YOUR COMMUNITY IS AGE-RESTRICTED

HOW TO KEEP IT THAT WAY

Federal and state fair housing laws prohibit discrimination against families with children. This should not be news to anyone.

But the federal Housing for Older Persons Act (HOPA), enacted in1995, allows “age-restricted” housing communities to bar anyone younger than 55.

HOPA allows two types of age-restricted communities. The most common requires 80 percent of the units to be occupied by at least one resident who is 55 or older. The remaining 20 percent may be occupied by residents younger than 55. This is known as the 80-20 rule. The other HOPA option, less common because it is more restrictive, requires a minimum age of at least 62 for all residents.

To retain their ‘age-restricted’ designation, communities must comply with the regulations established by HOPA and by related state laws, which either mirror its provisions or in some cases are more restrictive. I’m going to focus on the requirements for 55-and older communities and on the most common compliance questions related to them.

What happens if a senior housing community subject to the 80-20 rule doesn’t comply with it?

They could lose their exemption from the age-discrimination provisions of the Fair Housing laws. That means they could no longer bar persons under age 55 and would be subject to discrimination complaints if they did.

Falling out of compliance can produce a cascade of legal and financial problems. In addition to facing age-related discrimination claims from people under age 55 and families with children who are denied occupancy, communities might be sued by existing owners who purchased homes expecting the community to be age-restricted and who might claim that the loss of the designation has reduced their value. The litigation risks for associations and the costs potentially related to them are significant.

Please contact Richard Brooks or any of our MEEB Attorneys with any questions about lien enforcement and how to protect your association’s finances.

What happens if a resident who is over 55 dies, but his/her surviving spouse doesn’t meet the age requirement?

This is not uncommon and there are several ways to address the problem. Some communities adopt a “grandfather” provision, allowing the surviving spouse to remain for a specified period of after the older spouse has died. Some communities adopt “hardship” provisions to deal with other 80-20 rule problems – for example, grandparents who have to assume responsibility for their under-age grandchildren, or the resident who needs a full-time live-in caretaker who is younger than 55. Regulations issued by the Department of Housing and Urban Development (HUD) address the caretaker issue by specifying that caretakers don’t have to be counted as non-qualified residents under the federal law for purposes of meeting the 80-20 rule. However, some states and some cities and towns have adopted stricter rules that don’t provide that exemption, and age-restricted communities must comply with those requirements as well as with the federal law.

If the heirs who inherit an owner’s unit don’t meet the age requirement, must they sell it to someone 55 or older?

No. The age restrictions in HOPA communities target occupancy, not ownership. If the community doesn’t prohibit rentals, an heir or an unrelated investor younger than 55 could purchase a unit and rent it to tenants who meet the age requirements.

Can an over-55 community require that residents of all units – not just 80 percent of them – meet the age requirement and/or require that all occupants of each unit, not just one occupant, must meet the age requirement as well.

Communities can’t adopt rules less restrictive than those in the federal, state or local laws, but they can exceed them, if the governing documents include a more restrictive standard or if a required super majority of owners (usually two-thirds) approves an amendment imposing a more restrictive standard However, communities built under state or local programs encouraging senior housing might also need the permission of the agencies that approved the developments in order to change their occupancy rules.

Can an over-55 community voluntarily relinquish that designation?

Possibly, and there might be good reasons to do so – for example, to expand the pool of eligible buyers in a slow housing market. However, the change may require the approval not only of owners not all of whom will like the idea), but also of the local agencies that approved permits for the development. Many cities and towns welcomed age-restricted housing specifically because it satisfied a particular type of housing need or, by excluding children, did not increase demands on schools and other local resources. Local officials in these communities may be reluctant to open a door they thought they had closed.

Can associations limit visits by friends or relatives who don’t meet the age restrictions?

Generally, no, when it comes to daily visits or visits of short duration. However, associations can adopt rules limiting the extended stay of visitors younger than 55 when there is reason to suspect that it may be turning into a permanent residency. During short-term visits, associations must allow persons under age 55 to have equal access to amenities. So, for example, while you can prohibit children from living in the community, you can’t bar them from swimming with their grandparents in the community pool or prevent them from playing in common areas while they are visiting.

Are over 55 communities required to provide services or programs designed for older residents?

HUD’s HOPA rules don’t require any specific programs or services, but they do require age-restricted communities to demonstrate “an intent to create housing for older persons.” As a practical matter, providing age-appropriate programs and services is the best way to demonstrate that intent. Associations should also make sure that marketing materials for the community as well as its rules and governing documents all reflect its over-55 focus.

To ensure ongoing compliance with the age-restrictions in HOPA and other applicable state and local laws and ordinances, over-55 communities should periodically verify the identity and age of their occupants. HOPA specifically requires a census every two years, but an annual audit is probably the better practice, especially in communities that are close to the cap on under-age occupants. You typically aren’t required to proactively submit the census results to HUD or anyone else, but you must keep the information on file so you can document compliance with the rules if anyone challenges the community’s over-55 status, or if an agency with jurisdiction conducts a review to verify compliance.

In addition to verifying the age of residents, associations should make sure common areas are equipped with ramps, grab bars and other age-related safety features, both to limit liability risks and to comply with the Fair Housing Act provisions prohibiting discrimination against individuals with handicaps. Most multi-family housing developments are required to comply with these provisions but failing to do so would be embarrassing, to say the least, for communities created to serve older residents.

As a practical matter, providing age-appropriate programs and services is the best way to demonstrate that intent. Associations should also make sure that marketing materials for the community, as well as rules and governing documents, all reflect an over-55 focus.

To ensure ongoing compliance with the age-restrictions in HOPA and other applicable state and local laws and ordinances, over-55 communities should periodically verify the identity and age of their occupants. HOPA specifically requires a census every two years, but an annual audit is probably the better practice, especially in communities that are close to the cap on under-age occupants. You typically aren’t required to proactively submit the census results to HUD or anyone else, but you must keep the information on file so you can document compliance with the rules if anyone challenges the community’s over-55 status or if an agency with jurisdiction conducts a review relative to compliance.

In addition to verifying the age of residents, associations should make sure common areas are equipped with ramps, grab bars and other age-related safety features, both to limit liability risks and to comply with the Fair Housing Act provisions prohibiting discrimination against individuals with handicaps. Most multi-family housing developments are required to comply with the Fair Housing Act provisions even if the community is not a public place, but failing to do so would be embarrassing, to say the least, for communities created to serve older residents.

If you have any questions regarding your age-restricted community, please contact Gary Daddario or any MEEB Attorney.