Can Condos Ban Children? Federal Court Says No Under Fair Housing Act

Can Condos Ban Children? Federal Court Says No Under Fair Housing Act

Community associations play an integral role in the community. However, community associations that attempt to enact “no children” policies likely run afoul of federal law. That was the case in Simovits v. Chanticleer Condominium Association, 933 F. Supp. 1394 (N.D. Ill. 1996), where the U.S. District Court for the Northern District of Illinois held that a “no children” occupancy rule violated the Fair Housing Act. The court’s decision underscores the importance of carefully vetting restrictions that affect familial status. This article will discuss the case, the court’s analysis and ruling, and provide practical recommendations for Illinois community associations to ensure compliance with the Fair Housing Act.

Background

In 1993, Stephen and Kathleen Simovits purchased a condominium in the Chanticleer Condominium Complex in Hinsdale, Illinois. The Association’s declaration contained a covenant prohibiting children under 18 from residing in any unit purchased after the amendment’s effective date—unless approved by the board. This restriction effectively barred sales to families with minor children. The Association’s attorney advised the president of the Association that discriminating against families with children is illegal, and the financial liability to the Association resulting from such a rule could be substantial. Despite these warnings, the Association decided to continue to implement the restriction.

Despite acknowledging the rule and signing an agreement to abide by it, the Simovits challenged its legality after experiencing difficulty selling their unit. Two prospective buyers with children declined to proceed after learning of the restriction. The Simovits ultimately sold the unit at a reduced price to a childless couple, but only after receiving a waiver of the restriction from the board. They filed suit against the Association alleging violation of the Fair Housing Act.

Court’s Decision

The court held that the Association violated the Fair Housing Act’s prohibition on discrimination based on familial status under 42 U.S.C. § 3604. Although the Fair Housing Act provides a narrow exemption for housing intended and operated for occupancy by persons 55 or older, the court held that the Association failed to meet the statutory criteria.

Under 42 U.S.C. Section 3607(b)(2)(C), the following are requirements to qualify as “age 55 years and older housing”: (1) at least 80% of the occupied units are occupied by at least one person who is 55 years of age or older; (2) the housing facility publishes and adheres to policies and procedures that demonstrate the intent to provide housing for persons age 55 or older; and (3) the housing facility complies with HUD rules and regulations for verification of occupancy.

The court found that (i) the Association failed to provide reliable evidence that 80% of the occupied dwellings had at least one person 55 years or older; (ii) the Association freely admitted that it did not publish nor adhere to the policies and procedures that demonstrate an intent to provide housing for persons aged 55 years or older and (iii) the Association did not comply with HUD rules for verification and occupancy. Accordingly, the court held that the Association conceded its liability under the Fair Housing Act.

Key Takeaways for Illinois Community Associations

This case offers several critical takeaways for associations, especially those interested in maintaining a community for older adults or enforcing age-related occupancy restrictions.

1. Do Not Impose Blanket “No Children” Policies

Any restriction that categorically prohibits children under 18 is presumptively unlawful under the Fair Housing Act unless the association qualifies under the “housing for older persons” exemption. If the Association wants to be eligible under this exemption, it must keep meticulous documentation setting forth the requisite information as discussed below. If an association’s documents contain restrictions on children and the association does not qualify under the “55 and Older” exemption, the association should consult with an attorney to review its governing documents. These provisions are often unenforceable, and an amendment may likely be necessary to remove the provision from the documents.

2. Understand and Comply with the “55 and Older” Exemption

For associations hoping to qualify under the “housing for older persons” exemption under 42 U.S.C. § 3607(b)(2), an association must:

• Demonstrate that at least 80% of the occupied units are occupied by at least one person who is 55 or older;
• Publish and adhere to policies that demonstrate an intent to operate as such;
• Engage in age verification procedures at least every two years.

Failure to satisfy these requirements will expose the association to significant liability, as in Simovits.

3. Listen to Legal Counsel and Be Proactive

One of the most significant facts in this case was that the Association’s attorney warned the board in writing that the restriction likely violated federal law. The board disregarded the advice and continued to enforce the covenant. This decision exposed the Association to compensatory damages and formed the basis for punitive damages. Associations should take legal advice seriously and reevaluate their governing documents regularly. In this case, the Association refused to modify the policy despite clear legal warnings, which led to increased exposure.

4. Train Boards on Fair Housing Compliance

Fair housing laws are complex, and most board members are volunteers without formal legal training. Community associations should regularly train board members on fair housing obligations, particularly if their community has age-related covenants or desires to maintain an older demographic.

Conclusion

Attempting to create or preserve an “adults-only” community without qualifying under the Fair Housing Act’s senior housing exemption can cost an association tens of thousands of dollars in damages, attorney fees, and reputational harm if the association fails to maintain the appropriate documentation. Furthermore, condominiums and homeowners associations in Illinois should take a proactive approach by reviewing their governing documents and consulting legal counsel before enforcing age-related restrictions. Doing so will help avoid costly litigation and ensure compliance with federal housing law.

If your community has questions about occupancy restrictions or compliance with the Fair Housing Act, contact the attorneys at Hirzel Law, PLC. We assist condominium and homeowners associations throughout Illinois in reviewing governing documents and providing guidance to ensure legal compliance.

 

Jeremy Fernando is an Associate Attorney at Hirzel Law, PLC., Mr. Fernando is licensed to practice law in the State of Illinois. He concentrates his practice on community association law, condominium law, homeowners association law, and real estate law. Mr. Fernando’s legal career includes serving in corporate practice where he represented insurance companies and institutional investors in U.S. and cross-border private placements of securities, including transactions in the Netherlands, England, Ireland, Australia, and Germany. Mr. Fernando earned his Juris Doctor from Marquette University Law School, where he graduated with honors and ranked in the top 15% of his class. He also served as an Associate Editor of the Marquette Law Review. Mr. Fernando is committed to providing effective legal representation to his clients and is passionate about helping communities navigate complex legal challenges. He may be reached at 312-552-7669 or jfernando@hirzellaw.com.