The U.S. Department of Housing and Urban Development (HUD) has changed course on the statute of limitations applicable to Fair Housing Act (FHA) design and construction claims. In its August 31, 2026, internal guidance memorandum, HUD rejected its longstanding adoption of the "continuing violation" theory with regard to complaints alleging violations of the FHA's accessibility requirements for new multifamily housing. Instead, HUD now contends that an alleged failure to design and construct a covered multifamily dwelling in compliance with the FHA is a "discriminatory act" that ends upon completion of construction, as signified by the issuance of an initial certificate of occupancy. As a result, HUD will treat administrative complaints alleging design and construction violations as untimely unless filed within one year of the issuance of the property's initial certificate of occupancy.
Why It Matters
HUD's new one-year limitations period trigger has generated most of the attention, but the more significant development may be HUD's rejection of the longstanding "continuing violation" theory for "design and construction" complaints. Courts have long been divided over whether FHA design and construction claims accrue upon completion of construction or remain actionable as long as the property is offered for sale or rent and the alleged accessibility deficiencies remain uncorrected.
HUD has now firmly endorsed the former position. According to the agency, the alleged violation is the failure to properly design and construct the property, and that conduct ends when construction is completed, as evidenced by issuance of the certificate of occupancy. The continued existence of an allegedly inaccessible feature does not create a new violation or extend the limitations period, according to HUD's new interpretation. Under this interpretation, the original design and construction team does not remain liable for FHA accessibility violations indefinitely and can expect that administrative complaints filed with HUD will be considered untimely if filed more than one year from completion of construction.
Although HUD's memorandum does not have the force of law and does not bind federal courts, it provides additional support for defendants arguing that FHA design and construction claims accrue upon completion of construction rather than constituting a continuing violation. If embraced by more courts, that approach would provide greater certainty for developers, architects, contractors, and others involved in the original design and construction of multifamily housing by establishing a definitive endpoint for potential liability.
Impact on Private Litigation
The guidance's immediate effect is limited to HUD administrative complaints. Yet, most FHA accessibility lawsuits today are brought directly in court by private plaintiffs, advocacy organizations, or testers rather than through HUD's administrative process.
The FHA provides a separate two-year statute of limitations for private lawsuits, and courts remain free to interpret the statute independently. As HUD itself acknowledges, the memorandum was issued against the backdrop of the Supreme Court's decision in Loper Bright Enterprises v. Raimondo, which reaffirmed that courts, not agencies, decide questions of statutory interpretation. Accordingly, the memorandum neither binds courts nor alters existing judicial precedent.
Nevertheless, HUD's revised position strengthens the argument that FHA design and construction claims accrue upon completion of construction rather than constituting an ongoing, "continuing violation". Defendants facing stale design and construction claims can cite the memorandum as persuasive authority in support of statute-of-limitations defenses in future litigation. If adopted by additional courts, that approach would provide greater certainty for developers, architects, contractors, and others involved in the original design and construction of multifamily housing by establishing a more definitive endpoint for potential liability.
Relief for Subsequent Owners
The memorandum also delivers welcome news for owners and investors that had no role in a property's original design or construction. HUD states that the FHA's design and construction requirements apply to those responsible for the original design and construction and do not create an ongoing obligation for subsequent owners to remedy historical violations.
This announcement does not represent a change in HUD's position regarding uninvolved subsequent-owner liability for FHA design and construction issues. HUD makes clear in the guidance memorandum, however, that it will no longer require uninvolved subsequent owners of covered multifamily dwellings to undertake costly accessibility retrofits simply to obtain HUD financing. The agency specifically criticized its prior practice of requiring owners with no legal responsibility for the original design or construction to correct alleged FHA violations committed by others.
For many multifamily owners and investors, that change may be every bit as important as HUD's new statute-of-limitations position.
Key Takeaways
- For HUD administrative complaints, the clock now starts running when construction is completed, not when an accessibility issue is discovered or corrected.
- HUD administrative complaints alleging design and construction violations must be filed within one year of the initial certificate of occupancy
- HUD has formally rejected the "continuing violation" theory for FHA design and construction claims
- Although courts are not bound by HUD's interpretation, the memorandum gives defendants additional support for statute-of-limitations defenses in private litigation
- HUD has indicated that uninvolved subsequent owners should not be required to correct alleged design and construction violations committed by others as a condition of obtaining HUD financing
- HUD's new guidance has no effect on FHA design and construction enforcement actions brought by the Department of Justice, which has, in the past, vigorously advanced the "continuing violation" theory of limitations as part of its "pattern and practice" FHA litigation
Bottom Line
HUD's new guidance is about more than a one-year filing deadline. By rejecting the continuing violation theory and endorsing the view that design and construction claims accrue upon completion of construction, HUD has strengthened the argument that FHA design and construction liability has a definite endpoint. While courts will ultimately decide whether to adopt that position, the memorandum provides additional support for statute-of-limitations defenses in private litigation and signals a significant shift in HUD's treatment of uninvolved subsequent owners seeking HUD financing.
For more information about HUD's new guidance or further analysis regarding its potential impact on FHA design and construction claims, private litigation, or multifamily ownership and financing, please contact Theresa L. Kitay, Catherine A. Karczmarczyk, or any member of Baker Donelson's Fair Housing and Accessibility Group.