Owners of Multifamily Housing Beware

Owners and developers of multifamily housing beware—you may be held responsible for your architect’s oversight. A growing number of state and federal courts are in universal agreement that owners and developers cannot sue their architects for designs that fail to meet accessibility requirements of the Fair Housing Act (FHA) and Americans with Disabilities Act (ADA). While Arizona has yet to address this issue, recent decisions illustrate the importance for owners to proactively engage architects and consultants regarding accessibility issues.

In a recent decision, Miami Valley Fair Hous. Ctr., Inc. v. Campus Vill. Wright State, LLC, 2012 WL 4473236 (S.D. Ohio 2012), the district court held that the FHA does not authorize an owner’s express or implied claims for indemnification against its architect. The court relied upon the reasoning of a 2010 Fourth Circuit decision:

[C]ompliance with the ADA and FHA . . . is ‘non-delegable’ in that an owner cannot ‘insulate himself from liability for . . . discrimination in regard to living premises owned by him and managed for his benefit merely by relinquishing the responsibility for preventing such discrimination to another party.’

. . . Allowing an owner to completely insulate itself from liability for an ADA or FHA violation through contract diminishes its incentive to ensure compliance with discrimination laws.

Equal Rights Ctr. v. Niles Bolton Assoc., 602 F.3d 597, 602 (4th Cir. 2010) (quoting, in part, Walker v. Crigler, 976 F.2d 900, 904 (4th Cir. 1992)).

While Miami focused on the FHA, the Supreme Court of Nevada applied the same rationale to the ADA in Rolf Jensen & Assoc., Inc. v. Dist. Court, 282 P.3d 743 (Nev. 2012). Citing a litany of decisions, Rolf held that the ADA preempts indemnification claims brought by owners for their violations thereof. “Simply put, it follows that if owners were permitted to pursue indemnification for their own ADA violations, Congress’ goal of preventing discrimination would be frustrated.” Id. at 748.

What should we learn from this surprising trend? Property owners must take proactive steps to ensure that architects and designers comply with ADA and FHA requirements. Further, full indemnification provisions might just be a thing of the past.