Avoiding Discrimination Claims When Collecting Assessments

by Dee Rowe, CCAM and Mitchell Drimmer, CAM

Homeowners want to feel seen, heard, and secure in their community. But, when collecting assessments, HOAs can inadvertently create a discriminatory environment that leaves some members feeling left behind. In fact, discrimination claims are becoming more common in HOAs across the country, highlighting the need for transparent and fair policies that follow fair housing laws. In this article, we’ll explore best practices for avoiding discrimination claims when collecting assessments. By following these guidelines, boards can create a more inclusive community that values every member’s contribution.

Understand the Fair Housing Act

One way to ensure that your homeowners’ association is following fair housing laws is to have a solid understanding of the Fair Housing Act. This federal law prohibits discrimination in the sale, rental, and financing of housing based on the following:

  • race, 
  • color, 
  • national origin, 
  • religion, 
  • sex, 
  • familial status, 
  • and disability.

Some states, like California, expand this list to include:

  • Age (over 40),
  • Sexual orientation,
  • Gender identity, gender expression,
  • Medical condition,
  • Genetic information,
  • Marital status, 
  • and Military or veteran status.

HOAs must follow these laws by treating all members equally, regardless of these protected characteristics.

By knowing and understanding the Fair Housing Act, HOAs can find potentially discriminatory practices. They can also take steps to make sure they are not unintentionally discriminating against certain members. Avoiding unintentional discrimination includes eliminating policies or processes that may disparately impact a specific group. For example, requiring all residents to speak English fluently discriminates against those who speak other languages.

HOAs should also be aware of the need to offer reasonable accommodations for members with disabilities. You may think of accommodations as allowing service animals or making physical modifications to common areas to make them more accessible. But it’s crucial to remember that concessions can apply to collections, too. For example, reasonable accommodation could be providing auditory copies of collection notices for visually impaired members with any mailed notices required by your state’s collection laws. Failure to make accommodations can result in discrimination claims.

By taking the time to understand and follow the Fair Housing Act, HOAs can create a more inclusive and welcoming community for all members, even when collecting assessments.

Identify Potential Discriminatory Practices

To avoid fair housing claims when collecting assessments, HOAs must find potential discriminatory practices. This includes ensuring that all members receive equal treatment without prejudice. To do this, HOAs should review their policies and procedures to ensure that they do not inadvertently discriminate against any members or groups of members. 

For example, HOAs should be mindful of rules, restrictions, or practices that may disproportionately impact specific groups. An all too common example is a failure to apply for FHA loan approval as a community because you don’t want to attract “lower-class” buyers. Such practices could be deemed discriminatory if they adversely impact a protected group and cannot be justified as necessary for the safety or well-being of the community. In the example of disallowing FHA and VA loans, it would be easy to argue that such policies discriminate against minority or veteran home buyers. Likewise, stop any practice contributing to income discrimination, which can mask prejudice against protected classes.

HOAs can foster a more inclusive and welcoming community by identifying and revoking potentially discriminatory practices. As a result, the association becomes a place that values diversity and promotes fairness. Having an inclusive community reduces the likelihood of discrimination claims. Besides, it ensures that all members can enjoy living within the community.

Create a Uniform Collection Policy

To avoid fair housing claims when collecting assessments, associations must have a clear collection policy in place and enforce it equitably. This uniform collection policy should outline the steps that the HOA will take when a member is late on their payments and should be communicated to all members when they buy their home and annually after that. By having a policy in place before collection issues arise, all members will understand what to expect and what actions the HOA will take if they fail to meet their obligations. For a sample policy, click here.

Having and following a uniform collection policy helps prevent discrimination claims. A consistent approach should be applied to all members, regardless of race, religion, gender, or any other protected characteristic. By treating all members equally, HOAs can prevent any perceptions of discrimination and create a more inclusive community.

A straightforward collection policy sets the foundation for a more equitable community and prevents discrimination claims. With this policy in place, members can trust that they will receive fair and consistent treatment, even when they miss a payment.

Offer Accommodations for Members in Need

With a uniform collection policy, members trust that collection actions aren’t arbitrary or capricious. Yet, even with a stellar collection policy, some members may need accommodations due to a disability, military service, or other special needs. HOAs must recognize and provide for these members to create a genuinely inclusive community. 

When a member requests an accommodation, the HOA needs to engage in an interactive process to decide what is necessary and reasonable. It is crucial that requests not be denied outright. Instead, conduct an investigation to identify their specific needs and find solutions feasible for the HOA. The board must consider all reasonable accommodations, as failing to do so could result in a discrimination claim.

Examples of accommodations include allowing a member with a vision impairment to receive communications via auditory means or providing a sign language interpreter at a collection hearing for a deaf member. By providing these accommodations, HOAs can help reduce their exposure to fair housing claims.

Train Staff and Board Members

Proper training of management, HOA staff, and board members is necessary to ensure that all members are treated fairly and with respect. The training should include how to handle accommodation requests from members with disabilities and how to create an inclusive community that welcomes and supports all residents. While it may seem like a small detail, training can make a big difference in preventing discrimination claims and fostering a positive, harmonious community.

Of course, training doesn’t have to be an intensive, time-consuming process. A little education can go a long way. For example, HOA staff and board members should be familiar with the protected classes on a federal and state level. They should also understand the types of accommodations necessary for members with disabilities and how to handle requests promptly and respectfully.

Moreover, HOA leaders need to set an example of inclusion and respect. This means taking a proactive approach to create a welcoming community rather than responding to complaints or issues as they arise. By promoting a culture of acceptance and understanding, you can help to prevent discrimination claims and create a desirable living environment.

Seek Professional Help When Necessary

If an issue does arise, it’s imperative to address it promptly and professionally. You may need to seek professional help from time to time. Discrimination claims can be complex and require a nuanced approach. In some cases, seeking professional aid may be necessary to ensure that the HOA complies with applicable laws and regulations. This is especially true when collecting past-due assessments from a member of a protected class.

Help can take different forms. Most start with a collection solution specializing in fair and equitable association collections, like Axela Technologies. If a fair housing claim is filed, an HOA may consult with a legal expert specializing in discrimination law. These attorneys can help the HOA to understand its legal obligations and develop policies and procedures that promote fairness and equality. Additionally, an HOA may work with a mediation service to resolve disputes.

Regardless of the professional aid an HOA may need, it’s important to remember that time is of the essence. You must handle discrimination claims promptly and professionally, or the financial penalties will skyrocket. Also, by seeking help early on, HOA leaders can prove their commitment to creating an inclusive and welcoming community.

In conclusion, HOAs must be mindful of fair housing laws when collecting assessments from their members. Associations can avoid discrimination claims by: 

  • understanding the Fair Housing Act, 
  • identifying potential discriminatory practices, 
  • creating clear policies, 
  • providing accommodations for members in need, 
  • training staff and board members, 
  • and seeking professional help when necessary. 

It’s crucial to stay vigilant and committed to equity and inclusion. Remember, your policies are about compliance and creating a welcoming and inclusive community. As Maya Angelou said, “Do the best you can until you know better. Then when you know better, do better.” We contributed to the wealth gap for decades because we didn’t know better. Now that we know better let’s do better.

If your association could benefit from professional collection services that comply with fair housing and fair debt collection laws, contact us today for a free no obligation review of our collection services so we can show you “how the future collects”!

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