Board directors who act as property managers can pose a liability threat to associations
Los Angles Times
By: Donie Vanitzian
08 January 2017
Our homeowner association president has a second job as a property
manager for several investors who rent out their condos in our common
interest development. I’ve heard through the grapevine that she
harasses tenants she doesn’t like, including one woman who couldn’t
take it anymore and left.
A neighbor told me that when the owner asked the president what
happened, she told him that the tenant was Jewish and very difficult to
work with. I’m worried that the association may be liable for the
president’s actions if there is a lawsuit. Is there any liability here?
The federal Fair Housing Act prohibits “hostile environment harassment”
conducted on the basis of a protected class, such as religion. Any
tenant who believes that he or she is being harassed, or has been
harassed, may bring a claim against the manager or landlord for a
Even prospective tenants can be a source of liability. If the manager
is making rental decisions based on race or religion, or if the
landlord has encouraged her to do so, anyone she decides not to rent to
can file a claim with one of the appropriate government agency cited
below, or sue in civil court for damage.
The law doesn’t require that prospective tenants show that landlords or
managers hung up signs saying certain religious or ethnic groups are
not welcome. The harassment can be subtle, such as making the
rental-application process intentionally invasive so as to ferret out a
prospective tenant’s race or religion.
As for an existing tenant, simply stating to a third party that
someone’s religion or ethnic background caused them to be difficult to
work does not necessarily reach the threshold of hostile environment
harassment, even though such a belief is loathsome. It is defined as
unwelcome conduct spurred by a legally protected characteristic — such
as religion — that is so severe that it interferes with or prevents the
victim the use and enjoyment of a home.
This conduct could manifest itself in many ways, including making
derogatory statements or jokes about a person’s religion or ethnicity
directly to them, and treating the tenant differently merely because
the person falls within a “protected class,” which is defined by age,
sex, race, national origin or disability.
Claims of hostile environment harassment can be submitted to the U.S.
Department of Housing and Urban Development or a state attorney
general’s office for prosecution. Along with such a complaint, an
aggrieved prospective or existing tenant may file a civil lawsuit for
general and special damages. These damages could include any costs
associated with moving out of a rental unit, any additional rent at the
new home and other out-of-pocket costs. In some civil cases, punitive
damages are imposed against a defendant as a punishment and to deter
When your president acts as a property manager for owners in your
association, then she is representing that landlord-owner’s interests
and those landlords may be liable for her actions and harm she causes
to others. She also may pose a liability threat to the association
There is a fine line between a president representing the association
and simultaneously acting as property manager for real estate located
within a community. Those who believe that they have been harmed by her
might choose to sue the association, and the association might get
stuck paying for legal fees and any damages assessed.
Association insurance policies typically include “reservation of
rights” contingency clauses that allow insurers to not defend actions
that are against public policy, such as discrimination. And if it is
found that she was acting in her official capacity as president, the
association and its board of directors may be jointly and severally
liable for any damage she causes. This source of potential liability is
more than enough reason for titleholders to initiate a petition to
remove this president from her position on the board.
Every member of the board should be an example to the community and
represent all owners and members equally. Even if there have been no
formal complaints or lawsuits filed to date, this manager’s attitude is
a disaster waiting to happen. The titleholders must seriously
reconsider whether someone like this is acting in their best interest
and the best interests of the association.
Zachary Levine, a partner at Wolk
& Levine, a business and intellectual property law firm, co-wrote
this column. Vanitzian is an arbitrator and mediator.