Tennessee HOA pays $156,000 to settle disability-discrimination lawsuit

Another stellar example of homeowners' associations at work

A homeowner's association in Franklin, Tennessee has agreed to pay $156,000 to settle a lawsuit brought by a family who said the HOA unfairly barred them from building a therapeutic sunroom where their two children, both of whom have Down syndrome, could play and receive in-home physical therapy.

To put it another way: The 168 Franklin homeowners living under the aegis of the Chestnut Bend Homeowners Association should budget for an increase in their HOA dues, because the settlement costs which their HOA board paid on their behalf (without admitting to any actual wrongdoing) average out to $928.58 per household.

The Tennessean reported today that former Chestnut Bend residents Charles and Melanie Hollis filed a federal lawsuit in 2012 alleging that, when the Hollises wanted to build a therapeutic sunroom onto their house, “the Chestnut Bend Homeowners Association denied their request to construct it based on concerns about the way the addition would look.”

The family first requested permission to build the sunroom in 2011, according to the lawsuit. Over the next year, the family went back and forth with the HOA's architectural review committee, which quibbled over the planned materials and design.

"Summarily denied"

“Each time additional information was requested ... the Hollises complied with the request,” said the lawsuit. And “each time their plans were rejected and their application summarily denied.” Eventually, in order to give their children the in-home care they required, the Hollises had to sell their house at a loss and move out of Chestnut Bend altogether.

The Chestnut Bend HOA website says that “this 168 home [sic] community shares a variety of lifestyles from active seniors to families with young children to singles and professional couples. … Chestnut Bend strives to include all residents while building a strong sense of community and stellar example of fantastic Franklin family life!”

But the Hollises' lawsuit says that Chestnut Bend's refusal to let them build a sunroom discriminated against their family and also constituted a violation of the Fair Housing Act, which among other things makes it illegal for agencies to refuse “reasonable modifications” enabling disabled residents to live comfortably within their own homes.

To be fair, such attitudes are not unique to Chestnut Bend's HOA. In late 2013, for example, an HOA in Las Vegas lost its long legal battle to prevent a family with a disabled son from keeping an ambulance parked in its driveway (the family used it to transport him to medical appointments). The U.S. Department of Housing and Urban Development (HUD) ruled that the Harbor Cove Homeowners Association violated fair housing and disability-discrimination laws, and had to pay the family $65,000. 

And just last March, an HOA in Raleigh, North Carolina agreed to pay $20,000 to settle allegations that it discriminated against a disabled resident over the resident's wheelchair ramp.

Homeowners on the hook

In all such cases, remember that “the HOA agreed to pay” actually means “the residents of the HOA are on the hook for” however much money was needed to settle the lawsuit (harassing disabled people in apparent violation of state and federal law is not cheap, whether you admit to wrongdoing or not).

And the Chestnut Bend HOA is not admitting to any wrongdoing despite the $156,000 payout. As the Tennessean reports:

The homeowners association and the property management company that works with the subdivision's board have denied wrongdoing. And the settlement is not an admission that the Hollises' claims of discrimination were founded.

However, as part of a deal that dropped Westwood Property Management from the lawsuit, the company agreed to provide its employees with fair housing training and develop a written fair housing policy to help guide its future homeowners association clients.

Mike Vaughn, current president of the Chestnut Bend HOA board, told the Tennessean that he stands by the HOA board's decision-making process. “We have architectural standards that everybody in the neighborhood has to follow …. We followed the rules.” But he also said that the Hollises' lawsuit and allegations of discriminatory practices harmed the other residents of the Chestnut Bend HOA.

“We took it personally because we're a welcoming neighborhood,” he said.

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