Monday, December 3, 2018

Why Write About SSDI Benefits?

             Stay with me a few moments and I’ll answer that question.

             The Fair Housing Rights Center in Southeastern Pennsylvania received a complaint regarding the denial of a request for “reasonable accommodation” by an individual seeking residential housing. FHRC dispatched testers and checkers to three properties in the greater Philadelphia area to determine the validity of the complaint. Not satisfied with the results of the tests, FHRC filed a federal lawsuit against the professional management company – Morgan Properties.

             Morgan manages over 35,000 residential rental units in 130 communities in 10 States. As policy, Morgan refuses to adjust rental payment dates for tenants with disabilities who receive Social Security Disability Insurance – SSDI – later than the rent due date.

             The average monthly rent for a one-BR in a Philadelphia-area Morgan property is $1,200. Rent is due on the 1st. If rent is not paid by the 5th day of the month, a 10% late fee - $120 - is charged.

             More than 20 years ago the Social Security Administration changed the SSDI monthly payment dates from the 3rd day of the month to the second Wednesday, third Wednesday or fourth Wednesday of the month, depending on the birthdate of the recipient.

             Since the second Wednesday of any month can be no earlier than the 8th and may be as late as the 14th, all SSDI recipients in the last 20 years receive monthly checks at least three days past the due date for Morgan’s properties.

             SSDI benefits vary according to contributions the worker made during her / his working life. Two years ago the average SSDI check to a disabled worker was $1,166 per month. More than 10 million Americans receive SSDI benefits; many rely on it as their sole source of income.

             FHRC’s testers asked Morgan for an accommodation by adjusting the rent due date to coincide with the receipt of a Social Security payment, so that Social Security recipients could pay rental on time without monthly late fees. FHRC alleges that each tester was told that their refusal to grant the accommodation was due to Morgan’s company-wide policy.

             In 2016 FHRC sued Morgan to challenge its policy, claiming it discriminated against residents with disabilities by imposing financial hardships on them because of their disabilities and their need to receive Social Security benefits to pay rent.

             Morgan denies that it discriminates by requiring all tenants to pay rent by the 5th day of the month, or be liable for late fees (and possible court fees and eviction). Morgan further claims that FHRC’s challenge to Morgan’s rental policy is not a request for an accommodation based on SSDI recipients’ disabilities, but is rather a purely economic accommodation and would pose a significant monetary hardship on Morgan.

            Morgan also claims that such an accommodation would place an undue burden on them and is therefore not reasonable by definition.

             The Court hearing this matter has concluded that the financial circumstances of disabled tenants may be considered in determining the legal need for a HUD “reasonable accommodation.”

             Through this date, 79 documents have been filed in the lawsuit. More are coming. The Court has ordered a settlement conference which, if not delayed, will take place on December 10, 2018. If not resolved at mediation, this case could set new national precedent requiring residential Landlords to adjust their rent payment schedules to coincide with the receipt by tenants of governmental benefits.

             Key this case name into the search engine of your choice after December 10, 2018: Fair Housing Rights Center In Southeastern Pennsylvania v. Morgan Properties Management Company, LLC; US District Court, Eastern District of Pennsylvania, Eastern Division, Case 2:16-cv-04677-RBS; If you have own, finance, lease or manage residential properties, you will [should be!] keenly interested in this case.
            Lessons Learned / Questions Asked:

1.      Residential Landlords have mortgages and bills to pay that are due on the first day of the month. Landlords don’t have the ability to threaten their creditors with a lawsuit if the creditors fail to offer Landlords a “reasonable accommodation” merely because the tenants aren’t making payments between the 1st and 5th day of each month. If this case results in a new requirement that residential Landlords must adjust rental due dates to match the date that tenants receive governmental benefits, then there will be an economic cost to Landlords that will be passed on to all residential tenants including those same tenants who are requesting the accommodation.

2.      Even if this case is settled and we hear nothing further about it after December 10, the fact that it has been filed and that the Court seems receptive to the position asserted by the plaintiff means that other similar cases will also be filed.

3.      Yes Virginia, this is indeed my 100th blog article. Congratulations to me, and Happy Holidays to all my readers.
                                                                             Stuart A. Lautin, Esq.*

* Board Certified, Commercial (1989) and Residential (1988) Real Estate Law,
Texas Board of Legal Specialization

 Licensed in the States of Texas and New York

Higier Allen & Lautin, PC
2711 N. Haskell Avenue, Suite 2400
Dallas Texas 75204
P: 972.716.1888

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