Landlord & Tenant Law

In an action by a prospective tenant who alleges that he was discriminated against in his effort to rent an apartment, the apartment owners appealed from Supreme Court’s denial of their motion to dismiss. The Appellate Division affirmed, holding that the owners could be held vicariously liable for the actions of their real estate agent.
Prospective tenant suffers from symptomatic HIV and is entitled to a New York City subsidy of $1,600 per month for an apartment. Prospective tenant alleges that he saw an apartment listing at $1,495 per month and, on Zillow website, asked if the listing accepted the subsidy vouchers. A real estate agent responded that to the best of her knowledge, the building was not approved to receive housing assistant vouchers. The agent did not further communicate with the prospective tenant, and tenant did not send any further correspondence. Prospective tenant then brought an action against both the agency and the owners of the apartment, who had listed the apartment with the agent. The owners moved to dismiss, but Supreme Court denied the motion, holding that the New York City Human Rights Law applied to owners through their agents, and did not require the owner to be an employer of the agent. The owners appealed.
In affirming, the Appellate Division relied on the Local Civil Rights Restoration Act of 2005, which provided that the city Human Right Law should be construed liberally, regardless of past construction of the act, and subsequent City Council legislation expanding anti-discrimination protections to source of income discrimination. The court noted that excusing owners from liability would allow landlords to evade liability under the act except when they directly interact with the prospective tenant.
Comment
Although neither the New York City Human Rights Law nor the state statute explicitly address vicarious liability, when the state statutes are silent, New York courts look to interpretations of the federal Fair Housing Act. In Hollandale Apartments & Health Club, LLC v. Bonesteel, 173 A.D.3d 55, the court, in awarding tenant judgment on its counterclaim for retaliation after filing a discrimination complaint, explained that when similar language is used in state and federal statutes which are intended to remedy the same types of discrimination, New York courts resolve state discrimination claims consistently with the application of federal statutes
The Supreme Court of the United States held that, under the FHA, a housing discrimination plaintiff must establish a traditional agency relationship to warrant vicarious liability. In Meyer v. Holley, 537 U.S. 280, 282 (2003), applying agency principles to liability under the FHA, the court held that the officer of a real estate corporation was not vicariously liable for the discriminatory acts of the corporation’s employee, because under traditional agency principles only the corporate employer, not individual officers, would be vicariously liable for the employee’s torts.. Plaintiffs, prospective buyers, had been prevented from obtaining a property for discriminatory reasons and brought a claim against the officer of the real estate corporation that listed the sale as well as the real estate agent who directly discriminated against them
Although the mere act of hiring a broker is not enough to hold the landlord vicariously liable for the broker’s housing discrimination, the landlord is liable if the landlord exercises supervisory control over the broker’s rental activities. In Cabrera v. Jakabovitz, 24 F.3d 372 , the court upheld a jury verdict awarding damages against a landlord for the discriminatory acts of their selling broker because the landlord provided screening criteria to the broker, and conditioned the continuation of the listings on whether the broker’s screenings and tenant referrals were consistent with the landlord’s specifications. The court found an agency relationship existed between the landlord and the broker the landlord had control over and benefited from the relationship. See also, Cleveland v. Caplaw Enterprises, 448 F.3d 518 (holding that questions of fact about control precluded dismissal of vicarious liability claim against landlord when listing agent had engaged in discriminatory conduct). By contrast, in Mitchell v. Shane, the Second Circuit held that sellers were not vicariously liable when they were out of state and did not know the race of prospective buyers at the time their broker engaged in discriminatory conduct.