Disability Modifications: Who Foots the Bill?

Firm clients have endless Fair Housing issues.  These issues arise in a variety of contexts.  Sometimes clients contact us to answer Fair Housing questions or to advise them on how to properly handle a Fair Housing situation.  Unfortunately, too many Fair Housing issues arise when clients engage the Firm to defend them against discrimination complaints filed with the Colorado Civil Rights Division or HUD.  Because we are dedicated to educating our clients and the property management industry on Fair Housing issues, we continually write about our Fair Housing experiences. Fair Housing issues involving disabled residents continue to rise. Frequently, Fair Housing questions involve reasonable modifications.  Specifically, assuming that a resident is entitled to a reasonable modification, and the resident is both disabled and needs the modification, who has to pay for the modification?  Does the resident have to pay?  Or do you have to pay?

Prior to discussing payment responsibility, you should be aware of the differences between “reasonable modifications” and “reasonable accommodations.”  When disabled residents ask for modifications, they are asking for something different than an accommodation.  A reasonable accommodation request occurs when a disabled resident asks for an exception to one of your policies, practices, rules, or procedures (e.g. a lease provision).  A reasonable modification occurs when a disabled resident asks for a physical change to the property that will allow the resident to equally enjoy the property on the same basis as non-disabled residents.  The distinction between modification and accommodation requests is an important one because it determines who has to bear the financial costs associated with the request.

Under federal and state Fair Housing laws, housing providers are expected to shoulder some costs associated with accommodation requests.  The costs must be reasonable.  Reasonableness is determined on a case-by-case basis.  Generally, costs cannot cause an undue financial burden.  Additionally, as a general rule, you do not have to incur costs in association with accommodation requests if the costs would be incurred as a result of fundamentally altering the services that the property normally provides.  Accommodation cost-related issues can be very complex.  For this reason, we will address them in much greater detail in a future article.

Who has to pay for physical modifications is generally much more straightforward.  If a property receives no federal funds, then the Fair Housing Act applies.  Under the Fair Housing Act, the housing provider can make the resident pay for the modification.  If however, the property receives some sort of federal funding, then the Rehabilitation Act of 1973 applies.  What is known as Section 504 of this federal law and the accompanying federal regulations state that housing providers must pay for the cost of modifications if they are the recipients of federal assistance.  Most housing providers who receive some sort of federal funding are aware that they may have to pay for modifications when it is reasonable to do so.

Client questions about payment for modifications frequently involve the Section 8 program.  If you have Section 8 residents, does that make you a recipient of federal funds and, thus, obligated you to pay for modifications for disabled residents?  A Section 8 resident has qualified for federal housing assistance and receives a “housing voucher.”  These vouchers are a form of documentation that prove that the individual receives housing assistance through housing authority programs.  Many properties do accept applicants with Section 8 vouchers.  Under the federal regulations governing the Section 8 program, if you do accept Section 8 residents, this does not mean that you are a “recipient of federal assistance.”  The Section 8 regulations specifically provide that “an entity or person receiving housing assistance payments from a recipient on behalf of eligible families under a housing assistance payments program or a voucher program is not a recipient or sub-recipient merely by virtue of receipt of such payments.”  24 C.F.R. §8.24.

If a housing provider is a recipient of federal assistance and has to pay for a reasonable modification, then there is always an issue as to whether it is reasonable for the provider to do so.  This issue usually comes down to the actual cost of the modification and the financial resources of the housing provider.  Whether the expense of a modification is reasonable depends on many factors, such as the revenue that the housing provider generates, its annual budget, and whether the modification would violate some local ordinance or endanger others.  Because these issues can be involved, we recommend that Firm clients discuss these issues with us.

Fair Housing advocates are constantly developing new legal tactics.  We have recently encountered the “it’s not a request for a modification, but rather a request for a reasonable accommodation” argument.  Some disability advocates have recently tried to argue that modification requests are actually accommodation requests. If a request is not a modification request, but rather an accommodation request, then you have to pay the cost. Disability advocates make this effort to shift the cost burden from the resident to you.  When we confronted attorneys and disability advocates on this argument, they were not able to provide any legal justification for this argument.  Any request for physical alterations (hammer and nails items) is a request for a reasonable modification.  You do not have to pay the cost for a modification request simply because someone has labeled it as a request for a “reasonable accommodation.”

Finally, while not required to pay for reasonable modifications, many Firm clients pay for minor modifications.  Management pays for modifications for various reasons, including convenience and to promote resident goodwill.  Typical examples of modifications frequently paid for by property managers include the installation of grab bars, doorknobs, and doorbells.  Make sure that all employees are aware your policy.  Consistency is essential in Fair Housing.  If your policy is to pay for minor modifications and you have done so in the past, an employee should not tell a disabled resident that they have to pay for a modification covered by your policy.

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