Daily Development for
Monday, October 9, 2000
By: Patrick A. Randolph,
Jr.
Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
randolphp@umkc.edu
FAIR HOUSING; CREDIT
EVALUATION: Landlord can base an evaluation of prospective married tenants on
the basis of the income of a one of the prospects, rather than upon their joint
income.
Mencer v. Princeton Square
Apartments, 2000 WL 1459604 (6th Cir. 10/3/00)
Prospective tenants each
had income of about $1000 per month. Landlord claimed, and the court believed,
that the landlord had a long standing policy of requiring that a single prospective
tenant have a gross income of three times the rent. The landlord claimed that
he would not credit both incomes because of the liklihood that one of the
tenants could move out and then the landlord, as a practical matter, would have
to rely upon the second tenant for the rent. Since the apartment applied for rented
for over $500 per month, the tenants did not meet the income requirement. In
addition, the materials they presented in connection with their application
demonstrated that they had, between them, four addresses in the recent past,
and one of the prospects had been on the job only four weeks.
Landlord claimed that he
had rejected these prospects on the basis of "income and job
stability."
The prospective tenants
claimed that landlord had discriminated against them because they were an
interracial couple.
After the tenants
complained to HUD, HUD sent white "testers" to the landlord, who
apparently greeted them affably and tried to persuade them to rent at the
premises, but these testers did not fill out loan applications, and the court
therefore ignored their testimony, commenting that it would be expected that
the landlord would be congenial and welcoming to any prospective tenant in the
preapplication stage.
Reporter's Comment: This
case points out the differences between federal discrimination cases where an
applicant applies for credit and where a prospective tenant applies for
housing. Under the Equal Credit Opportunity Act, the lender cannot discriminate
against someone on the basis of receipt of public assistance, and I do not
believe that a creditor may disregard the income of a coapplicant on the
grounds that the landlord did. Under the FHA, the result is entirely different.
(The reporter for this comment is Howard Lax of the Michigan Bar.)
FAIR HOUSING; REMEDIES;
SANCTIONS: Parties who accept mediation in fair housing case will be bound by
the rules adopted for mediation, and where such rules provide for sanctions in
the form of attorney's fees paid to the prevailing party, and, even where
tenant loses, court will uphold such sanctions regardless of claims of income
disparity or hardship.
Mencer v. Princeton Square
Apartments, 2000 WL 1459604 (6th Cir. 10/3/00)
The basic story of this fair
housing case is reported under the heading "Fair Housing; Credit
Evaluation." The plaintiffs, in pursuing their claim, elected for
mediation pursuant to the federal court rules in Michigan. They expressly
agreed to be bound by the mediation scheme of a Michigan Court Rule that
provides for attorneys' fees and sanctions. The mediator suggested an award to
plaintiffs of $3000, which plaintiffs rejected. The went to trial, rejecting a
$5000 settlement offer from plaintiff. Then things went wrong for plaintiffs. The
trial court found for defendant as a matter of law and the Sixth Circuit Court
of Appeals affirmed.
The trial court had
awarded sanctions to defendant landlord in the amount of $5874 (reduced from
over $8000). The Sixth Circuit affirmed
the award, commenting that, in essence, the plaintiffs made their bed and
should lie in it. The parties had not been required to accept the attorney's
fee and sanction provisions of the court rules when they opted for mediation,
but they did so, presumably for tactical advantage. It would be inappropriate
to permit them to aavoid the consequences of their decision after they have
lost.
Readers are urged to respond, comment, and argue with the daily
development or the editor's comments about it.
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