Extended stay hotels remain a fast-growing segment of the hotel industry. These hotels cater to a variety of customers, including business travelers, vacationers, and families or individuals who may need temporary or semi-permanent housing. Extended-stay hotels often give customers the option of daily, weekly, or monthly payment rates, allowing the occupant to remain at the hotel for a duration that fits his or her needs.
The recent growth of extended-stay hotels raises an important legal issue for owners and operators of extended-stay hotels – namely, is an occupant of an extended-stay hotel protected by the federal Fair Housing Act (the “Act”)?
Background On The Act
Congress passed the Act in 1968. The goal of the Act is to combat discrimination in housing.[i] While the Act has been amended to add new protected classes, the heart of the Act remains largely unchanged. The Act generally prohibits discrimination in the sale or rental of housing. One cannot refuse to rent or sell, refuse to negotiate, or make housing unavailable or otherwise deny a dwelling on the basis of race, color, religion, sex, familial status, national origin, and handicap. Similarly, one cannot set different terms, conditions or privileges for the sale or rental of a dwelling, provide different housing services or facilities, or falsely deny that housing is available for inspection, sale or rental on the basis of race, color, religion, sex, familial status, national origin, and handicap. One also cannot advertise or make statements indicating a limitation or preference based on race, color, religion, sex, familial status, national origin, and handicap.[ii]
What Structures Are Covered By The Act?
The Act’s prohibitions only apply to the sale or rental of “dwellings.”[iii] Thus, all businesspersons who rent or sell property, including owners and operators of extended-stay hotels, need to assess whether their properties are considered dwellings under the Act.
The Act defines a dwelling as “any building, structure or portion thereof which is occupied as or designed or intended for occupancy as a residence by one or more families and any vacant land which is offered for sale or lease for the construction or location thereon of any such building, structure or portion thereof.”[iv] While the Act does not define “residence”, courts have looked to its dictionary definition: a temporary or permanent dwelling place, abode, or habitation to which one intends to return, as distinguished from the place of temporary sojourn or transient visit.[v]
Whether a building is a dwelling under the Act thus hinges on the intent of the occupant. Courts have applied several factors to determine an occupant’s intent: does the occupant intend to remain in the facility for any significant period of time?[vi] Is the facility designed for an occupant who may intend to remain in the facility for a significant period of time?[vii] Does the occupant view the facility as a place to return to?[viii] Does the occupant have an alternative place of residence?[ix]
Noting the Act’s remedial purpose, courts have applied the Act broadly.[x] The following structures have been found to be dwellings under the Act: summer bungalows[xi], farm worker cabins used five months of the year[xii], an AIDS hospice[xiii], a children’s home[xiv], a homeless shelter[xv], timeshare resort units[xvi], a drug and alcohol treatment facility[xvii], and outpatient halfway house residences that are part of a substance abuse treatment center.[xviii]
Are Extended-Stay Hotels Covered By The Act?
Several courts have considered whether hotels or other similar types of temporary lodging are dwellings under the Act. These courts have held that hotels, motels, and lodges are not considered dwellings and their occupants therefore are not protected by the Act.[xix]
While an extended-stay hotel is a type of hotel, it is not clear that its occupants are not covered by the Act.[xx] While courts have found that hotels are places of temporary lodging and therefore are not dwellings under the Act, some occupants of extended-stay hotels may meet the indicia courts have applied to determine whether a building is a residence under the Act. For example, extended-stay occupants may intend to remain for significant periods of time and may view the hotel as a place to return to. An extended-stay hotel may also be specifically designed for occupants to remain for significant periods of time, and it may even be marketed toward long-term occupants. Occupants of an extended-stay hotel may also lack an alternative place of residence.[xxi]
Given the growth of the extended-stay hotel industry, there will likely be cases where courts must decide whether an extended-stay hotel occupant is protected by the Act. Of course, given the case-specific tests that courts apply in Fair Housing Act cases, a black-and-white rule regarding whether extended-stay hotel occupants are protected by the Act is unlikely to emerge. Indeed, it is possible that guests of a given extended-stay hotel who reside there more permanently are protected by the FHA while the more transient guests at the same hotel are not.
The failure to comply with the Act (and with state-law equivalents of the Act) can expose an extended-stay hotel and its owner to significant liability. While it is uncertain whether the Act reaches extended-stay hotels, owners and operators should err on the side of caution and should carefully consider the potential implications of the Act when drafting hotel policies and when training hotel management and employees.
Originally published on Thursday, 26 September 2013
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