ESA Fee Waivers: Necessary and Reasonable, Not Guaranteed With Liz Roussel

In this episode of The Same Day Podcast, host Mat Zalk sits down with Liz Roussel, Partner at Adams & Reese, to talk about breaking common myths around ESA fee waivers. They discuss how the Henderson v. Five Properties case challenged HUD guidance, why the Loper Bright ruling changes how courts view agency notices, and how landlords can confidently evaluate ESA accommodation requests. Liz also shares how this decision may influence future fair housing disputes.

ESA Fee Waivers: Necessary and Reasonable, Not Guaranteed With Liz Roussel

Liz Roussel is a Partner at Adams & Reese, a law firm offering multidisciplinary legal services across the Southern United States. She is the Litigation Practice Group Leader in the firm’s New Orleans office and advises employers and managers in labor, employment, commercial, and directors/officers litigation. Liz joined the firm in 2002 and is ranked by Chambers USA in Labor & Employment law. She also serves on the firm’s Executive Committee and has been recognized by Best Lawyers and Super Lawyers for her legal work.

Here’s a glimpse of what you’ll learn:

• [03:11] Liz Roussel explains what was at stake in Henderson v. Five Properties and why the case matters for property managers
• [08:23] Why HUD’s 2020 notice on assistance animal fees became “gospel” for landlords and property managers
• [15:30] How the Supreme Court’s Loper Bright v. Raimondo ruling changed the way courts view agency guidance
• [19:52] The potential ripple effects of overturning Chevron deference on other government agencies
• [24:46] How landlords should now evaluate emotional support animal accommodation requests
• [30:38] Why landlords must provide effective accommodations, but not necessarily a tenant’s preferred solution
• [38:02] The likelihood of tenants continuing to believe HUD guidance is law despite the court ruling
• [41:41] Where Adams & Reese can defend property managers and how similar cases may progress nationally

In this episode…

The rules around emotional support animal fees have long left landlords and property managers confused and cautious. Many believe federal law requires automatic fee waivers whenever a tenant presents an ESA letter. But is that really what the law demands, or is it simply widely misunderstood guidance?

According to Liz Roussel, a seasoned litigator who manages a nationwide litigation practice, the law does not require landlords to automatically waive pet fees for emotional support animals. She highlights that a recent federal court ruling clarified HUD’s 2020 guidance is not binding law and that courts must evaluate each request on a case-by-case basis. This shift follows the Supreme Court’s Loper Bright v. Raimondo decision, which curbed automatic deference to agency interpretations. Liz explains how landlords can now require tenants to prove both the necessity and reasonableness of a fee waiver, and why this ruling gives property managers a clearer roadmap for handling ESA requests without fear of violating fair housing laws.

Resources mentioned in this episode:

• Yonatan Schmidt on LinkedIn
• Mat Zalk on LinkedIn
• Keyrenter Property Management
• Keyrenter Property Management in Tulsa | Oklahoma City | Arkansas
• Keyrenter Property Management email address: [email protected]
• Liz Roussel on LinkedIn
• Adams & Reese
• “Using the All-In-One Loan Strategy To Pay off Properties in Half the Time With Miles Thompson” on The Same Day Podcast
• “Why Credit Union Voices Matter in Legislation and Regulation With Keili McEwen” on The Same Day Podcast
• Judge Sarah Vance
• Louisiana Fair Housing Action Center
• Department of Housing and Urban Development (HUD)
• PetScreening
• National Association of Residential Property Managers (NARPM)
• Henderson v. Five Properties LLC
• Loper Bright v. Raimondo

Quotable Moments

• “It’s really my client who deserves the credit for seeing this through to its conclusion 100%.”
• “What this case demonstrates is that it’s not the law; it’s not the Fair Housing Act.”
• “You should not give deference to agency guidance and instead respect it only if persuasive.”
• “People aren’t necessarily entitled to the accommodation they prefer; they just need an accommodation that is effective.”
• “You’re not required to give disabled people a benefit; you’re just required to treat them equally.”

Action Steps

1. Review your ESA accommodation policies: Ensuring policies reflect current legal standards prevents reliance on outdated HUD guidance.
2. Require tenants to prove necessity and reasonableness: Shifting the burden of proof protects landlords and encourages legitimate accommodation requests.
3. Train property management staff on case-by-case evaluations: Educating team members reduces fear of fair housing violations and supports consistent, confident decision-making.
4. Monitor agency guidance critically: Evaluating whether future HUD notices are persuasive avoids automatic deference and strengthens legal compliance.
5. Collaborate with industry associations for legal defense: Pooling resources helps smaller property managers support litigation that clarifies and strengthens landlord rights.

Sponsor for this episode…

Keyrenter Property Management:

This episode is brought to you by Keyrenter Property Management.

Keyrenter Property Management is a full-service property management company that helps clients buy, renovate, and operate real estate assets.

The team helps clients build wealth while taking the headache out of property management.

That’s why, no matter what rental you have — single-family homes, condos, townhomes, or apartments — they can give you the management solutions you need.

To learn more about their services, go to https://keyrenterpmc.com/ or send them an email at [email protected].

Episode Transcript

Intro 00:04

Welcome to The Same Day Podcast, where we discuss driving incremental business growth and other topics related to real estate, property management and entrepreneurship. Now to the show at hand.

Mat Zalk 00:20

Mat Zalk, I’m the host of The Same Day Podcast, where I connect with top business leaders and real estate experts. Past guests include Miles Thompson, a real estate investor and investing coach, to others talking about portfolio optimization strategies, and Keili McEwen, who serves as vice president of governmental affairs at Tinker Federal Credit Union, discussing advocacy and lobbying for small and medium sized businesses. Today’s episode is brought to you by Keyrenter Property Management. At Keyrenter Property Management, we are a full service property management company helping our clients buy, renovate and operate real estate assets. We help our clients build wealth while taking the headache out of property management and taking the headache away is a key point. Listen, some property management companies are your first line of defence against litigation, while others seem to go out of their way to increase property owners exposure and liability.

But at Keyrenter, as you’ll see from today’s show, we try to stay abreast of current affairs in our industry so that we continue to take the headache out of property management. That’s why no matter what rental you have single family homes, townhomes, condos, apartments, we have the management solutions you need. Go to keyrenterpmc.com to see if we manage in your area. Liz Roussel. Today’s guest is a litigator at Adams & Reese in New Orleans, where she has worked her entire 23 year career, generally representing companies and management to defend their business decisions. 

 In addition to engaging in the full time practice of law, she manages the firm’s litigation practice across all of its 20 office locations. Liz Roussel. Welcome to the show. How are you?

Liz Roussel 02:03

I’m good. Thank you for having me.

Mat Zalk 02:04

I’m so excited to talk to you. And I said this before, but I’ll say it again. Thank you. On behalf of all the property managers and property owners in the world, thank you for taking on this case. Thank you for winning.

Which I wanted to get into a little bit later. About the merits of victory and loss in a case like this and how it kind of goes through the appeals process. But thank you for winning. Thank you for doing this. And thank you to your client for really taking this charge on because it’s been long overdue and is hugely impactful. 

 I mean, this is one of those things that’s just such a niche issue that affects so few people from our perspective, from the property manager perspective, but is so vitally important. So thank you first.

Liz Roussel 02:41

And yeah, you’re you’re welcome. It was my pleasure to work on the case. And I agree with you. It’s really my client who deserves the credit for seeing this through to its conclusion 100%.

Mat Zalk 02:49

Yeah, I love that. Today we’re talking about Henderson versus Five Properties LLC. see. For our listeners who have never heard of this case, don’t understand what was at stake. And just generally are are are in the dark about this case.

Can you give us a quick summary of the case and what was really at stake?

Liz Roussel 03:11

Yes. Happy to do that. So my client in the case actually two clients, but essentially a housing provider, had a property in Kenner, Louisiana, where the plaintiff lived called the Almond Tree Apartments. And the plaintiff rented an apartment there initially with a dog, didn’t identify the dog as an emotional support animal, and paid a required one time, $350 fee. That lease was scheduled to expire in November of 2023, and as the lease was coming up to expire, the plaintiff sought to move to a different property that was also managed by my client, called Sunlake, in the process of making the application to apply to Sunlake my.

The plaintiff told my client that her dog had become an emotional support animal. The dog that had lived with her for, you know, at the prior apartment had had become an emotional support animal. She was getting documentation, and she was going to provide that documentation so that she would not have to pay what was at that time a one time $400 animal fee. Initially, she provided a letter from the internet and we learned in discovery. And I’m sure this won’t surprise you, Matt, that in order to get the letter from the internet, all she was required to do it took about 10 or 15 minutes, was go on to a website, answer some questions in a drop down menu, pay an amount which was less than the one time animal fee. 

 And then she received a letter from a doctor who she never spoke with and never communicated with. So when she presented that letter, obviously the my client said that wouldn’t be acceptable. She said she was going to go get some better documentation. And so she actually, in this case, delayed her application to move into Sun Lake while she was going to get this better documentation. Interestingly, during that same time period, she applied to rent at another place. 

 This is just sort of an aside. And and they wouldn’t accept the internet letter either. And eventually they, they had sort of a long wait list. But she had told them that she would move in there without the dog, which really called into question whether she needed the emotional support animal at all. In any event, eventually she returned to Sun Lake to complete her application. 

 Provided information from, you know, a typical letter that I’m sure you all see all the time. It was general in nature and simply said, my client has an undefined, unspecified mental or emotional disorder that requires them to have an emotional support animal. The letter didn’t say anything about needing a fee waiver, just that the tenant was going to need an emotional support animal. What was so unique about this case is that this dog was allowed on the property. There was no problem with having the dog on the premises because the dog, the property allowed animals. 

 The only issue was whether the tenant needed a fee waiver as a reasonable accommodation. And that, as you know, is an issue of importance. And this case presented the opportunity for it to be decided squarely. And in any event, ultimately, my client responded to the request for the fee waiver and said that they didn’t see a nexus between the disability and the need for the dog or the need for the fee waiver, but not having, you know, there was no problem having the dog, but they would not waive the fee. They proposed more than once to allow the tenant to pay the fee over time, if that would help. 

 And rather than do that, she cancelled her application, went to the Louisiana Fair Housing Action Center, and brought a lawsuit under the Fair Housing Act and under Louisiana’s corollary state law, alleging that she had been discriminated against based on her disability because the company had not waived the fee for her. And so you ask the question, what was at stake in this litigation? Basically, what was at stake is the question of whether the Fair Housing Act requires housing providers to automatically waive fees for people with assistance animals. That was the question. That was what was at stake. 

 And that was the issue that my client thought was significant enough to see through to the conclusion of the litigation, to try to get an answer to.

Mat Zalk 07:39

But for your client, what what was immediately at stake? Of course, they opted to take a longer term perspective, which I love. But the immediate stakes for this case was HUD’s offensive litigation against them and the fine they could face, which is which is enormous for denying that the applicant a reasonable accommodation and that fee waiver. How did we how did it come to be that we were all so afraid of the repercussions from HUD in the event that they would sue somebody for fair housing discrimination based on a disability?

Liz Roussel 08:23

Yeah. So, you know, it’s really interesting. Obviously, as you point out, there are consequences for violating the Fair Housing Act. What’s really interesting is that HUD issued this notice in 2020 that said, and I actually I got this because I want to make sure I didn’t get it wrong. But and you all know it, a housing provider may exclude or charge a fee or deposit for pets in its discretion and subject to local law, but not for service animals or other assistance animals.

So the guidance I’m sorry, the notice that was issued in 2020 by HUD was explicit and specifically said, you know, thou shalt not charge a fee for an assistance animal. And so I think the notice does say that it’s a it’s best practices, it’s guidance. It’s got some limiting language in it. It suggests that it’s not necessarily indicative of how HUD is going to enforce the Fair Housing Act. But those are the words. 

 And then the actions that followed that, as I’m sure you and others know, is, is a lot of enforcement consistent with that. And so, you know, it did become sort of like the gospel that that, you know, you can’t charge for a fee for emotional support animals. And I think, I think it became that way, not just because that’s the way in which it in fact was enforced or has been enforced, but also because internet, you know, the people who are selling these letters on the internet say, you know, if you buy this letter, you may not have to pay the fee, which is obviously an incentive to buy the letter. And then, frankly, Matt, I think that because of all the enforcement, a lot of companies just rather than fight this because of the expense and the risk and the rest just agreed to enter into consent decrees to change their policies and to say, fine, if that’s what you want me to do, we’ll just change our policy to say that we’re not going to do this. And so it became a practice. 

 And I think what now has happened is people don’t know what the origin of this automatic fee waiver requirement that everybody thought was a requirement. You know, nobody knows what the origin of that is. But what this case demonstrated is it’s not the law. It’s not the Fair Housing Act. It’s it was this non-binding guidance. 

 Right. That you could argue is wrong.

Mat Zalk 10:51

And in our companies, as property managers, it was this Pavlovian response where, again, nobody knew the origin or the rationale. It was just taken as gospel. And we would quake in our boots at the thought of violating fair housing and violating somebody’s HIPAA rights and asking any questions at all. And it’s to such an extent that we’ve outsourced a huge portion of pet screening to companies that take on that liability for us to ask specific questions, because it’s their business to know which questions you can ask of these situations. I mean, it’s just absolutely nuts.

Anyways, there was a case that that preceded Henderson versus Five Properties LLC. And before we get there one second I want to just ask on the process side for your client. I mean, did they know? Did they ever realize that this was something that would come about when they questioned the the legitimacy of the fee waiver? Was this something that they were looking? 

 I mean, I know in many, many cases that ultimately make it to the Supreme Court, it’s essentially like a set up case. And I can think of some that are probably not appropriate to talk about on this podcast, but that I’ve learned about in the past. And I don’t know any specific, like, you know, ones that don’t have sexual content in them or more explicit, but like they set up a case where somebody gets busted for doing something that they think is an overreach and unconstitutional such that it can be appealed and appealed, and that reaches a Supreme Court verdict. Did did five properties have any idea that this was going to become a landmark case, or were they just like, I’m tired of this and I’m putting my foot down? Like, how did it start with them?

Liz Roussel 12:34

Yeah. So I really I, I wish I could say that I knew. I don’t think this was intended to be a set up. Frankly, I think they confront this issue so often that it could have been this case, or it could have been another case. But what?

But we did recognize early on in this litigation, as we were making decisions about how to proceed with it, that what was unique about it was how squarely this issue was going to be presented to the court. Because there are a lot of cases. Well, not a lot, but there are. You know, when we looked into this, we couldn’t find any cases that had squarely addressed the issue. There’s some that have tiptoed around it. 

 There are some that come close to the issue. And then the judges punt and they decide it for some other reason. And, you know, to her credit, I really respect and appreciate Judge Vance for taking on this issue because like every other case, there are ways that this case could have been decided differently without having to reach this issue. But this is the issue we wanted decided once and for all. Because because we believe the HUD guidance was wrong and not consistent with the law. 

 And and so we actually, in the course of the case actually teed up this particular issue of necessity early and independently in hopes that it would be decided. But ultimately, the court could have decided that, I guess on other grounds. But but I don’t think there was any specific intention to get this, you know, to, to set up this plaintiff. But there was a recognition after she initiated the litigation that this case presented an opportunity to get an important issue.

Mat Zalk 14:09

Decided is my do you think it’s a fair characterization? I’m not an attorney. I don’t play one on TV. Is it a fair characterization that some of the cases that do go before the Supreme Court are, like, crafted, so to speak? I mean, that’s a real crime.

It’s a real response, but that ultimately it’s like they’re kind of manufactured to get to a place where a decision on a law or I guess, case law or whatever is, is like the deciding factor for future For, for, you know, for the future.

Liz Roussel 14:38

Yeah, that that certainly does happen. You know, in order to get cases to the Supreme Court, a lot of times the pathway to get there is to have splits in the circuits and have the circuit courts, the appellate courts decide issues differently. So you have different application and interpretation of the law. And so the Supreme Court needs to come in and say, you know, this is the correct interpretation. So sometimes yes, that does get teed up in that way in order to achieve the goal of getting it where it can be resolved once and for all.

But I can’t say that that happened in this case.

Mat Zalk 15:10

I want to just make sure that I wasn’t totally mischaracterizing some of the stuff that ultimately gets up there. It was my understanding, but I didn’t want to mischaracterize. So where I was before there was there was a a preceding case in Loper, bright versus Raimondo that set the stage for for this ruling. Can you help us understand that case a bit?

Liz Roussel 15:30

Yeah. So that was a really significant case. That was a recent case from the United States Supreme Court, and it has to do with how courts are supposed to address or defer to or not defer to agency guidance like the HUD notice. And so for many, many years, there was a doctrine called Chevron deference, which was, as the Supreme Court recognized in the Loper case, a judicial invention. But the courts had come up with a construct where they initially would give deference to an agency’s interpretation of the laws that that agency enforces.

And so courts, when considering something like this case, you know, in a pre overbright situation, you know, the judge might have said and some courts did say, like the Intermark case that was cited by by the plaintiff in this case, we’re going to defer to the agency’s interpretation because it’s the one that enforces the rules. And that was the starting point, was to give this these the agency guidance deference. In Loper bright, the Supreme Court came and said, that’s that’s not correct. That is not what you’re supposed to do. It is the role of the courts to interpret the Constitution and to interpret statutes. 

 And it is not the role of the agencies. And so you should not give deference to agency guidance. And instead, what you should do is only respect it if it has the power to persuade. And and you should evaluate whether you’re going to give it any weight based on factors like, you know, is the agency guidance based on some sort of thorough analysis? Is the agency guidance consistent, you know, from from year to year and administration to administration or whatever it might be, you know, and is it is it based on sort of law and is it supported. 

 And so how that became really important in this case. And Judge Vance relied on it and cited it, is that while we argued, you know, you should just look at the Fair Housing Act and what the requirements are as a matter of law, to determine when an accommodation is needed and when and whether it is reasonable. What the plaintiff argued is, no, you shouldn’t do that. You should just follow the agency guidance. HUD issued a notice. 

 HUD’s notice says you can’t do this. And so at that point, what Judge Vance said is, okay, well, let’s go through the analysis, Loper Bright says, I don’t give deference to that. And so the question is it does it deserve any weight? Is it persuasive? And she explicitly found, looking at the notice that HUD’s notice is unpersuasive. 

 And she did that by saying, you know, there if you actually look at the notice itself. It cites a joint statement from the Department of Justice and HUD from years earlier that had no legal support, no analysis, nothing to evaluate. It cited two cases that had nothing to do with assistance animals. And then it cited one case called Goldmark, that was distinguishable because it had to do with a policy that treated disabled people differently than non-disabled people, whereas our case involved a generally applicable animal fee. And so she went through a very reasoned analysis to say these statements that everybody is, you said, have taken to be gospel and have treated as though they are the law, are unsupported and they’re unpersuasive. 

 And so they’re not going to dictate the outcome in our case. Instead, we’re going to apply the law the way the law is written.

Mat Zalk 19:24

Does this mean that there will be. very specific landmark cases against many other government agencies that have been in the era of the Chevron deference doctrine. I can’t remember what you call it like that. They’ve been issuing essentially law, even though it’s guidance that there’s going to be a ton of other agencies that are on notice.

Liz Roussel 19:52

I tried to prevent that, but something rang through. So I apologize, but I but I do know what your question was. So to answer your question, let me let me say this. I think a lot of agency guidance does probably deserve deference. It is based on thorough reasoning.

It’s consistent, you know, from you know, over years it’s been their guidance. And, you know, generally speaking, I think a lot of agency guidance people would do well to follow. I would also say that HUD’s notice, you know, this is this the part of the notice that Judge Vance rejected is very specific and relates to, you know, whether one statement that they made, which is an important statement, right. You automatically have to waive fees all the time for anybody who has an assistance animal, is is unpersuasive and and isn’t binding and and so forth. But that doesn’t mean that there’s not other things in the notice or, or in the guidance that has been.

Mat Zalk 20:51

Persuasive.

Liz Roussel 20:52

That are and that that people should follow. And so it is certainly true that litigants are going to rely on overbright to say, hey, judge, the agency got this wrong. You know, you should find this guidance unpersuasive and there will be litigation about that. But I think there’s a lot of agency guidance out there that’s probably, you know.

Mat Zalk 21:15

Solid and founded.

Liz Roussel 21:16

Yeah, absolutely.

Mat Zalk 21:17

Yeah. So Judge Vance made this ruling, But that was in the Eastern District Court of Louisiana. What? What? Or that’s the Eastern District based in Louisiana.

What compels a judge in a different area of the country to be bound by that decision made by the Eastern Louisiana District Court? Is it something that we can now rely on?

Liz Roussel 21:47

Yeah. No. Unfortunately not. So this opinion, opinions that are issued by district courts in any federal judicial district are binding on those parties alone. You could you know, in this case Louisiana fair housing could take a similar case tomorrow.

And if it was assigned to a different district judge in the same district, they wouldn’t be required to rule consistently with Judge Vance’s ruling. However, I courts do tend to, you know, look to other cases that address the same issue and determine whether they find them persuasive, and if so, they rely on them. So it has the power to be persuasive, but it is not going to be binding on on any other court.

Mat Zalk 22:35

Got it is so from my understanding, the the way for a court opinion to be binding on other areas is either for it to be a Supreme Court ruling or maybe there’s another way, like a broader a broader court, an appellate court. Yeah. Right.

Liz Roussel 22:54

Yeah, exactly. Yeah.

Mat Zalk 22:56

So notwithstanding the notion that your client was happy to win this case from the perspective of property managers, is there not an argument to say that they that we would have liked them to lose this case and win it on appeal at a higher at a higher court, which were then forced it to be incumbent on judges everywhere to take into account.

Liz Roussel 23:19

So I’ll always take the win. Yeah, for.

Mat Zalk 23:22

Sure, for sure, for sure.

Liz Roussel 23:24

But but yes, I take your point. It’s a good point. If so, the plaintiffs in this case did not choose to appeal this decision. It is final. And and the period of time for them to take an appeal has passed.

Yeah, it would have been great from my client’s perspective for them to take the appeal. In this case, it would have been to the US Fifth Circuit Court of Appeal, and if it was affirmed, it would have been binding on all of the federal courts within Louisiana, Mississippi and Texas. And that would have been tremendous. And I do think it would have stood up at the Fifth Circuit, because I think it’s correct and it’s well reasoned. And I think that’s the reason it probably wasn’t appealed. 

 So, yes, it you know, it would have had a greater, more binding effect if it had been appealed and affirmed. But I think that this opinion is going to be followed because I think it’s right. Yeah.

Mat Zalk 24:18

So so, you know, as we mentioned earlier, it’s it is the former HUD notice or guidance was something that that forced us into this feeling of fear and being trapped. And the decision was either accept every ESA request or risk violating the Fair Housing law. How should we as landlords now consider evaluating ESA accommodation requests?

Liz Roussel 24:46

Yeah. So that’s a that’s a legitimate fear. I mean, just because the court in this case did what it did doesn’t mean that the Fair Housing Action Centers or the Department of Justice, when pursuing claims on behalf of HUD, is going to do anything differently. And so, you know, I wouldn’t propose, and I don’t want to give legal advice to anybody, I don’t know, different states laws differing in that sort of thing. But what I can say is that Judge Vance’s ruling gave a good roadmap about, you know, what to do in determining both whether a request to waive a generally applicable animal fee is necessary and whether it is reasonable.

And you know, in my view, based on the roadmap she gave, it’s going to be difficult for tenants to meet. What is their burden of proof? So just to be specific, what she said was in evaluating whether a request for a waiver of a generally applicable fee is necessary, you you need to you can inquire about whether it is indispensable and essential to ameliorate some effect of the tenant’s disability. And if they cannot prove that it is essential, then they aren’t going to be able to prove that it is necessary. And then when evaluating whether the fee is reasonable. 

 What the court says. Well, let me go back actually on the issue. Yeah. No, this was on the issue of reasonableness, on the issue of reasonableness. It says, you know, you should look at things like, how does the fee compare to the overall cost of the housing? 

 In other words, is the fee itself reasonable? You should look at does the fee have a disparate impact on people who are disabled? In other words, what is the proportion of people who are non-disabled who are paying the fee, as opposed to people who are disabled? And the implication there is that if everybody’s paying the fee and it’s not having a disparate impact, then it’s more likely to be reasonable. They she said you should look at the overall importance of the fee to the landlord’s revenue, and you should look at the overall importance of the waiver to the person who’s requesting it. 

 And so, you know, I think if you apply and they’ve got to meet both of these standards, right. Like a tenant has to prove both. I need this. It is essential for me to have this without the fee waiver. I am going to get no ameliorative effect to my disability, and they’re going to have to prove that it’s reasonable to waive it under the circumstances. 

 And that’s what this case was just about a fee waiver. And that’s really important to remember. But this standard is the same standard that you need to evaluate when considering whether somebody should be entitled to have an emotional support animal to begin with. Now, that would have been a more difficult case to defend for sure. But the but what’s important is that that also is it’s the same standard that you need to go through. 

 Do you need this? If you don’t have it, you know, are you going to be able to ameliorate the effects of your disability? And is it reasonable?

Mat Zalk 28:00

Yeah. The challenge that I have with some of that language, and I imagine this would be echoed across many other property management companies, is we don’t employ attorneys. We’re employing people that do not have advanced degrees in law, and so having them interpret whether the the waiver will indeed ameliorate the, the, the, the disability. I guess it doesn’t. The it somehow reduces the effect of the disability.

And whether the fee waiver is indeed critical to the person’s, you know, is critical relative to the person’s overall income, is very can be subjective and not and shouldn’t be put into the hands of people that are not experts. So it’s like given the given the the still significant risk that’s posed by getting this wrong, it seems scary to me to put this in the hands of our of our individual property managers across, you know, five states and seven markets.

Liz Roussel 29:07

Yeah, I understand that. I think I guess I would say this in response to that. I do think this opinion gives you the ability to say, at least you know, the one judge who has considered this issue specifically has said, this is not automatic. This is a case by case issue, and it is the tenant’s burden to prove. And so when people are requesting an accommodation, it’s not inappropriate to say prove that you need what you’re asking for.

The other thing that’s important about this opinion is and this is consistent, not just I mean, this is a reasonable accommodation law, whether you’re talking about the Ada or the Fair Housing Act or whatever it is, is that people aren’t necessarily entitled to the accommodation they prefer. They just need an accommodation that is effective. And so the court pointed out in this case that allowing somebody to pay a fee over time can be effective in accommodating their concern if they if they truly can prove a nexus between their disability and their need for a fee waiver.

Mat Zalk 30:19

Does that mean, though? Does that mean that if a person in a wheelchair needs a ramp, that the ramp that that the courts couldn’t force the the landlord to put in a concrete ramp when a would ramp would suffice? I mean, is there is that like a an analogous situation?

Liz Roussel 30:38

It sounds like it could be. I mean, it’s again, if they as long as it’s going to serve the purpose to accommodate the person so that they can have equal housing opportunity, then yes, the landlord gets to choose the accommodation as long as it’s effective.

Mat Zalk 30:53

So, so four months or six months to pay off. This pet fee is a reasonable accommodation for charging a pet fee, because it will serve the purpose of ameliorating the the immediate impediment to getting the the emotional support animal into the house with that person if they truly need that.

Liz Roussel 31:15

Yeah, it could be. It could be. Right. You know, again, that presupposes and it’s a pretty big presupposition that this person has already demonstrated that there’s actually a nexus between between their disability and their need for the fee waiver, as opposed to their need for the emotional support animal. You know, the other thing that’s important about this opinion is, you know, Judge Vance talks about generally applicable fees and and makes the point that, you know, just because a fee is generally applicable does not mean it can’t be discriminatory.

It can be. But normally when you’re looking at generally applicable fees and evaluating whether they’re discriminatory, what you’re looking for is a disparate impact, whether in, you know, in enforcing that policy or applying that generally applicable fee, is it having some disparate impact on people who are disabled? If not, if not, if it is truly having the same impact for all people. You know, there are a number of cases and the judge cites them in the opinion and I you know, I commend that to your listeners that make it clear that you’re not required to give disabled people a benefit. You’re not required to treat them better than everyone else. 

 You’re just required to treat them equally. And so if you have a policy that treats them equally, that doesn’t have a disparate impact on them, generally that policy is going to be lawful.

Mat Zalk 32:39

Yeah, that’s very interesting. That’s very interesting. You don’t need to give them a benefit. They just need to be treated equally. Yeah.

We have historically, as I mentioned before, because we are so scared of this thing. We’ve outsourced the the screening of emotion of all pets, but predominantly emotional support animals and the and the and the associated paperwork to a company called petscreening.com and I don’t know if you’ve heard of that company, but they take all the backend work away so that all all applicants with pets or all applicants need to declare either I don’t have a pet, I do have a pet, and it’s not an emotional support animal or have a pet. It’s an emotional support animal. And then they upload their documents. 

 And pet screening takes care of the evaluation of those documents. But is it your feeling that that this case should be in front of them so they can alter or embellish their screening process to include the hardship, the financial hardship evidence, and determined based on that, why a tenant may be, rightly or not rightly eligible to pay the the the fees. Is that can we just like, push that onto them at this point, do you think?

Liz Roussel 33:45

I’m not familiar with the organization. I would think that as an organization they would want to, you know, read this opinion and consider it and decide whether it should impact anything. You know, I think I guess I would answer it this way, what this Decision says, is you can ask the tenant to prove it, to prove that they need what they’re requesting, and that what that looks like might be different for different people. And I think in some cases, you know, if you’re a if you’re a housing provider and you have income requirements, as you know, if you have income requirements that are multiples of earnings and you’ve got a situation like you had in my case where we’re talking about a one time fee, you know, we’re not talking about pet rent. You know, we know, we know, as Judge Vance pointed out in her opinion, in our case, it was a one time fee.

She looked at the total cost of the housing over the course of the year, said, you know, this is a it’s a very small percentage. So how much information are you going to need, in that case, about somebody’s finances to determine that they can afford it? Probably none. You know, We or not much. Not more than you would normally ask for in your application process. 

 And so, you know, I’m not certain that this company is going to need to suddenly be asking people invasive questions about their finances. And I but I think, you know, on the other hand, I think it may be that they can use the information. Maybe I don’t know what you all supply to them for their consideration. But, you know, I suspect that in many cases, you would be able to make this determination that based on the information you have available initially, it doesn’t look like there is a need for the waiver and then maybe put that back on the tenant to say if you disagree, prove it, and then they can decide whether they want to come forward and, you know, try to demonstrate financial hardship. But I, I guess I wouldn’t encourage somebody to go, you know, it’s burdensome, it’s invasive. 

 It’s probably unnecessary in many instances.

Mat Zalk 35:58

Yeah. Did. So pet rent was not part of this case. Was not part of Henderson V correct? Yeah.

So do you think that that I guess that the implication of it not being there and how we how we kind of square that is, is the overall pet rent if it’s $25 a month, is that significant vis a vis the total cost of the of the annual rental? I guess would just be the simplest way to put it. Is that right?

Liz Roussel 36:25

Yeah. But again, keep in mind there’s two requirements the plaintiffs have to prove here. Initially, they have to prove they need this, that it is indispensable and essential that you not that they have the animal, but that they get the fee waived. And if and only once they prove they need it, then do you move on to whether they can prove that what they’re asking for is reasonable. And it’s and it’s there that you get into those other factors, which is, you know, does the policy have a disparate impact.

And, you know, what is the you know, how important it is to the housing provider. How important is it to the tenant? How, you know, how reasonable is the fee in general, but you don’t even get to those questions until they make the showing that they or I don’t think you should get to those questions until they make the showing that they need it in the first instance.

Mat Zalk 37:13

Yeah. My understanding is that Adams & Reese has gotten a lot of publicity on this ruling, that it’s been published a number of times, and big media outlets across the country have picked up this ruling, and they’re and they’re kind of publishing it to their audiences. Considering that this story is getting traction and that this ruling is so important for a, albeit a specific, very specific niche category of society, do you have any sense that that it it will the ruling will deter tenants from litigating the issue of essay fee waivers. Or is that a category of society, perhaps albeit 50% in some states, that doesn’t that won’t take this into account, and we’ll just go straight to the Fair Housing Authority in their area. And the Fair Housing Authority will make a decision.

Liz Roussel 38:02

Yeah. Gosh, I wish I knew. Your guess is as good as mine. On that I will say there’s so many people now who, you know, I’ve talked to people and they they just think the HUD notice is the law. You know, many tenants.

I’m sure you all deal with this all the time. They provide the emotional support animal letter. You ask for more information and then they say, you can’t ask me that. That’s illegal. You can’t charge me that. 

 That’s illegal. You know, part of the reason I, I accepted and appreciate the invitation to be here today is that, you know, I think there is a general operating assumption out there in the, in the world that is inconsistent with what is really the law. And so, you know, how you change that. I you know, I think it’s difficult getting people to understand that somebody has now questioned the foundation of this belief and albeit it’s just one court, right? I mean, I think we need more opinions like this opinion, and then eventually maybe people will be able to to question it. 

 I in terms of what what tenants will do, I suspect that they are going to continue to believe because everybody, you know, in the air and everybody believes it is just thou shalt not charge a fee. One cannot. It is illegal always if I get this letter to charge me a fee, and I don’t think the people on the internet are probably going to change their behavior, they’re still going to sell these letters. And and so I think the tenants behavior is not going to change. What I do think this opinion does is it gives something to a housing provider to when a tenant says, you can’t charge me that fee to say, actually, I can, you know, or I might be able to we need more information. 

 Here’s this opinion.

Mat Zalk 39:52

And inside a bunch of legal doctrine that they that they’ll never understand.

Liz Roussel 39:57

Yeah, right.

Mat Zalk 39:59

It is probably a good a good tactic for having them back down a little bit.

Liz Roussel 40:03

Yeah. I mean, the real question is, are they still going to go to the, you know, fair housing action centers? And and if they do and I’m sure they will, you know, how are they going to respond to this. And there’s any number of there’s any number of responses, you know. How is HUD going to respond to this.

Are they going to are they in. Are they going to, you know, undertake some other process to try to double down on this position and find some way to support it, substantiate it, put some thorough reasoning behind it so that a different court will reach a different conclusion, you know, and say, oh, I think it is persuasive. You know.

Mat Zalk 40:38

Did it leads me to one other question. Was Henderson’s council fair housing council? Are they private council or is that somehow affiliated with the Department of Justice?

Liz Roussel 40:50

So she was represented by the Louisiana Fair Housing Action Center. So she was not represented by the Department of Justice. But she also wasn’t represented by just a, you know, a private attorney.

Mat Zalk 41:02

Interesting. Yeah. Your answer to or. Sorry, the the the statement you made about we hope that other opinions will come out at some point in the future. Leads me perfectly to the national footprint.

Where Adams & Reese can defend property managers and litigation in defense of cases that may arise from any of our changes to policies towards essay, reasonable accommodations and the fees associated with them as property managers. Can you tell us a little bit about Adams & Reese and and where perhaps if we wanted to, we could pursue a defense of, of a case like this?

Liz Roussel 41:41

Yeah, sure. So I appreciate your questions. Very nice of you to ask. I you know, our firm is located primarily in the south central United States. So Texas, Louisiana, Mississippi, Alabama, Florida, Georgia, South Carolina, DC, and Tennessee.

I think I’ve covered it all. So you know the SEC basically. Yeah. What’s that?

Mat Zalk 42:04

Good choice.

Liz Roussel 42:05

Yeah. So I mean, we have people who are admitted in other states, but those are the states. And Denver actually, we also have an office there. But we are that’s that’s where we have, you know, our litigators and lawyers who are practicing in offices. So we we welcome the opportunity.

You know, I’ll mention this too, that as I said in the beginning, there aren’t that many cases that have confronted this issue. And those that have a number of them have sort of decided the cases for different reasons. But there are the cases that have reached this issue or, or made a decision that is close to deciding it, have generally come out with a landlord favoring opinions. There’s a case from the Ninth Circuit of all places that that, you know, we cited that was we thought favorable. There’s a case from Georgia that, you know, also was, you know, favorable on this issue. 

 So I have some level of confidence, especially if HUD doesn’t do anything to modify its notice or try to, you know, beef it up so someone else would reach different conclusion that, you know, if if companies will expend the money to litigate these issues. I you know, I think there are there are courts that will come to similar conclusions.

Mat Zalk 43:23

And I guess ultimately it comes down to how landlord or tenant friendly estate is. And that judge is. And so what if there’s one ruling that’s that’s oppositional in, in its ultimate opinion to the Eastern Louisiana District court, eventually that will have to. That’s how you say it gets up to a higher level because there’s differing opinions.

Liz Roussel 43:47

Yeah. So I would love to say that you’re wrong, that it shouldn’t matter where you are and what the court’s personal points of view are, but I think that would be naive. So I think I agree with you that the jurisdiction and the judge can have an impact on the outcome here. But yes, that that is the way these things sort of percolate up to appellate courts. And, you know, I don’t know that this issue would ever, you know, be an issue that would go to the Supreme Court.

But that is the way that these things sort of progress. But mostly you just need to make more law and have courts pass on this. And that’s the that’s the point of Loper. Bright is agencies aren’t lawmaking bodies. And what’s happening is you have agencies who are saying what they would like to be the law or in the notice in this case, you know, what they call a best practice, what the people in those agencies think is a best practice, but it’s been effectively applied like it is the law. 

 And I think we need the courts to pass on this issue and say, you know, and give people guidance.

Mat Zalk 44:55

One one thing that struck me as I was reading about this case and about Five Properties LLC, is that they took on a significant financial burden in a way that helps all of us, or with an outcome that helps everybody in the property management space. So it strikes me as a free rider problem, whereby we all get to ride on the coattails of Five Properties LLC because they took this financial burden on. So as we go forward and try to create or try to try to get other opinions, judicial opinions on similar cases, are we best off banding together as property management companies? Are we best off waiting for if we’re a small business like ours, or are we best off waiting for a greystar star or a huge multinational property management company to to fight this battle for us. I mean, what would you what would you recommend for those of us who are small and don’t have the.

Liz Roussel 45:53

I would say if history is a predictor of the future, you might wait a long time. If you’re going to wait for a gray star or a huge property management company to take on this issue. I mean, I don’t represent any of those companies. I don’t know what their decision making has been, but it would seem, based on the small number of cases that have addressed these issues, that that many of them have made a business decision, that it’s financially not worth the trouble to to try to do what five properties did in this case. And I suspect that they have modified their policies, and they have just decided they are going to accept this HUD guidance as though it is the law.

Even though I think everyone knows there is huge opportunity for abuse here and and, and and housing providers are are dealing with fraudulent applications. And when I say that, you know, it’s really a shame because the Fair Housing Act serves a really good purpose. It is really important. There are people who are disabled who need accommodations. And so I don’t want anybody to suggest that I’m, you know, that I have an opinion otherwise. 

 But but anyway, I don’t I think you might wait a long time to see other people do that for you. You know, I think maybe, you know, associations could come together to assist in this litigation if, if they maybe that would be a more effective way.

Mat Zalk 47:21

This should definitely be something that like our association or the National Association of Residential Property Managers should be looking to defend across the country for all of its members. That’s a great idea. Liz. I’m so grateful for you coming on to educate us on this case? Henderson v Five Properties LLC.

In conclusion, is there anything that I didn’t ask that I should have asked? Any other thoughts that you’d like to share? Anything else?

Liz Roussel 47:51

No, I don’t think so. Like I said, I really appreciate the invitation. I’ve never been on a podcast before. So this is a, you know, a new opportunity for me. And anyway, so thank you.

Thank you very much.

Mat Zalk 48:06

Liz Roussel is a litigator at Adams & Reese in New Orleans, where she worked. She’s worked her entire 23 year career, generally representing companies and management to defend their business decisions. In addition to engaging in the full time practice of law, she manages the firm’s litigation Practice group across all of its 20 office locations. Liz, thank you again. I really appreciate it.

Liz Roussel 48:25

Thank you. Thank you so much, Mat.

Outro 48:30

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