Occupancy standards and the Fair Housing laws

QUESTION: I am a buyer’s agent.  My clients are a husband and wife with 3 children, ages 5, 3 and 1.  I showed them a two-bedroom townhome they really like, and I helped them get it under contract.  Now, they are being told that the owners association has a rule limiting occupancy to two persons per bedroom and that it would be a violation of that rule for a family of five to live in the townhome.  Is that legal?

ANSWER: Fair Housing laws prohibit discrimination in any aspect of the sale, rental, financing or advertising of dwellings on the basis of race, color, religion, national origin, sex or familial status (the presence of children in the family).  According to the so-called “Keating Memo,” issued in 1991 by the General Counsel of the US Department of Housing and Urban Development (HUD), an occupancy policy of two persons in a bedroom, as a general rule, is reasonable under the Fair Housing Act.

However, the Memo goes on to state that in connection with a complaint alleging discrimination on the basis of familial status, HUD will carefully examine any nongovernmental restriction to determine whether it operates unreasonably to limit or exclude families with children.  In reviewing such a case, HUD will consider the size and number of bedrooms, configuration of the dwelling, the age of the children, and other factors, such as the capacity of the septic, sewer and other building systems and state or local governmental occupancy requirements. The Memo sets forth several hypothetical situations that illustrate how some of these factors may be applied.

What this means in your situation is that a charge of discrimination on the basis of familial status could possibly be warranted if the owners association seeks to either stop the sale or enforce its “two-per-bedroom” rule against the family and a determination is made based on the factors set forth above that the townhome could reasonably accommodate the family.

You should suggest that the buyers seek legal counsel to advise them of their rights in this situation. They might also consider contacting the NC Human Relations Commission, which investigates complaints of unlawful discrimination in North Carolina.