Florida Condo & HOA Legal Blog : Florida Condo Lawyer & Attorney : Becker & Poliakoff Law Firm : Condominium & HOA Law Blog

Association leaders and managers must comply with federal and state anti-discrimination laws.  That's a given.

Association leaders and managers, therefore, cannot enforce certain policies and procedures when a resident (prospective resident or someone associated with a resident) is entitled to an accommodation due to disability.  Persons suffering from various medical, mental and emotional conditions can meet the statutory definition of disabled or handicapped and are therefore entitled to accommodations in association rules or policies, if that accommodation is necessary to provide the person with disabilities with the full opportunity to enjoy the dwelling.

With all that in mind, would you think a Board of Directors must accommodate a request for permission to use medically prescribed marijuana to treat cancer, debilitating back injuries, glaucoma or otherwise?  Community association documents typically prohibit any illegal use of the property, but does the board have to make an exception?

HUD says NO when it comes to public housing, public services, activities or programs.  A HUD memorandum issued in January of this year explains why public housing agencies, owners of federally assisted housing or owners/operators of facilities or services subject to the ADA would not have to allow the use of medical marijuana.   There are two primary reasons cited in the memo:

First -

Section 504 of the Rehabilitation Act (part of the Fair Housing Act) and Title II of the Americans with Disabilities Act (ADA) don't generally apply to Condos & HOAs.  Both of these laws exclude any illegal drug user (regardless of the reason) from protection.  The law says:

The term "individual with a disability" does not include an individual who is currently engaging in the illegal use of drugs...

Thus, someone who is disabled (i.e. blind, deaf, mobility impaired, etc.) will not be considered disabled within these statutes if there is illegal drug use.

Second -

Illegal drug use, by itself, will not eliminate protection for disabled persons under the FHA.  This law is very relevant for community associations and claims based on an association's failure to accommodate a disability are almost becoming commonplace.  HUD's general counsel takes the position that a request for permission to use medical marijuana is just not reasonable and therefore does not have to be granted.

An accommodation isn't reasonable if it:

1. requires a fundamental alteration in the nature of the housing or the provider's operations; or
2. imposes an undue financial and administrative burden on the housing provider.

The use of medical marijuana isn't legal in Florida and that's probably why I haven't encountered any requests for accommodations of this type.  However, several states across the country are allowing its use.  Therefore, community leaders should check with counsel before blindly rejecting any request along these lines.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

HUD Implements New Approval Process for Condominium Projects to Qualify for FHA Insured Mortgages.

Website Allows Users to Search for FHA Approved Projects.

On June 12th the Department of Housing and Urban Development (HUD) published Mortgagee Letter 2009-19 announcing the new process for approval of condominium projects.  As previously reported on this Blog, Fannie Mae, a federally backed lender, announced several changes to its standards, including the imposition of PERS review.

Lenders are now permitted to determine FHA project eligibility, review project documentation and certify compliance with HUD regulations in furtherance of the directives contained in the Housing and Economic Recovery Act of 2008 (HERA).   In order for a condominium project to be eligible for FHA insured mortgages:

• Hazard and Liability Insurance must be in place.  Flood insurance is also required where applicable.
• Any right of first refusal in the declaration of condominium or other governing document cannot violate prohibitions against discriminatory conduct under the Fair Housing Act regulation in 24 CFR 100.  Many projects have been rejected as a result of the provisions granting the Association the rights to "screen" and "approve" purchasers.
• Commercial use cannot consist of more than 25% of the floor area and commercial uses must be homogeneous with residential use.
• A single investor cannot own more than 10% of the units.
• The owners of no more than 15% of the units may fall into arrears (defined as more than thirty days past due in maintenance fees or assessments).
• At least 50% of the units must be sold, although pre-sales apply.
• At least 50% of the units must be owner-occupied or sold to owners that intend to occupy the units as a primary or secondary residence.

HUD provides resources for home-buyers to determine whether projects are FHA approved.  You may search by location, name or status.  The website also reveals which projects have been rejected by FHA or whether approval is currently pending.  Click here to search whether your condominium is FHA approved.

FHA loans are advantageous for purchasers as generally there is less money required for the down payment,  lower closing costs and lower interest rates than sub prime loans.  FHA loans are a good option for borrowers that cannot qualify for conventional financing, as other alternatives generally include large pre-payment penalties.  FHA limits have increased as a result of the stimulus package as well.

Condominium project approvals expire two (2) years after the initial approval and re-certification to determine whether the project remains in compliance with HUD guidelines is required for continued approval.  

Community associations may want to consult with counsel to determine whether it is worthwhile to take action to qualify for FHA and/or Fannie Mae approval, especially if recent sales have slowed.

• Email This
• Print
• Comments (3)
• Trackbacks
• Share Link