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Alarm is spreading among rental property owners over a proposal that would hold them liable if they failed to stop their tenants from harassing other tenants who are protected by anti-discrimination laws.

The Federal Department of Housing and Urban Development rule could be enacted as early as this fall.

What has landlords with multiunit properties worried is that they would be held responsible for failing to stop discrimination action by one tenant against another tenant in a protected class – even if the landlord didn't know the discrimination was occurring.

No need to panic, according to HUD. The rule is only a clarification of an existing policy. And since it doesn't call for any new duties on the part of landlords, HUD states, it “adds no additional costs to housing providers and others engaged in housing transactions.”

Under the Fair Housing Act, persons already are protected from discrimination based on race, color, national origin, religion, sex, disability or familial status. The clarification, according to HUD, is that they are protected from all discrimination they encounter in housing, not just direct discrimination by landlords and property managers.

 “...(I)n HUD’s experience, there is significant misunderstanding among public and private housing providers as to the circumstances under which they will be subject to liability under the Fair Housing Act for discriminatory housing practices undertaken by others,” the proposal explains.

  One of the things the rule clarifies is that prohibited actions aren't limited to a refusal to rent or sell a home to someone in a protected class. Discriminatory comments, gestures, signs or images toward protected persons are also prohibited.

“It may include the use of racial, religious or ethnic epithets, derogatory statements or expressions of a sexual nature, taunting or teasing related to a person’s disability, or threatening statements. In addition, the unwelcome conduct may be communicated to the targeted individual in direct and indirect ways. For example, the unwelcome conduct may involve the use of email, text messages, or social media,” the proposal states.

Most notable is the clarification stating that discriminatory actions by “non-agents” of the landlord, such as other tenants, are the landlord's responsibility. Landlords can reduce the potential for that by establishing anti-discrimination standards and making them clear to all tenants, HUD says.

“This should facilitate more effective training to avoid discriminatory harassment in housing and should decrease the need for protracted litigation to resolve disputed claims,” according to HUD.  

National housing associations have registered their concern, according to the Wall Street Journal, saying that HUD would be putting landlords in the middle of neighbor disagreements.

Landlords don't have the resources to monitor their tenants' potentially discriminatory actions, they said, and they worry that they could be held liable for harassment that occurs between tenants while they are away from the rental property.