FHA Discrimination Actions May Cover Post-Purchase Conduct

BLOCH v. FRISCHHOLZ (November 13, 2009)

The Blochs have owned and occupied several units in the Shoreline Towers condominium building in Chicago for years. The Blochs are Jewish – each of them has, for years, displayed a mezuzah on the doorpost of his or her unit. In 2001, the Board of Managers of the Condo Association enacted a new rule that prohibited the placement of "objects of any sort" outside any unit in the building. For several years, enforcement of the rule was generally limited to the removal of clutter. In 2004, however, the Association begin to interpret the rule to include a mezuzah (as well as wreaths, crucifixes, political posters, etc.). Despite repeated appeals and attempts to educate the Board on the religious significance of a mezuzah, the practice continued. The Blochs filed suit, seeking relief under the Fair Housing Act (FHA) and 42 U.S.C . § 1982. The district court granted summary judgment to the defendants. A panel of the Seventh Circuit affirmed, with one dissent. The Blochs sought rehearing en banc.

In their opinion, Chief Judge Easterbrook and Judges Bauer, Posner, Kanne, Wood, Evans, Sykes and Tinder affirmed in part and reversed and remanded in part. The Blochs asserted three separate FHA theories -- the Court addressed each in turn. Under § 3604(a), it is unlawful to "refuse to sell or rent" or to "refuse to negotiate for the sale or rental" or to "otherwise make unavailable" a dwelling to a person because of religion. Referring to its decision in Halprin, the Court stated that the FHA is generally concerned with access to housing and does not support a claim of discrimination arising after a purchase. Although the Court thought the section might support a constructive eviction claim, it concluded that the Blochs could not maintain such a claim since they never vacated the premises. The Court affirmed with respect to § 3604(a). Section 3604(b) prohibits discrimination based on religion against any person in the terms or conditions of the sale or rental of a dwelling. The Court concluded that one of the terms and conditions of the Blochs' purchase of a condominium unit was their agreement to be governed by the Condo Association and its Board of Managers. Although § 3604(b) does not address isolated discriminatory conduct of neighbors, the Court concluded that it did prohibit the Association from discriminating against the Blochs in its enforcement of its rules. The Blocks could rely on § 3604(b) if they produced sufficient evidence of discrimination. Thirdly, the Court considered § 3617 of the FHA. That section makes it unlawful to "coerce, intimidate, threaten, or interfere" with any person's exercise or enjoyment of any right granted by other sections of the FHA. The Court concluded, effectively overruling part of Halprin, that the interference could occur post-purchase. Like their claim under § 3604(b), the Court concluded that the Blochs could pursue a claim under § 3617 if there were sufficient evidence of discriminatory intent. On the issue of discriminatory intent, the Court concluded that the combination of facts and inferences on the record was sufficient to allow a jury to conclude that the conduct of the Association was intentionally discriminatory toward the Blochs because of their religion.

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Comments (1) Read through and enter the discussion with the form at the end
Frank B - January 24, 2010 10:40 PM

Is it discriminatory for an FHA lender to refuse a lock request from a borrower before the day of closing? I have been observing a lender whose policy is to allow no borrower locks during their processing time. No borrowers with this lender can capture a competitive rate. Is HUD good with this? Borrowers may not have "equal access" to a competitive loan lock/rate with this lender! This smells of discrimination to me...Am I far off?

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