Apartment Landlords Are Likely
To Face Disability-Access Suits

After getting one apartment-building owner to settle, a group representing disabled people has sued two more apartment companies that it says designed and built units that aren't fully accessible to tenants with disabilities.

These lawsuits are likely the first in a series against national apartment companies that might result in renovations to hundreds, if not thousands, of units and cost tens of millions of dollars.

"It is reasonable to conclude that other large owners [both REIT and private owners] will also become the subject of similar lawsuits," Craig Leupold, a residential-property analyst at Green Street Advisors, wrote last week in a research note. "While the gross costs may be large, the impact on shareholder value should be relatively small," he added.

The Equal Rights Center of Washington, D.C., says AvalonBay Communities Inc., a real-estate investment trust based in Alexandria, Va., and closely held Bozzuto Group of Greenbelt, Md., allegedly operate apartments with doorways, kitchens and bathrooms that aren't large enough for wheelchairs to maneuver, among other alleged violations of the federal Fair Housing Act.

AvalonBay says it hasn't decided on its next legal move. It noted the lawsuit in a quarterly filing with the Securities and Exchange Commission last week.

"AvalonBay fully supports and is committed to the objectives of the Fair Housing Act and the Americans with Disabilities Act," company spokesman Allan Jordan says. "They are committed to providing access and good living to all customers at all the communities."

The Equal Rights Center says it filed these lawsuits after learning from advocates that "the number-one crisis for their people with disabilities is obtaining accessible housing," says the center's executive director, Rabbi Bruce Kahn.

According to the Equal Rights Center, many of the accessibility requirements of the Fair Housing Act apply to apartments built after March 13, 1991. The federal Americans with Disabilities Act requires wheelchair access to public areas such as leasing offices, parking lots and sidewalks that were constructed after January 26, 1993, the group says.

The federal lawsuits come four months after apartment operator Archstone-Smith agreed to settle a similar lawsuit with the Equal Rights Center, pay the group $1.4 million in legal fees and other costs and fix accessibility problems in some of its units.

"Archstone-Smith was extremely honorable," Rabbi Kahn says. "They took the redemptive approach to make things right and to do it quickly and thoroughly. They really set an example for how others should follow."

Archstone-Smith says the cost and extent of the renovations are unclear. The Washington Lawyers' Committee for Civil Rights and Urban Affairs, which worked on the case, estimates it might cost more than $20 million to retrofit the apartments.

Archstone-Smith says it will try to recoup some of those costs from the architects, engineers and builders who worked on the developments, "upon whom the company relied for assurances of building design and construction compliance."

The lawsuit against AvalonBay, which was filed in late September, says the Equal Rights Center tested 33 of the company's properties and found at least one alleged accessibility violation at each site. The lawsuit cites alleged problems at 100 developments currently or formerly owned by AvalonBay, according to the company.

Bozzuto Group is asking a judge to dismiss the case, saying that several properties cited by the Equal Rights Center weren't constructed or designed by the company and that others haven't yet been built.

Donald Kahl, a lawyer at the Washington Lawyers' Committee, says the sites named in the lawsuit were identified as Bozzuto properties in the company's published material.

"The Bozzuto companies are committed to fair housing, accessibility and the anti-discrimination laws," the company said in a statement. "Handicapped persons reside in a number of Bozzuto communities and are regularly accommodated."

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