Church Praises Orlando Shootings: Must Its Landlord Renew the Lease?

Are commercial landlords subject to laws banning discrimination in renting?

The shooting of dozens of people in an Orlando gay bar in June 2016 was met with almost universal condemnation. Those who celebrated the event generally did not come to national attention. But one who did was a pastor for a church in Sacramento, California, who lauded the massacre and lamented that more people were not killed. Pastor Roger Jimenez of Verity Baptist Church said that, if it were up to him, gays and lesbians would be lined up against a wall so a firing squad could “blow their brains out.”

Among the many who heard about the pastor’s remarks was the church’s landlord, Harsch Investment Properties, owner of Northgate Business Park (where the church is located). Noting that it disagreed with every sentiment expressed in the sermon, Harsch offered to let Verity out of its current lease with no responsibility for remaining rent. It also declared that it would not renew the church’s lease when it expires in March 2017.

It’s certainly legal for a landlord and a tenant to mutually agree not to renew an existing lease. But, under federal and California discrimination law, can a commercial landlord legally refuse to renew a church’s lease because of a moral disagreement with the church’s teachings?

Discrimination in Renting

Many are familiar with the federal fair housing rules contained in The Fair Housing Act and the Fair Housing Amendments Act. These laws bar residential landlords from discriminating based on characteristics like:

  • race
  • religion
  • national origin
  • familial status
  • disability, or
  • sex.

Each of these is a “protected category.” States have added to the protected-category list with their own laws. California, for one, has added gender identity, marital status, sexual orientation, and receipt of public assistance.

So, what about discrimination by a commercial landlord? The federal fair housing laws and California’s Fair Employment and Housing Act don’t apply to commercial leasing. Another California law, though, does: the Unruh Civil Rights Act.

The Unruh Act and Commercial Landlords

California’s Unruh Act has the most comprehensive list of protected categories, prohibiting discrimination on the basis of:

  • sex
  • age
  • race
  • color
  • religion
  • ancestry
  • national origin
  • disability
  • medical condition
  • genetic information
  • marital status
  • sexual orientation
  • citizenship
  • primary language, or
  • immigration status.

Many court decisions say that the classifications above are illustrative only, not comprehensive. In other words, the Unruh Act prohibits all “arbitrary discrimination.” That includes discrimination based on one’s “personal characteristic or trait,” even if that characteristic or trait doesn’t appear in the list above.

“Business Establishment”

The Act applies to “all business establishments of every kind whatsoever.” Naturally, restaurants, service suppliers, and retail shops fall within the concept of a business establishment, but what about a building owner who advertises for and chooses tenants?

If a California commercial landlord qualifies as a business establishment, Unruh applies to Harsch Investment Properties’s rental decisions. In that case, Harsch would risk a lawsuit by refusing to rent to Verity Baptist.

The California Supreme Court has liberally construed the meaning of “business establishment,” finding that the phrase “embraces everything about which one can be employed, and it is often synonymous with ‘calling, occupation, or trade, engaged in for the purpose of making a livelihood or gain.’” (Burks v. Poppy Construction Co., 57 Cal.2d 463, 468 (1962).) By that definition, a commercial landlord, whose “occupation” is offering property for lease, operates a business.

Roth v. Rhodes: Unruh Applies

A California appellate court decision supports the notion that commercial landlords are subject to Unruh. In Roth v. Rhodes, the landlord of a medical offices building adopted a policy of renting only to medical doctors. (25 Cal. App. 4th 530 (1994).) A disappointed podiatrist sued, claiming that excluding podiatrists constituted “personal characteristic or trait” discrimination under Unruh.

The appeals court assumed, without discussion, that Unruh applied; the only issue was whether the landlord acted due to illegal motives (desiring to keep podiatrists out because of dislike) or justifiable economic motives (wanting the building to be full of medical doctors to enhance the value of the rentable space).

The court came down on the side of the landlord, finding sound business decisions for limiting tenants to medical doctors. The court’s assumption that Unruh applied confirms that the act applies to landlords like Harsch.

Refusing to Renew: Risky?

The Roth decision tells us that Harsch is subject to the Unruh Act. But before concluding that Harsch would have to rent to the church, think again about the defeat of the disappointed podiatrist.

The Roth court wrote that an economic decision by the landlord, as long as not a subterfuge for other, illegal discrimination, would be permissible. Wanting a building full of medical doctors was no different than, say, wanting a law firm full of Harvard graduates, or a teaching staff of PhDs only. If the decision is made in order to enhance the prestige of the building, firm, or school, and not because of animus due to a personal characteristic or trait (one’s education), then it’s legally okay.

So, would Harsch have a plausible argument that that refusing to renew the church’s lease would be an economic decision?

Suppose Harsch had a convincing case that the value of its shopping center would suffer due to protests against the church. The problem with that argument is that Harsch has already announced its motives for its planned non-renewal: vehement disagreement with Verity’s teachings. A court could very well frown at this pivot, viewing it as a disingenuous attempt to justify what’s really an ideological decision—and one that runs afoul of the Unruh Act.

That’s the thing about civil rights laws: They protect all kinds of people and all kinds of positions.

What About Federal Law?

This article has examined the Verity Baptist Church situation in light of California’s Unruh Act. But what about federal law? A portion of The Civil Rights Act of 1964 (as amended in 1991) gives all persons the same rights to enter into contracts as white persons enjoy. (A lease is a contract.) (42 U.S. Code Section 1981.) This portion of the Act protects against race discrimination only. Arguably, a commercial landlord who refused to rent to an applicant because of the applicant’s race would run afoul of this provision. The federal law would not apply to the situation discussed here, because the landlord’s announced motive involves religion, not race.

Consult With a Lawyer

Commercial landlords may well have questions about the legality of their leasing criteria—are they risking a civil lawsuit under federal or their state’s laws? Similarly, tenants may want to know whether a landlord’s leasing decisions are legitimate, or mask an illegal, discriminatory motive. To get answers, you’ll need to consult with a lawyer in your area who has experience with business law and commercial leasing in particular.

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