When you dream about your retirement, do your picture afternoons relaxing by the pool without getting splashed? Do you envision participating in gardening and poker clubs and fitness classes with similarly aged neighbors?
If so, a community for persons who are 55 years of age or older may be the perfect fit. In the local area and nationwide, “active senior” or “age-restricted” communities and other housing for persons who are 55 years of age or older have been growing at a significant rate.
But, how do these age-restricted communities exist given the housing discrimination laws that prohibit discrimination against families with children? Quite simply, they exist because Congress said so and carved out an exception to the federal Fair Housing Act in the form of the Housing for Older Persons Act of 1995 (HOPA). HOPA and the attendant federal regulations implementing the same expressly permits communities to include age-restrictions on residents within the community.
HOPA requires that to maintain status as housing for persons who are 55 years of age or older, a community must: 1) be able to show at least 80% of the units are occupied by at least one person 55 years of age or older; 2) publish and adhere to policies that demonstrate the intent to provide housing for persons 55 years or older; and 3) comply with the Department of Housing and Urban Development’s (HUD) regulatory requirements for age verification of residents. There are other permissible “age-restricted” communities (e.g., where all units are occupied by persons over 62 years of age), but we are focused on the more prevalent “over 55” communities.
The 80/20 Requirement
In terms of the occupancy ratio, the standard is pretty straightforward. In order to be eligible, at least 80% of the units must be occupied by a person 55 years or older. The community restrictive covenants can be MORE restrictive (e.g., requiring 90% or 100% of units be occupied by a resident over 55 years in age) but not less so. What the community does with the remaining 20% is up to the community but is NOT relevant to the community’s eligibility as housing for persons who are 55 years of age or older. An association’s goal should be to ensure that all units are in compliance. However, the 20% is a “safe harbor” in terms of maintaining a community’s status as a 55+ age-restricted community and it is meant to reflect the reality that due to deaths, incapacities, inheritance, etc., that some flexibility was needed to protect a community’s status as a 55+ age-restricted community.
Publish and Adhere to Policies Showing Intent
HUD, by regulation, has provided examples of “policies and procedures relevant to a determination of compliance” that associations could follow to help evidence the “intent” to be a legitimate 55+ age-restricted community. Among those policies are: 1) inclusion in the leases/restrictive covenants of the association of the over 55-language; 2) posting of signage that the community is “over-55 age-restricted community”; 3) distribution of over-55 restrictions and information to occupants; and 4) notification of local realtors. HUD states that some or all of these criteria could satisfy the “intent.”
In order to ensure that the intent to be a 55+ age-restricted community is clear, we suggest the following steps: 1) if there is currently no signage in the community consider adding “Over 55 Age Restricted Community” on common entrances or the community facilities; 2) prepare and include a short summary regarding the age-restricted nature of the community in any annual mailings (e.g., annual meeting materials) to residents; 3) if there are identifiable local realty firms that “farm” the association more than others, send a periodic notice to such local realty firms reminding them of the association’s over-55 requirements; and 4) ensure that any webpage for the community clearly discloses the fact that it is an age-restricted community.
HUD’s position is that verification need only be documented through reliable survey, census or affidavit or other documentation, which must be retained by the association. The association can use the following reliable documentation: driver’s license; birth certificate; passport; immigration card; military id; any other state, local, national or international official documents containing a birth date of comparable reliability; or a certification in a lease, application, affidavit or other document signed by any member of the household age 18 or older asserting that a least one person in the unit is 55 years or older. A self-certification is adequate.
Please note that the association must certify compliance with the age requirement at least once every two years. HUD indicates that associations should “develop” procedures for routinely determining occupancy of each unit. As a result, an association may want to adopt a stand-alone policy to help guide future board of directors and management on the procedures followed. Such a policy may also address how such records are kept/summarized.
What happens in the event that owners fail to respond to requests for verification? If owners fail to respond, the association may “consider the unit to be occupied by at least one person over 55 years” if it can reasonably satisfy itself of the occupants qualifying age by: 1) government records or documents, such as a local household census; 2) prior forms or applications; or 3) a statement from an individual who has personal knowledge of the age of the occupants. The individual’s statement must set forth the basis for such knowledge and be signed under the penalty of perjury.
While effort is required to maintain qualification as an age-restricted community (and there may even be state or other local issues to consider) such efforts are not crushing in terms of time or expense and certainly worth the effort given the alternative (i.e., not being able to qualify as an age-restricted community and being sued for housing discrimination).
By Peter S. Philbin, ESQ. and Kelly C. Zook, ESQ.
Peter is managing shareholder of Rees Broome, PC, and practices community association law in Maryland and Virginia. He heads the firm’s Bethesda office. Peter co-chairs the Maryland Legislative Action Committee.
Kelly Zook is counsel with the law firm Rees Broome, PC. Kelly represents community association clients, including homeowners associations and condominiums, located in Virginia. Her experience includes representation of associations in collections and other covenants enforcement efforts, as well as working with board of directors to handle the associations’ various general legal needs including contract negotiation and interpretation and amendment of governing documents.