Understanding Virginia’s “Source of Funds” Protections

Posted on by W. Martin Williams in Corporate and Business

Last October, the Virginia Attorney General’s Office filed several lawsuits against various Virginia landlords and property management companies alleging discrimination against renters participating in the Federal Housing Voucher Program. In his last day in office, outgoing Attorney General Mark Herring announced his office had reached settlements with several defendants. Since then, fair housing advocates have been left to wonder whether new Attorney General Jason Miyares will continue Herring’s aggressive enforcement of the Virginia Fair Housing Law “source of funds” protections. However, a recent lawsuit filed in Richmond Circuit Court indicates that tenants are not idly standing by, and landlords and property managers should expect an uptick in private lawsuits.

As reported in a recent article in the Times-Dispatch, a former tenant, a voucher recipient, alleges in her complaint filed in Richmond Circuit Court that her property owner and property manager discriminated against her and other housing voucher recipients by charging them rent that was 50% to 60% higher than that charged to tenants without a housing voucher.[1]

Protected Classes

Effective July 1, 2020, Virginia Fair Housing Law was expanded to include 12 protected classes - including “source of funds.” Under Virginia law,

“[i]t is the policy of the Commonwealth of Virginia to provide for fair housing throughout the Commonwealth, to all its citizens, regardless of race, color, religion, national origin, sex, elderliness, familial status, source of funds, sexual orientation, gender identity, military status, or disability, and to that end to prohibit discriminatory practices with respect to residential housing by any person or group of persons, in order that the peace, health, safety, prosperity, and general welfare of all the inhabitants of the Commonwealth may be protected and ensured.”[2]

Yet, unlike Virginia, the Federal Fair Housing Act includes 7 protected classes: race, color, national origin, religion, sex (including gender, gender identity, sexual orientation, and sexual harassment). Specifically, the Federal Fair Housing Act omits “source of funds” as a protected class.

Source of Funds

Under the Virginia Fair Housing Law, “source of funds” is defined as any source that lawfully provides funds to or on behalf of a renter or buyer of housing, including any assistance, benefit, or subsidy program, whether such program is administered by a governmental or nongovernmental entity. Under Virginia Code § 36.96.3, it is unlawful for a landlord to (i) refuse to rent to someone based on their source of funds; (ii) impose terms, conditions, or privileges on the rental of a dwelling based on source of funds; (iii) make, print, or publish any notice, statement, or advertisement that indicates any preference, limitation, or discrimination on the basis of source of funds; and (iv) represent to any person that a unit is not available because of their source of funds.

Enforcement

The Virginia Fair Housing Board administers and enforces the Virginia Fair Housing Law, while the Virginia Real Estate Board is responsible for fair housing cases involving real estate licensees or their employees. However, each board investigates housing discrimination through the Virginia Fair Housing Office, which is a division within the Virginia Department of Professional and Occupational Regulation.

Typically, individuals believed to be discriminated against on the basis of their “source of funds” can elect to file a complaint with the Virginia Fair Housing Board.[3] Upon receipt of a complaint, the Virginia Fair Housing Office will investigate and prepare an investigative report summarizing the witnesses contacted, the documents reviewed, and any other pertinent information. The Virginia Fair Housing Board will then issue a decision as to whether “reasonable cause” exists that an individual was discriminated against based on their “source of funds.” If the Board finds “reasonable cause” does in fact exist, the Virginia Fair Housing Board is allowed, via the Virginia Attorney General’s Office, to initiate judicial action. Under the Virginia Fair Housing Law, courts are authorized to award injunctive relief, civil penalties, compensatory damages, punitive damages, and attorney's fees and costs for violation of “source of funds” protections. While not common, the Virginia Fair Housing Law permits individuals to bring forth their own private actions.

Private Action

The Virginia Fair Housing Law does not require an individual to first file a complaint and undergo the administrative investigation process with the Virginia Fair Housing Board prior to filing a private lawsuit. Similar to the plaintiff in the reported lawsuit pending in Richmond Circuit Court, an individual can elect to file a private cause of action with the courts. Such cause of action must be brought within two (2) years of the incident or end of the alleged discriminatory housing practice.[4] If the Richmond Circuit Court finds that the property owner and property manager in the pending lawsuit discriminated against the plaintiff and other housing vouchers recipients, the court is permitted to award her compensatory damages, punitive damages, injunctive relief, and attorney’s fees and costs.

While it is unclear if the Virginia Attorney General’s Office will continue to aggressively pursue “source of funds” violations, it is still vitally important that property owners and property managers understand the Virginia Fair Housing Law and work with their legal counsel to develop a strategy for handling Virginia Fair Housing Law complaints and private lawsuits.

[1] https://richmond.com/news/lawsuit-alleges-south-richmond-apartment-complex-charged-voucher-holders-higher-rents/article_2b68ec7d-ce7b-5984-ba12 a45670f65d97.html?utm_medium=social&utm_source=

[2] Va. Code §§ 36-96.1, et seq.

[3] See Va. Code § 36-95.9(A)

[4] See Va. Code § 36-96.18(A)

About the Author

Martin Williams

W. Martin Williams - Martin counsels clients in a variety of areas, including real estate, fair housing, general corporate and business transactions, creditor’s rights and litigation. He works closely with individual and corporate clients to provide a broad range of legal services, including, the purchase, sale and leasing of real property, lease disputes, real estate finance and dev...

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