If your condominium association documents include restrictions on occupancy (how many people can reside in a unit), be aware of what the federal law states on the issue to avoid potentially costly lawsuits brought by disgruntled unit owners.

While it is legal for a condominium association to adopt and enforce occupancy policies, those rules (and enforcement of the rules) must be reasonable and in compliance with state laws and local ordinances. If they are not, the rules run the risk of being found discriminatory based on familial status under the federal Fair Housing Act. The act prohibits discrimination on the basis of (among other things) familial status, which means the presence of children in the family.

As you may be aware, the Department of Housing and Urban Development (HUD) is the entity charged with enforcing the Fair Housing Act. In a policy statement issued by HUD regarding occupancy standards, it was emphasized that a “two-people-per-bedroom” policy may be challenged where special circumstances are present. Some of the circumstances that may weigh in favor of a two-people-per-bedroom policy being found discriminatory are: (1) if the bedroom and living area are sufficiently large to allow for the third person; (2) if the child (the third person residing in the unit) is very young; and (3) if state/local ordinances would allow the third person to occupy, despite the housing provider’s rules (here, the condo association’s rules).

Therefore, for example, an association should beware if it has a two-person-per-bedroom occupancy policy and it seeks to enforce its rules against a couple who recently had a baby. In this example, all three of the circumstances described above would arguably weigh in the owner’s favor if the rule was challenged, although the size of the condo probably could be argued either way. There is a hypothetical within the HUD policy where the child/third occupant in question is an infant, and states that it is more probable that discrimination would be found if the third occupant was a baby.

It is important to note that the applicable State Administrative Code provision looks at two of the HUD factors discussed above (size and age of the occupant), and states:

Every sleeping room shall be of sufficient size to afford at least 400 cubic feet of air space for each occupant over12 years of age, and 200 cubic feet for each occupant under 12 years. No greater number of occupants than the number thus established shall be permitted in any such room. Wis. Admin. Code, §SPS 379.09.

By considering both the size of the unit and the age of the occupants, the state code provision would probably be found “reasonable” by HUD if challenged.

Associations should also become familiar with any local/ municipal ordinances dealing with occupancy and should use those as a guide when adopting or revising its rules.

Of course, HUD policies, as well as the applicable federal, state, and local laws are constantly changing. If you are considering making any changes to your documents regarding occupancy requirements, we would recommend that you consult your attorneys to make sure that the changes will comply with the law.