HUD Sets One-Year Limit on Fair Housing Construction Violations

The U.S. Department of Housing and Urban Development (HUD) has implemented a new policy establishing a one-year statute of limitations for complaints alleging violations of the Fair Housing Act related to the construction of housing. This updated guidance, which replaces a 2013 policy, aims to provide greater clarity and predictability for developers, builders, and housing providers regarding potential liabilities. The Fair Housing Act prohibits discrimination in the sale, rental, or financing of dwellings based on race, color, religion, sex, familial status, national origin, or disability. Violations can occur if housing is designed or constructed in a way that discriminates against individuals with disabilities, for example, by failing to incorporate accessible features required by the Act.

Under the new policy, HUD will generally consider a complaint alleging a construction-related violation of the Fair Housing Act to be untimely if it is filed more than one year after the complainant knew or reasonably should have known of the alleged discriminatory construction. This timeframe is intended to balance the need to protect individuals from housing discrimination with the practical realities of construction projects, which can span multiple years and involve numerous parties. Previously, the lack of a clearly defined statute of limitations for such cases could leave developers and owners facing potential claims for an indefinite period after construction was completed, creating uncertainty in the market.

The one-year period begins when the complainant has sufficient information to understand that a discriminatory construction violation may have occurred. This could be upon moving into the property, attempting to use an inaccessible feature, or receiving information from a third party. HUD's enforcement actions under the Fair Housing Act can include investigations, conciliation attempts, and, if necessary, charges of discrimination that can lead to administrative hearings or federal lawsuits. Remedies for violations can include compensatory damages, injunctive relief, and civil penalties.

This policy update is expected to streamline the complaint process and reduce the burden on both individuals seeking redress and the housing industry. By setting a defined period for reporting construction-related fair housing issues, HUD seeks to encourage timely reporting of potential discrimination while allowing for the completion of construction projects without the perpetual threat of litigation. The department emphasizes that this one-year limit applies specifically to construction-related violations and does not alter the statute of limitations for other types of fair housing discrimination claims, which may have different timeframes depending on the specific circumstances and applicable laws.

The guidance also underscores HUD's commitment to enforcing the Fair Housing Act and ensuring that all individuals have equal access to housing. While providing a clearer timeline, the department maintains its authority to investigate and address systemic discrimination and patterns of non-compliance. Developers and builders are advised to familiarize themselves with the Fair Housing Act's accessibility requirements, such as those outlined in the Fair Housing Act Design Manual, to ensure their projects comply and to avoid potential violations and the associated legal ramifications.