For the first time, the U. S. Supreme Court upheld the use of “disparate impact” charges under the Fair Housing Law in a case that came out of Texas. The Texas Department of Housing and Community Affairs oversees the federal housing tax credits in Texas. Because the agency awarded too many tax credits to developers building low income housing, thus reducing by a wide margin the amount of rents, the court held that was segregating minorities from the rest of society, which is considered “disparate impact.”.
In an Iowa Court of Appeals decision from last year, Staley vs. Barkalow, the court made class action suits by tenants easier. Secondly, the court ruled that having an illegal provision in a lease agreement is sufficient case for a lawsuit, even if the provision is never acted upon, which could lead to a judgment against the landlord. Iowa Code 562A.11(2): “If a landlord willfully uses a rental agreement containing provisions known by the landlord to be prohibited, a tenant may recover actual damages sustained by the tenant and not more than three months’ periodic rent and reasonable attorney fees.” If it is for the residents of an entire manufactured home community (MHC), and it includes several years, the dollars can add up quickly.
While the defendants in the case argued that you had to attempt to enforce a provision that was illegal, the theory in Iowa is including something illegal in a lease constitutes “a use.” Landlords are legally responsible for what is in a lease, and may include provisions, legal or not, as a business strategy to forestall challenges, assuming tenants do not know the laws as well.
A class action case in Iowa City is being leveled at the largest landlord in the city, the Clark family, dba Apartments Downtown, Inc. which specializes in rentals to University of Iowa students. The case includes thousands of tenants who signed leases from 2010 to 2014, and the plaintiff’s attorney, Christopher Warnock, states “the total amount of illegal charges on tenants and possible punitive damages could total several million dollars.”
While many attorneys likely did not take cases representing individual tenants suing landlords, the opportunity to file a class action lawsuit only requires finding landlords with illegal provisions in their leases. As Kelly tells MHProNews, “Too many landlords have borrowed leases from others, not knowing whether the original document was written by or vetted by an attorney. You can’t just hire any attorney for the job. It needs to be an attorney with experience in landlord/tenant issues.”
Choosing a regular attorney without landlord/tenant experience will result in more expense for that counselor to learn the necessary ropes. For the full article by Joe Kelly, click here. ##
(Image credit: photographersdirect–And justice for all)
