HOAs and Group Homes: The Challenge of Developing a Fair and Compliant Policy
Under the right conditions, group living can be of great benefit to people managing difficult situations. Whether housing elderly or disabled persons in need of long-term care, recovering addicts seeking treatment and emotional support, or partially released offenders reintegrating into society, group homes can offer much-needed support to individuals who might not be ready or able to live alone.
Unfortunately, though, group homes sometimes come with downsides for the residents of the surrounding neighborhood. If numerous adults live in the same facility, the additional traffic and parking requirements might be more than a residential area can handle. If the group home’s residents are struggling to overcome addiction, a relapse into substance abuse could result in a dangerous environment. Or, more generally, people in transitional housing might not have the same interest in keeping the development tidy, well-maintained, and peaceful as homeowners with a long-term commitment to the neighborhood.
With these kinds of potential drawbacks in mind, some homeowners’ associations have attempted to restrict or even prohibit group homes. Many such HOAs have learned the hard way that federal law provides powerful protections to certain group homes. That’s not to say HOAs are powerless, though – they just need to make sure that adoption and enforcement of restrictive covenants occurs in a legally compliant manner.
What are Group Homes, Sober Homes, and Halfway Houses?
Generally speaking, a group home is a residence shared by multiple unrelated persons with common needs. Group homes are frequently – though not necessarily – transitional; meaning that the residents only intend to stay there for a limited time. A group home can be commercial (i.e., charge fees for treatment and rent with intent of making a profit), or it can be run by a non-profit organization or charitable institution at little or no charge to the residents.
Importantly, there are different categories of group homes, and the laws protecting each home depend in large part on what kind of home is involved.
A “sober home” or “rehab home” is a residence where recovering alcoholics and addicts can live together and support one another under the supervision of counselors. Some sober homes provide medical and psychological treatment to residents, while some only provide emotional support and informal counseling. Due to the expanded use of sober homes of late, they are increasingly the subject of homeowner complaints.
A “halfway house” is a group residence shared by recently or partially released former inmates. The goal is to help offenders develop productive, healthy life-habits under supervision before fully reintegrating into society. Usually, living in a halfway house is a condition of a resident’s probation or early release, and residents are commonly required to be physically present at the house during certain hours if not at work. In most cases, halfway houses prohibit drug or alcohol use on the premises, but the residents are not necessarily in recovery.
Group homes can also be assisted-living facilities for seniors or disabled persons with mental or physical conditions requiring regular supervision or care. When multiple residents are in need of similar treatment, group living can be an efficient means of sharing expenses and resources, while also providing residents with invaluable companionship among sympathetic peers. An assisted-living facility for elderly residents struggling with dementia, for instance, allows residents access to continual care and regular inter-personal interaction, usually at a lower cost than hiring a full-time live-in nurse.
Can Group Homes be Located within HOA Communities?
Sober homes and other group homes undeniably provide valuable services when well-run under the right circumstances. But not every community is an ideal or appropriate location for a group home. However, although restrictive covenants provide communities with a powerful tool for preserving the quality of life in a neighborhood, the restrictions they can place on group homes are somewhat limited.
The starting point in American property law is that a landowner can use his or her property however he or she sees fit, unless the use is illegal or detrimental to the property rights of other people. As a result, the owner of a lot within an HOA can use the lot as a group home unless a law, ordinance, or covenant prohibits the use.
Zoning ordinances and HOA covenants often disallow commercial uses of properties in residential areas. A group home that accepts payments for services provided at the home is almost certainly engaging in commercial activity. But, although the plain language of an ordinance or covenant might appear to prohibit such a group home, federal law forbids state and local governments or HOAs from impeding certain protected uses (more on that later).
Likewise, HOA covenants often only allow lots to be used as single-family residences – or limit the number of unrelated persons who can live in any one home - either of which would seem to prohibit group homes. But, again, these provisions may be unenforceable against certain group homes due to federal legislation preventing discrimination in housing and public accommodation based on certain protected statuses.
So, the short answer is that, yes, group homes can be located within HOA communities. An association wishing to curtail group homes can adopt restrictive covenants to that end. But, in many cases, federal law will prevent enforcement of those covenants.
What Federal Laws Protect Sober Homes and other Group Homes?
The Fair Housing Act (“FHA”) was enacted by Congress in 1968 in response to pervasive racial discrimination in the leasing and sale of housing. The statute prohibits housing discrimination based on certain “protected classes,” including race, religion, national origin, and sex. In 1988, Congress expanded the FHA to include disabled persons within the law’s protections. Consequently, just as an HOA cannot enforce a covenant prohibiting the sale of lots to people of a certain race, it cannot prohibit sales to disabled individuals.
The FHA’s protections go beyond just buying and selling. An HOA cannot maintain any policy which prevents a disabled person from fully enjoying the use of a property based upon a disability, with “disability” defined as a “physical or mental impairment that substantially limits one or more major life activities…” 42 U.S.C. §12102. A covenant against the use of a property within an association as a home for disabled persons therefore violates the FHA and is unenforceable.
Using a similar definition of “disability,” the Americans with Disabilities Act (“ADA”) prohibits discrimination against disabled persons in multiple arenas, including public accommodations and access to state and local government services. A covenant that impedes the usage by a disabled person of facilities open to the public or public government programs likely runs afoul of the ADA.
Courts examining the protections of the FHA and ADA have favored a broad interpretation allowing greater protection. In Rhodes vs. Palmetto Pathway Homes, Inc., 400 S.E.2d 484 (S.C. 1990), decided shortly after the FHA’s expansion, a homeowner in a residential-use-only community sought to enjoin operation of a group home for adults with mental disabilities. The South Carolina Supreme Court held that enforcement of the covenant would violate the FHA by discriminating against disabled residents based upon their disability. Similarly, in Deep East Texas Regional Mental Health and Mental Retardation Services vs. Kinnear, 877 S.W.2d 550 (Tex. App. 1994), the Texas Appeals Court held that preventing operation of a group home for disabled adults within an HOA community with group-living restrictions violated the FHA.
Courts have made clear that assisted-living facilities serving residents with physical or mental impairments are undoubtedly protected by the FHA. Sober homes, though, serve residents overcoming substance-abuse problems, rather than what might have historically been thought of as a physical impairment. Even so, both the Department of Justice and federal courts have concluded that individuals in recovery are under the FHA’s protection.
Alcoholism and Drug Addition as ‘Impairments’ under the FHA and ADA.
Congress mandated that the class of “disabled” persons protected by the FHA and ADA “be construed…in favor of broad coverage of individuals.” 42 U.S.C. 12102(4)(1)(A). Along with immediate physical and mental impairments, coverage extends to individuals “with a record of such an impairment, or being regarded as having such an impairment.” 42 U.S.C. 12102(1)(b) and (c).
Consistent with Congress’s instructions, federal courts and the DOJ have consistently found that both “alcoholism” and “drug addiction” can qualify as a “physical or mental impairment.” See 24 C.F.R. §100.201(a)(2). Importantly, though, protection does not extend to any impairment resulting from “current, illegal use of a controlled substance.” Id; see also 42 U.S.C. § 12111(8). Instead, the ADA contemplates protection of “an individual who . . . has successfully completed a supervised drug rehabilitation program and is no longer engaging in the illegal use of drugs, or has otherwise been rehabilitated successfully and is no longer engaging in such use." Buckley v. Consol. Edison Co., 155 F.3d 150, 154 (2d Cir. 1998), citing 42 U.S.C §12114(b)(1).
That is, a covenant that adversely affects persons currently abusing alcohol or illegal drugs can be acceptable, but a covenant discriminating against former users in recovery is probably unenforceable. So, an association’s outright prohibition against sober homes within a community almost certainly violates the FHA; whereas, a restrictive covenant disallowing drug use and limiting alcohol consumption is more likely to pass muster.
The California legislature went one step further, expressly declaring sober homes serving six or fewer residents as “a residential use of property and a use of property by a single family, notwithstanding any disclaimers to the contrary.” Cal. H&S Code § 11834.25. Thus, in California, a residential-use restriction can’t be enforced against many sober homes even if the FHA would be otherwise inapplicable.
Reasonable Accommodations for Sober Homes and Other Group Homes.
In addition to forbidding disability-based discrimination, the FHA and ADA affirmatively require “reasonable accommodations” when necessary to allow a disabled person the full use and enjoyment of housing or public facilities. According to the Departments of Justice and Housing & Urban Development, a reasonable accommodation is a “change, exception, or adjustment to a rule, policy, practice, or service that may be necessary for a person with a disability to have an equal opportunity to use and enjoy a dwelling, including public and common use spaces.” See Joint Statement of HUD and Dept. of Justice Reasonable Accommodations under the Fair Housing Act (2004).
Reasonable accommodations may be required for rules that overtly discriminate against or disproportionately harm a protected class. In practical terms, this means that, if an association has a covenant or rule which effectively hinders a disabled person’s access to housing due to the disability, the HOA has a duty to permit an exception or modification of the rule.
Courts have recognized two basic types of discrimination claims: disparate treatment and disparate impact. In disparate treatment cases, the policy at issue explicitly discriminates against a protected class. A claim arising from an association’s covenant banning any “place for the care or treatment of the sick or disabled, physically or mentally” would be a disparate treatment case because the covenant expressly discriminates based on disability. See Westwood Homeowners Association vs. Tenhoff, 155 Ariz. 229, 745 P.2d 976 (Ariz. App. 1987). In disparate treatment cases, the reasonable accommodation required is usually non-enforcement or repeal of the covenant.
Disparate impact cases involve “facially neutral” policies that have a disproportionately adverse impact on a protected class. For instance, a single-family only covenant does not, on its face, discriminate against disabled persons, but, if enforcement of the policy prevents a group home for AIDS patients from operating within the HOA, the policy has a disparate impact requiring reasonable accommodation. See Hill vs. Community of Damien of Molokai, 911 P.2d 861 (N.M. 1996). Likewise, a prohibition against any commercial use of homes within an HOA does not expressly single out disabled persons for adverse treatment, but, if its ultimate effect is to prohibit a group home providing residential care to disabled elderly persons, the covenant violates the FHA due to its disparate impact. See Broadmoor San Clemente Homeowners Ass'n. vs. Nelson, 30 Cal. Rptr. 2d 316 (Cal.App. 1982).
In disparate impact cases, the duty to make “reasonable accommodations” generally involves allowing an exception or modification to the policy. So, for example, the association in the Hill case could probably retain its single-family covenant, but it would need to allow an exception in situations involving group homes serving disabled individuals.
HOA Prohibitions, Restriction, and Requirements for Sober Homes.
As we have seen, it is not possible for an association to enforce an outright ban on group homes generally due to the protections of disabled persons provided by the ADA and FHA. This is true whether the restriction comes in the form of a covenant preventing use of a residence as a sober home or a deed restriction forbidding existing compliant homeowners from selling to buyers who intend to operate a group home serving disabled persons. See, United States vs. Scott, 788 F. Supp. 1555 (D. Kan. 1992) (association’s suit to block sale of home to group-home operator based on deed restriction violated FHA); United States vs. Wagner, 940 F.Supp. 972 (N.D.Tex., 1996) (member’s suit to block sale to group home serving mentally disabled children based upon single-family restriction violated FHA).
However, it is important to note that not all group homes house disabled persons. Assuming no other protected class is involved, a single-family restriction would likely be enforceable against a group home acting as a hostel or temporary housing for workers. Along the same lines, criminal record status is not a protected class under the FHA, so a halfway house for offenders on probation or early release would seem to not be subject to the statute’s protections. However, a 2016 HUD Guidance Memorandum suggests that housing discrimination based on criminal record, though not historically considered as offensive to the FHA, may nonetheless violate the law due to a potentially disparate impact on racial groups with historically higher rates of incarceration. The HUD opinion is not controlling authority, but such opinions are frequently viewed as persuasive by reviewing courts.
The laws of individual states may also provide additional housing protections based upon other classes, so an association should consult with an attorney licensed in the state in which the community is located before enacting or enforcing covenants and restrictions.
Significantly, a group home is not immune from association covenants that do not relate to any protected status. Although a group home for the disabled or a sober home may be exempt from an association’s prohibition on commercial uses, it would still need to comply with covenants and restrictions unrelated to residents’ disabilities. In general, traffic and parking requirements, smoking restrictions, prohibitions against excessive noise, unsightly conditions, and other nuisances; and maintenance and landscaping requirements are all potentially enforceable against group homes – so long as the group home is not being singled out for stricter treatment.
Addressing Homeowner Complaints about Sober Homes or their Occupants.
An association has the same rights with regard to enforcement of non-disability related covenants against sober homes and their residents as against any other homeowner. Warning letters, fines, limitation of voting rights, and lawsuits for specific performance are all possible remedies for covenant violations that do not stem from residents’ disabilities. As noted above, current drug and alcohol use is not a protected disability, so a restriction against unlawful conduct generally or drug use specifically is not preempted by the FHA or ADA. Of course, whenever criminal activity is involved, homeowners should be instructed to report the conduct to local law enforcement. In addition to active drug use, there have also been instances of sober homes linked to Medicare and health insurance fraud.
Associations may also be able to mitigate adverse effects of a sober home by enacting restrictions that curtail troublesome activities without regard to disabilities. For instance, if smoking, littering, or noise emanating from a sober home becomes a nuisance to neighbors, the HOA could vote to amend its covenants to address those issues without singling out group homes.
Licensing Requirements for Group Homes.
An oft-repeated concern about sober homes is the lack of federal regulations mandating training, certification, or background checks for sober home operators. If operating commercially, group homes still need all appropriate business licenses, and group homes providing healthcare services are subject to all requirements relating to the services they offer. But sober homes specifically are not regulated at the federal level.
State and local governments have been somewhat reluctant to impose their own regulations due to federal limitations on licensing relating to disabilities. Specifically, state and local governments cannot establish any licensing requirements with the net effect of discriminating against the disabled or otherwise exclude or deny public service benefits based upon disability. 35 C.F.R. §35.130(6), 35 C.F.R. §35.130(4)(I). Thus, any state or local requirement that ultimately results in a restriction of accommodations available to disabled persons potentially violates federal law.
A few states – notably California and Florida – have enacted some limited laws affecting sober homes. In California, a sober home that provides healthcare related services to residents, such as chemical dependency treatment or behavioral therapy, must obtain a license from the California Department of Alcohol and Drug Programs. However, an ADP license is not required if the sober home simply provides a drug and alcohol-free living environment but not any covered services.
Florida has adopted a program of voluntary certification of “Certified Recovery Residences” and “Certified Administrators” thereof. Certification, which is managed by the Department of Children and Families, requires a background check, continuing education, and compliance with an ethics code. Fla. Stat. §397.487 and 4871. Because it is voluntary, certification is not necessary to operate a sober home. However, licensed substance-abuse treatment providers are not permitted to refer patients to sober homes that have not undergone voluntary certification or are not run by a certified administrator. Fla. Stat. §397.407(11).
Group homes present a multifaceted challenge for homeowners’ associations. On one hand, the homes provide a valuable service to many people in need of non-traditional living arrangements due to medical issues or age, chemical dependency, or prior incarceration. On the other, the homes can lead to problems in a neighborhood ranging from parking and traffic congestion to noise and insufficient upkeep. Due to powerful protections afforded by federal law, an outright ban on all group homes is not an option. However, through creative planning and the assistance of experienced counsel, an association can develop a strategy that minimizes the problems associated with group homes while respecting the relevant legal rights of all parties involved.