Federal and state fair
housing laws prohibit discrimination against families with children. This should not be news to anyone. But the federal Housing for Older Persons Act
(HOPA), enacted in1995, allows “age-restricted” housing communities to bar
anyone younger than 55.
HOPA allows two types of age-restricted communities. The most common requires 80
percent of the units to be occupied by at least one resident who is 55 or older. The remaining 20 percent may be occupied by residents younger than 55. This is known as the 80-20 rule. The other HOPA option, less common because it is more restrictive, requires a minimum age of at least 62 for all residents.
To retain their
‘age-restricted’ designation, communities must comply with the regulations
established by HOPA and by related state laws, which either mirror its
provisions or in some cases are more restrictive. This article will focus on the
requirements for 55-and older communities and on the most common compliance
questions related to them.
What happens if a senior
housing community subject to the 80-20 rule fails to comply with it? They could lose their exemption from the age-discrimination
provisions of the Fair Housing laws.
That means they could no longer bar persons under age 55 and would be
subject to discrimination complaints if they did.
Falling out of compliance
can produce a cascade of legal and financial problems. In addition to facing age-related
discrimination claims from people under age 55 and families with children who
are denied occupancy, communities might be sued by existing owners who purchased
homes expecting the community to be age-restricted and who might claim that the
loss of the designation has reduced their value. The litigation risks for associations and the
costs potentially related to them are significant.
What happens if a resident
who is over 55 dies, but his/her surviving spouse doesn’t meet the age
requirement? This
is not uncommon and there are several ways to address the problem. Some communities adopt a “grandfather”
provision, allowing the surviving spouse to remain for a specified period of time
after the older spouse has died. Some communities
adopt “hardship” provisions to deal with other 80-20 rule problems – for
example, grandparents who have to assume responsibility for their under-age grandchildren,
or the resident who needs a full-time live-in caretaker who is younger than
55. Regulations issued by the Department
of Housing and Urban Development (HUD) address the caretaker issue by
specifying that caretakers don’t have to be counted as non-qualified residents
under the federal law for purposes of meeting the 80-20 rule. However, some states and some cities and
towns have adopted stricter rules that don’t provide that exemption, and
age-restricted communities must comply with those requirements as well as with
the federal law.
If the heirs who inherit
an owner’s unit don’t meet the age requirement, must they sell it to someone 55
or older? No. The age restrictions in HOPA communities
target occupancy, not ownership. If the
community doesn’t prohibit rentals, an heir or an unrelated investor younger
than 55 could purchase a unit and rent it to tenants who meet the age
requirements.
Can
an over-55 community require that residents of all units – not just 80 percent
of them – meet the age requirement and/or require that all occupants of each
unit, not just one occupant, must meet the age requirement as well. Communities can’t adopt
rules less restrictive than those in the federal, state or local laws, but they
can exceed them, if the governing documents include a more restrictive standard
or if a required super majority of owners (usually two-thirds) approves an
amendment imposing a more restrictive standard.
However, communities built under state or local programs encouraging
senior housing might also need the permission of the agencies that approved of
the developments in order to change their occupancy rules.
Can
an over-55 community voluntarily relinquish that designation? Possibly, and there might
be good reasons to do so – for example, to expand the pool of eligible buyers
in a slow housing market. However, the
change may require the approval not only of owners not all of whom will like
the idea), but also of the local agencies that approved permits for the development. Many cities and towns welcomed age-restricted
housing specifically because it satisfied a particular type of housing need or,
by excluding children, did not increase demands on schools and other local
resources. Local officials in these
communities may be reluctant to open a door they thought they had closed.
Can
associations limit visits by friends or relatives who don’t meet the age
restrictions? Generally, no, when it comes to daily
visits or visits of short duration.
However, associations can adopt rules limiting the extended stay of
visitors younger than 55 when there is reason to suspect that it may be turning
into a permanent residency. During short-term visits, associations must allow
persons under age 55 to have equal access to amenities. So, for example, while you can prohibit
children from living in the community, you can’t bar them from swimming with
their grandparents in the community pool or prevent them from playing in common
areas while they are visiting.
Are
over-55 communities required to provide services or programs designed for older
residents? HUD’s HOPA rules don’t
require any specific programs or services, but they do require age-restricted
communities to demonstrate “an intent to create housing for older
persons.” As a practical matter, providing
age-appropriate programs and services is the best way to demonstrate that
intent. Associations should also make sure that marketing materials for the
community as well as its rules and governing documents all reflect its over-55
focus.
To
ensure ongoing compliance with the age-restrictions in HOPA and other applicable
state and local laws and ordinances, over-55 communities should periodically
verify the identity and age of their occupants. HOPA specifically requires a census
every two years, but an annual audit is probably the better practice, especially
in communities that are close to the cap on under-age occupants. You typically aren’t required to proactively submit
the census results to HUD or anyone else, but you must keep the information on
file so you can document compliance with the rules if anyone challenges the
community’s over-55 status, or if an agency with jurisdiction conducts a review
to verify compliance.
In
addition to verifying the age of residents, associations should make sure
common areas are equipped with ramps, grab bars and other age-related safety
features, both to limit liability risks and to comply with the Fair Housing Act
provisions prohibiting discrimination against individuals with handicaps. Most multi-family housing developments are
required to comply with these provisions but failing to do so would be
embarrassing, to say the least, for communities created to serve older
residents.
As
a practical matter, providing age-appropriate programs and services is the best
way to demonstrate that intent.
Associations should also make sure that marketing materials for the
community, as well as rules and governing documents, all reflect an over-55
focus.
Gary
Daddario is a partner in the Braintree-based law firm of Marcus Errico Emmer
& Brooks P.C., concentrating his practice in the field of community
association law. He also assists New
Hampshire clients and manages the firm’s office in Merrimack, New Hampshire. Gary can be emailed at gdaddario@meeb.com.
