacant apartment located on a lower floor? A federal district court has recently suggested that the statute might, indeed, impose such a requirement on the landlord.

The Bentley Case

For 24 years, tenant Bentley has rented a top-floor, rent-stabilized apartment in a four-story walk-up. She recently signed a 2-year renewal lease at a monthly rental of $820.64, but cancer surgery in 2004 has made it difficult for her to climb the stairs to get to her apartment. In October 2004, a first-floor apartment in the same building became vacant, and tenant requested to move to that apartment to avoid climbing the stairs. That apartment, which is also rent-stabilized, had previously rented for $833.58, but, upon vacancy, the rent stabilization law entitled landlord to a 20% increase, which would have brought the rent to $1000.30 per month. Landlord offered to rent the apartment to tenant at that price. Tenant, however, contended that landlord was obligated to rent the first-floor apartment to her at her existing regulated rent, noting that the financial burden to landlord would be limited because landlord would be entitled to a vacancy increase on tenant's top-floor apartment. Tenant brought an action in federal district court for the Eastern District of New York, contending that landlord's refusal to rent the apartment on tenant's terms constituted a violation of the federal Fair Housing Act Amendments. Landlord moved to dismiss for failure to state a claim.

Judge Garaufis denied landlord's motion to dismiss (NYLJ 5/19/05, p. 23., col. 1). He concluded that a request to move between units of an apartment building is a cognizable accommodation within the meaning of the statute. Left open in the decision was whether the accommodation requested by the tenant was “reasonable.” Judge Garaufis set down that issue for a hearing that would focus on the burden to landlord that would result from accommodating tenant's request.

Statutory Analysis

The Fair Housing Act was originally enacted in 1968, but was amended in 1988 to prohibit discrimination based on handicap. The premise of the amendments, however, was significantly different from the premise on which the original statute was enacted. When the Fair Housing Act prohibited discrimination based on race, color, religion, and national origin, the statute mandated that members of protected groups receive the same treatment as non-members of those groups. But when the Fair Housing Act Amendments prohibited discrimination based on handicap, the amendments required that handicapped persons receive treatment different from persons who were not handicapped. That is, section 3604(f)(3) defined discrimination to include two categories of behavior not applicable to members of other protected groups. First, discrimination includes a refusal to permit — at the expense of the handicapped person — reasonable modifications of existing premises “if such modifications may be necessary to afford such person full enjoyment of the premises.” 3604(f)(3)(A). A landlord may, however, condition permission on the tenant's agreement to restore the interior of the premises to the condition that existed before the modification. Id. Second, discrimination 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.” 3604(f)(3)(B).

The first of these provision is clearly inapplicable to cases like Bentley; the statute provides expressly that the cost of any modifications authorized by the statute are to be borne by the handicapped person. That is, the provision is not designed to impose any financial obligations on landlord. It is the second provision — refusal to make accommodations in rules policies, practices, or services — on which Bentley relied. The focus of this provision was clearly on rules adopted by the landlord that would make it difficult or impossible for a handicapped tenant to occupy a unit — rules such as a “no pet” provision that would prohibit a blind tenant from maintaining a seeing-eye dog. No such rule was at stake in the Bentley case. Nevertheless, Judge Garaufis focused on the spirit and purpose of the Fair Housing Act Amendments in concluding that a request to transfer from one apartment to a more convenient apartment raised a claim cognizable under the statute.

In reaching that conclusion, the court indicated that landlords should have to bear the cost of reasonable accommodation of disabled tenants — a proposition that appears nowhere in the statute. Nevertheless, the court could cite to prior cases — generally dealing with landlord's obligation to accommodate the parking needs of disabled tenants — that did discern in the statute an obligation on landlord's part to bear the cost of accommodation. See Shapiro v. Cadman Towers, Inc. , 51 F3d 328, 335 (2d Cir. 1995); Hubbard v. Samson Management Corp. , 994 Fsupp 1878 (SDNY 1998).

Significant Questions

However, the court's conclusion in the Bentley case raises some significant questions. If Bentley had been a new prospective tenant rather than an existing one, no one would suggest that landlord was obligated to accommodate her by offering her a first-floor apartment at less than the rent a tenant without a disability would pay. Landlord would not be entitled to discriminate against a disabled tenant, but neither the language nor the purpose of the statute suggests that landlord would be obligated to discriminate in favor of a disabled tenant by offering that tenant a lower rent. And, indeed, the Second Circuit has held that a landlord need not accept disabled tenants who receive government rent subsidies under Section 8 when landlord does not accept Section 8 tenants who are not disabled. Salute v. Stratford Greens Apartments , 136 F3d 293 (2d Cir. 1998). The court in Salute made it clear that landlord had no obligation to accommodate a disabled tenant's poverty, even if that poverty is related to the disability.

If landlord would not be required to offer a preferential rent for a vacant apartment to a prospective tenant with a disability, then why would landlord be obligated to offer such a preferential rent to an existing tenant with a disability? The Bentley court never addresses that question directly, but the only plausible answer focuses on the offsetting benefit the landlord in Bentley would receive if Bentley were to vacate her own apartment — entitling landlord to a 20% vacancy surcharge on that apartment. Hence, the court might reasonably have concluded that landlord would bear very little financial loss by accommodating Bentley's request — especially because the rents for the two apartments were nearly identical.

But if that is the basis for the holding in Bentley, how far does the decision extend? Would it apply when the rents of the two apartments are disparate? Would it apply when the vacant first floor apartment is not subject to rent regulation at all? The court in Bentley sidestepped those questions by concluding that the reasonableness of the accommodation is a question of fact to be decided at a hearing. But if the implication of the Bentley decision is that every disabled tenant who requests to move into another vacant apartment survives a motion for summary judgment, then the court will have engendered significant litigation costs for little apparent benefit. After all, in the one case to which the Bentley rule sensibly applies — the case where the two apartments are nearly identical in rent — the landlord will generally have little financial incentive to refuse tenant's request. By contrast, in the case where landlord does have a significant financial incentive to rent to a different tenant, there appears to be little chance that a court will ultimately require landlord to permit the tenant to swap apartments.

As a result, one might read the Bentley decision as one essentially limited to its facts, rather than as a decision that significantly broadens the rights of disabled tenants.

Stewart Sterk, Esq., is the Editor-in-Chief of this newsletter.