Can (or should) Associations Limit The Maximum Number of Unit Occupants
For many associations, contained among more common restrictions prohibiting nuisances and exterior modifications, are limitations on the maximum number of occupants permitted in a unit (e.g. 3 or 4 persons per dwelling). Whether, and the extent to which, such restrictions are enforceable is the subject of this article. (Not addressed is how many individuals constitute a “family” in accordance with limitations referring to single family use.)
Ordinarily, restrictions limiting the number of occupants are suspect under the Fair Housing Act, which prohibits discrimination based on “familial status”. Although the term “familial status” would appear to govern all types of family relations, Section 3602 of the Fair Housing Act limits its application to families with minor children. A numerical occupancy limitation, the effect of which would prohibit a husband and wife with three minor children from residing in a two (2) bedroom home, thus violates the Fair Housing Act – and constitutes discrimination based on familial status. Conversely, “familial status” does not implicate “family” relations of individuals who have attained or are over the age of 18, as is the case in age-qualified communities.
The entire concept of age-qualified housing is created as an exemption from Fair Housing discrimination laws. Indeed, Section 3607 of the Fair Housing Act, which permits and governs age qualified housing, is titled “Religious organization or private club exemption”. In relevant part, Section 3607 provides as follows:
(b) (1) Nothing in this title limits the applicability of any reasonable local, State, or Federal restrictions regarding the maximum number of occupants permitted to occupy a dwelling. Nor does any provision in this title regarding familial status apply with respect to housing for older persons.
(2) As used in this section, “housing for older persons” means housing- …
(C) intended and operated for occupancy by persons 55 years of age or older, and-
(i) at least 80 percent of the occupied units are occupied by at least one person who is 55 years of age or older;…
Age qualified communities created pursuant to Section 3607 are thus expressly exempted from familial status discrimination. This means that to the extent age of occupants is relevant, an age-qualified association need only comply with Section 3607 (requiring that at least 80 percent of units are occupied by persons 55 years of age or older). Accordingly, in age-qualified associations, a numerical occupancy limitation cannot be deemed in violation of the (Fair Housing Act) prohibition on discrimination based solely on familial status.
Even in age qualified communities, occupancy limitations can nonetheless constitute discrimination. The Fair Housing Act also applies to discrimination based on race, color, religion, sex or national origin, as well as to the refusal to make reasonable accommodations to the handicapped. On its face, a numerical restriction would appear to be neutral (non-discriminatory). Courts, however, have looked beyond the mere wording of restrictions to find discrimination when their application have “disparate impact” on a protected class (race, color, religion …). For example, when enforcement of the restriction impacts Caucasians different than Latin Americans, racial discrimination may be found. If it is statistically true that Latin Americans tend to have larger families than Caucasian Americans, then a (facially neutral) numerical limitation may constitute a violation of the Fair Housing Act based on discriminatory effect. Disparate impact analysis should thus be taken into consideration. Specifically, the Code of Federal Regulations (which implements the Fair Housing Act), provides as follows:
§ 100.500 Discriminatory effect prohibited.
Liability may be established under the Fair Housing Act based on a practice’s discriminatory effect, as defined in paragraph (a) of this section, even if the practice was not motivated by a discriminatory intent. The practice may still be lawful if supported by a legally sufficient justification, as defined in paragraph (b) of this section. The burdens of proof for establishing a violation under this subpart are set forth in paragraph (c) of this section.
(a)Discriminatory effect. A practice has a discriminatory effect where it actually or predictably results in a disparate impact on a group of persons or creates, increases, reinforces, or perpetuates segregated housing patterns because of race, color, religion, sex, handicap, familial status, or national origin.
(b) Legally sufficient justification.
(1) A legally sufficient justification exists where the challenged practice:
(i) Is necessary to achieve one or more substantial, legitimate, nondiscriminatory interests of the respondent, …; and
(ii) Those interests could not be served by another practice that has a less discriminatory effect.
(2) A legally sufficient justification must be supported by evidence and may not be hypothetical or speculative. …
Once it is determined that a restriction has discriminatory effect, enforcement is only possible if a “legally sufficient justification” exists – i.e. that the restriction is necessary to serve a legitimate interest; and, that the legitimate interest cannot be served by a non-discriminatory alternative. Significantly, upon a finding of disparate impact, the burden of proving the legally sufficient justification shifts to the entity attempting to enforce or defend the restriction (the Association).
Also relevant is Section 3604 of the Fair Housing Act, which affords additional protections to handicapped persons:
(3) For purposes of this subsection, discrimination includes–
(A) a refusal to permit, at the expense of the handicapped person, reasonable modifications of existing premises occupied or to be occupied by such person if such modifications may be necessary to afford such person full enjoyment of the premises…
If application of the maximum occupancy limitation would prevent a handicapped person from residing in a unit (have the opportunity to use and enjoy a dwelling), then its enforcement could also violate the Fair Housing Act. For example, if a physically or mentally disabled person requires a full-time care-taker to reside in the unit, and if residence of the caretaker brings the number of occupants in the unit above the maximum established by the association, then enforcement of the restriction may be deemed discriminatory.
In 1998 HUD released what is known as the Keating Memo, which established that “an occupancy policy of two persons in a bedroom, as a general rule, is reasonable under the Fair Housing Act”. Although HUD recognized that Congress did not intend to create a national occupancy code, it acknowledged that owners and managers “may develop and implement reasonable occupancy requirements based on factors such as the number and size of sleeping areas or bedrooms and the overall size of the dwelling unit”. Consistent with HUD and Section 3607 (b)(1) of the Fair Housing Act, “reasonable local, State, or Federal restrictions regarding the maximum number of occupants permitted to occupy a dwelling” may therefore be enforceable.
Validity of a numerical maximum will thus depend on whether it is “reasonable” – that is, intended to protect the health and safety of residents by preventing overcrowding. Absent explanation or background set forth in the governing documents, applicable municipal ordinances may be instructive. For a sample restriction, consider the 2003 International Property Maintenance Code, Section 404 of which provides as follows:
404.4.1 Area for sleeping purposes. Every bedroom occupied by one person shall contain at least 70 square feet (6.5 m2) of floor area, and every bedroom occupied by more than one persons shall contain at least 50 square feet (4.6 m2) of floor area for each occupant thereof…
Pursuant to the 2003 International Property Maintenance Code, maximum occupancy depends on bedroom size (square footage). Accordingly, as long as there are at least 50 square feet of bedroom floor area for each occupant, compliance is met. It may not be reasonable to limit occupants of any bedroom to one (1) person when bedroom size exceeds the minimum requirements set by the municipality. Depending on the number of bedrooms, the limitation may also fail to bear any relation to its purpose of preventing overcrowding. Other factors to be considered are the health, safety and the capacity of infrastructure (water, sewer, common facilities). However, if the number of occupants is of no discernible impact on other residents or infrastructure of the Association, one might be hard-pressed to find a reasonable (health and safety or other) basis for the restriction. Absent such justification, the restriction may be invalid.
Clearly, the implementation and enforcement of maximum occupancy limitations should proceed with extreme caution. In light of the many pitfalls and liabilities, as well as the existence of overlapping regulatory processes, associations may wish to rely on municipal ordinances and prosecution. Document amendment to remove unreasonable or outdated restrictions, should also be considered.