Owner May Be Liable for Third Party's Harassing Conduct

Facts: After 18 months of living at a site, a Section 8 African-American resident heard his next-door neighbor call him a racial slur. The resident was shocked and fearful, but didn’t respond. This was the start of a series of threatening encounters with his next-door neighbor. After one incident in which he was called a racial slur several times, the resident phoned 911, and a county hate crimes unit officer arrived and interviewed witnesses. The officer admonished the neighbor about the alleged racial epithets, and the resident filed a police report.

After a few more incidents, the resident notified the owner, by certified mail, of the neighbor’s racial threats and harassment. The letter provided details concerning the county police hate crimes unit’s investigation, including the names, badge numbers, and contact information of the relevant officers. The resident claimed the owner could have terminated the neighbor’s lease based on his conduct, yet the owner did not do so, nor did he take any actions or steps reasonably calculated to address the resident’s complaints of harassment.

Eventually, the police arrested the neighbor and charged the neighbor with, among other counts, aggravated harassment, a class A misdemeanor. Again, by certified mail the resident notified the owner of the resident’s arrest and his continued use of racial slurs. Again, according to the resident, the owner could have terminated the neighbor’s lease based on his conduct, yet he didn’t do so, nor did he take any actions or steps reasonably calculated to address the resident’s complaints of harassment.

The manager contacted the owner concerning the neighbor’s discriminatory conduct and was told by the owner not to get involved. Eventually, the neighbor pled guilty to harassment under state law and an order of protection was entered prohibiting the neighbor from having any contact with the resident.

The resident sued the owner for racially discriminatory conduct under the Fair Housing Act (FHA) and breach of contract under state law. The owner asked the court to dismiss the resident’s claims.

Ruling: A New York district court dismissed the FHA claim and allowed the resident to bring a breach of contract claim.

Reasoning: With regard to the FHA claim, the court found that the resident alleged no basis for imputing the neighbor’s harassing conduct to the owner or that the owner failed to intervene due to his own discriminatory disposition toward the resident. Generally, claims against owners under the FHA succeed only where the owners created the conditions of harassment, rather than was merely notified about it and failed to take corrective action.

However, under state real property law, the court noted that every resident lease contains an implied warranty of habitability. And the New York Court of Appeals has interpreted this law broadly, extending an owner’s liability to acts of third parties. The statutory warranty of habitability set forth in New York Real Property Law § 235-b protects against conditions that materially affect the health and safety of tenants or deficiencies that “in the eyes of a reasonable person . . . deprive the tenant of those essential functions which a residence is expected to provide.” The court concluded that the resident had adequately pled a breach of implied warranty of habitability against the owner, and the lawsuit was allowed to continue.

• Francis v. Kings Park Manor, Inc., March 2015