LIHTC Resident Loses Discrimination Claim

May 24, 2010
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Facts: The resident of a two-bedroom unit at a Detroit, Michigan low-income housing tax credit property sued the site owner, alleging discrimination based on her disability. The resident did not specify what her disability was, nor did she provide any documentation supporting her disability claim. But she mentioned in her complaint that she had a broken tibia and suffered from depression. The resident claimed that the property owner harassed her at the time she leased her apartment, and threatened to evict her four times; failed to take action against another resident who allegedly assaulted her; and failed to take action against other residents whose children had vandalized her car.

The first eviction notice was served after the resident received a letter warning her that her failure to pay rent could result in the termination of her lease. Although she entered into a repayment agreement afterwards, she failed to comply with the terms. A year later, the owner learned that the resident had become a full-time student, which had made all the members of her household full-time students. Under LIHTC regulations, if a single resident or all the residents in a unit are full-time students and not married, then the household is usually not eligible to reside in an LIHTC unit, unless it meets one or more of the student exemptions.

Management met with the resident to see if she could find a non-student roommate so she could be reinstated as an LIHTC-qualified resident, but she never completed the process and filed a complaint with HUD. The resident eventually moved to another housing site, but kept the unit to use as a church for a ministry she had started.

Decision: The Michigan court ruled that the actions taken by the owner and manager did not discriminate against the resident because of her disability, and granted the owner’s motion for summary judgment.

Reasoning: The court said the resident could not prove that she suffered from a disability under the FHA. Although the property owner was aware that the resident received some state disability assistance payments at various times over a two-year period, it did not know why the resident received those payments. “This knowledge clearly does not translate into knowledge of a handicap within the meaning of the FHA,” stated the court.

The court also said that the site owner took the right actions by sending notices to quit to enforce a provision of the lease (e.g., payment of rent) and because the resident failed to remain LIHTC eligible. [McCree v. Lexington Village Apartments (4/11/2010)].