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Excerpted From: Shelby D. Green, Keeping Current–Property, 33-OCT Probate and Property 18 (September/October 2019) (Full Document)


ShelbyDGreenCase - Fair Housing Act

FAIR HOUSING ACT: Unequal swimming times for men and women in community pool is discriminatory. Two-thirds of the condominium residents were Orthodox Jews. Following an Orthodox Jewish principle that prohibits men and women to see each other in a state of undress, the condominium association adopted rules that provided for segregated swimming times for men and women in the community pool. Two residents, fined by the association for violating the rules, brought an action to challenge the schedule of swimming times under the Fair Housing Act (FHA), 42 U.S.C. § 3604(b) and state anti-discrimination laws. The district court granted summary judgment to the association, ruling that there was no discrimination because the "gender-segregated schedule applies to men and women equally." The Third Circuit Court of Appeals reversed. The FHA applies because the plaintiffs alleged discrimination by limiting the "use of privileges, services, or facilities associated with a dwelling because of ... sex." 24 C.F.R. § 100.65(b)(4). The court went on to hold that whether sex-segregated swimming hours necessarily violated the FHA was beside the point because the schedule adopted was plainly unequal in its allotment of favorable swimming times. Women were allowed to swim only 3.5 hours after 5 p.m. on weeknights, compared to 16.5 hours for men. The schedule also assigned the entire period from 4 p.m. onward on Friday afternoon to men, apparently based on the idea that women would be at home preparing for the Sabbath. On the whole, the schedule left working women with regular hour jobs little access to the pool during the workweek. A concurring opinion would have found segregated swimming times to be per se discriminatory, absent a showing of any recognized exception to the FHA's anti-discriminatory provisions, such as a policy benefitting the affected class or responding to legitimate safety concerns. Curto v. A Country Place Condo. Ass'n, 921 F.3d 405 (3d Cir. 2019).


Case - Landlord-Tenant

LANDLORD-TENANT: Purported extension of three-year statute of limitations to 12 years is precluded by anti-waiver law. A one-page cover sheet set forth basic terms for a month-to-month residential lease and included signature lines followed by "(Seal)." In the attached lease covenants, a statute-of-limitations paragraph stated: "This lease is under seal and is subject to the twelve-year limitation period of [Md. Code Cts. & Jud. Proc. §] 5-102." Eight years later, the landlord filed a complaint against the tenant seeking $4,035.42 as unpaid rent and related costs, interest, and attorney's fees. The tenant defended by denying liability and by asserting that the landlord's action was barred by the general three-year period of limitations for civil actions. Md. Code Cts. & Jud. Proc. § 5-101. In response, the landlord asserted that the lease was a contract under seal and that the applicable period of limitations is therefore 12 years. The trial court rejected the tenant's limitations defense and entered judgment for the landlord in the amount requested. The court of appeals reversed, explaining that since colonial times and through numerous recodifications, the laws of the state require an action on a debt to be commenced within three years of accrual. The only exception to the rule is for "specialties" including contracts under seal. In an earlier decision, Tipton v. Partner's Mgt. Co., 773 A.2d 488 (Md. 2001), the court held that a lease agreement does not become a specialty contract merely because it has the word "seal" affixed to it. Although the court stated in dicta that the parties could agree in the body of the lease that it was subject to the 12-year limitation period, it left open the question whether such an agreement is repugnant to the statute prohibiting clauses by which a tenant waives or foregoes any right or remedy provided under law. In this vein, a statute of limitations is considered a right in that it confers the right to be free of litigation. Smith v. Wakefield, LP, 202 A.3d 1240 (Md. 2019).

LANDLORD-TENANT: Hearing officer's decisions in Section 8 housing disputes are not quasi-judicial for purpose of certiorari law. Gould paid her rent with the assistance of a Section 8 voucher. An annual inspection by the housing authority determined the residence failed to meet quality standards dictated by federal regulations. The authority then notified Gould that it would terminate vouchers to her landlord. Gould sought transfer of her voucher, but her landlord refused to issue a "zero balance letter" certifying she owed nothing for rent or damages. Later the authority notified Gould that her participation in the Section 8 program was terminated and that, pursuant to regulation, she had the opportunity for an informal hearing to contest the agency's decision. The hearing officer upheld the termination decision. Gould filed a petition for writ of certiorari seeking judicial review, but the superior court granted the authority's motion to dismiss the petition. The appellate court reversed in a split decision, with the majority finding the hearing officer's decision quasi-judicial and therefore within the certiorari jurisdiction of the superior court. On further appeal the supreme court noted that government exercise of quasi-judicial power is generally subject to review by writ, but not the exercise of only executive or administrative power. Although making the distinction is a difficult one, a quasi-judicial act is found where three factors are present: (1) all parties are as a matter of right entitled to notice and hearing with opportunity to present evidence; (2) there is a decisional process that is judicial in nature, involving ascertainment of relevant facts and application of preexisting legal standards; and (3) the decision is final, binding, and conclusive of the rights of the parties. Here, the hearing officer's decision failed the third element because the housing authority was not bound by it but had the ability to self-determine if legal error was present that warranted disregard of the decision, and there was no time limit for the authority to make its decision on whether it was bound by the hearing officer's findings. Hous. Auth. of City of Augusta v. Could, 826 S.E. 2d 107 (Ga. 2019).

LANDLORD-TENANT: Waiver of right to seek declaratory judgment does not offend public policy. Two commercial leases with 20-year terms covered 13,000 square feet of property in Brooklyn. The leases began from a standard form, but there were numerous handwritten additions and deletions, initialed by the parties. The leases also contained a 36-paragraph rider, in which "Tenant waive[d] its right to bring a declaratory judgment action with respect to any provision of this Lease or with respect to any notice sent pursuant to the provisions of this Lease ... [I]t is the intention of the parties hereto that their disputes be adjudicated via summary proceedings." When the landlord sent notices to tenant of default, threatening termination, the tenant sought a declaratory judgment that it was not in default. The landlord moved for summary judgment, invoking the waiver clause in the leases. The trial court ruled for the landlord, explaining that "absent some violation of law or transgression of strong public policy, the parties to a contract are basically free to make whatever agreement they wish, no matter how unwise it may appear to a third-party." The court noted that the waiver provision barred only the declaratory judgment action but otherwise did not preclude actions for damages for breach or tortious conduct nor deny other legal redress or defenses. The intermediate appellate court, with one justice dissenting, affirmed. The court of appeals, in a split decision, affirmed. It began by reciting the "familiar and eminently sensible" proposition that when parties set down their agreements in a clear complete document, their writing should be enforced according to its terms. This rule has special import in the context of real property transactions in which commercial certainty is a paramount concern. In the court's reading, the lease provision could not be clearer and reflected the parties' intent to preclude precisely the type of suit initiated. Moreover, the clause did not offend any public policy as identified in the constitution or legislation; indeed, quite the contrary. It furthered the "deeply-rooted" policy of freedom of contract, which serves to keep New York State as the preeminent commercial center of the country, if not the world. 159 MP Corp. v. Redbridge Bedford, LLC, 33 N.Y.3d 353 (2019).

LANDLORD-TENANT: Tenants need not follow procedures of rent escrow statute prior to asserting common-law habitability defense. A residential tenant complained of ongoing repair issues, including through correspondence, to the landlord. Five months after receiving notice of code violations from a city inspector, the landlord filed an eviction action for possession and rent. The tenant acknowledged withholding some rent and raised the common-law defense of breach of the covenant of habitability. A housing court referee found in the tenant's favor, and the landlord sought judicial review, claiming that the tenant was required to follow statutory procedures for rent escrow, including giving written notice to the landlord before asserting a habitability defense. Minn. Stat. § 504B.385. The lower courts rejected the claim. The supreme court affirmed. Noting that covenants of habitability are part of every residential lease in the state, as codified at Minn. Stat. § 504B. 161, longstanding precedent establishes a tenant's common-law right to assert a violation of the covenants as a defense to the obligation to pay rent in an eviction action. Beyond the common law, the legislature enacted the rent-escrow statute, allowing tenants to deposit rent with the court administrator in case of uninhabitable conditions. This statutory procedure does not abrogate the common-law habitability defense but is intended as an alternative remedy. As such, a tenant need not give written notice prior to raising the common-law habitability defense. Otherwise, landlords who choose not to make repairs could evict tenants who are withholding rent simply because the tenant never provided written notice. Moreover, the landlord failed to show any injury from what it called "trial by ambush" by the lack of formal notice. Ellis v. Doe, 924 N.W.2d 258 (Minn. 2019).

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