Lawsuit alleges discrimination at Idaho Active Adult development

Idaho Business Review
Lawsuit claims federal fair housing law violations
Posted: Monday, November 9, 2009

The Intermountain Fair Housing Council is suing The Orchards at Fairview Condominium Association, claiming the company and its real estate firm violated federal housing discrimination laws two years after the council explicitly warned the developer about the marketing of the condo project.

The council, a Boise-based nonprofit, filed a lawsuit in federal court Oct. 15 against the association and real estate firm Windermere Real Estate/ Capital Group Inc.

The suit alleges that the companies violated the Fair Housing Act by pitching the development as an “active adult community” and discouraging families with children from living there. It also says the development maintained an unlawful restriction on group homes that would serve the mentally and physically disabled.

The Fair Housing Act prohibits discrimination based on familial status or handicap in the sale and rental of homes.

“There’s no such thing as an ‘active adult community’ to be advertised,” said Richard Mabbutt, the council’s executive director, in an interview. “We discussed that quite frankly.”

Court papers say Mabbutt contacted and met with Orchards developer Mike Dixon after an Oct. 5, 2005 article in the Idaho Statesman described the property as “a 42-unit ‘empty nester’ subdivision.”

Dixon told Mabbutt the term “empty nester” was “the reporter’s choice of words” and that the development was open to families with minor children and not age-restricted, court papers say. He also said the property would include a playground even though the site plans didn’t include one.

Mabbutt warned against use of the word “adult” in advertising and other materials.

A March 7, 2005 article in the Idaho Business Review also included a comment from Dixon that described the condos as “suited for the empty-nester market.”

On May 14, 2007, Mabbutt saw a sign on the property that described it as an “active adult condominium community.” That prompted him to send several testers to the property to investigate if there was a pattern of discrimination.

On May 16, 2007, a tester met with Mary Liese, a Windermere agent who was handling the sale of units at the time. The suit claims that Liese made discriminatory statements, such as “we prefer people 55 and over,” and noted that the complex does not have a playground. She also provided a list of rules that included a prohibition on swing sets, unaccompanied minor children using the pool and teenage parties at the community center.

Another tester returned a week later and picked up a document listing the complex’s covenants, conditions and restrictions, which included a prohibition on “group homes … or any similar type of lodging, care or treatment facility.”

The council filed an administrative complaint with the U.S. Department of Housing and Urban Development on Sept. 7, 2007. It withdrew the complaint on Jan. 24, 2008 so it could later file the lawsuit.

The suit is seeking $56,000 in actual and punitive damages and $34,500 in other expenses. It also asks for the establishment of a $273,500 victims’ compensation fund to repay unidentified victims.

Steve Osburn, Windermere broker and owner, said in a statement that his company represented the Orchards complex for a two-year period starting in about January 2007. He said Windermere successfully sold homes to people of all ages and familial status and that a pattern of discrimination never existed.

He said the lawsuit’s claims about Liese are “simply false” and that she denies making discriminatory statements.

“Furthermore, we only get paid when we successfully close a sale,” he said. “What motivation would Ms. Liese have to limit potential buyers as they suggest?”

The Orchards at Fairview was built on the site of a former BMC West warehouse and includes single-story condos ranging from 1,271 to 1,935 square feet, a clubhouse and pool. Dixon sold the Fairview complex and a similar development, The Orchards at Cloverdale, to partners Mike Keller and Ev Davis in 2008.

A message left with the Orchards was not returned.

Ken Nagy, the lawyer representing the council, said there is a way for communities to be set up as age-restricted under the Fair Housing Act.

“They have to do that consistently, and they have to be set up that way,” he said. “This community didn’t do it that way. It has consistently marketed itself as a community that is attractive to an older group of residents, and they were warned early on about that.”
© 2009 Idaho Business Review