A federal directive meant to root out fraud in housing programs has instead handed landlords and public housing authorities a legal puzzle with no clean solution. Nearly 200,000 tenants are now subject to new immigration status checks under a mandate from the U.S. Department of Housing and Urban Development, and property owners across the country are discovering that following the rule can expose them to the very lawsuits it was meant to prevent.
Edward Susolik, President and Senior Partner at Callahan & Blaine, PC, was recently featured in GlobeSt.com discussing the legal fallout landlords now face from this HUD mandate. As one of the country’s most experienced business litigation attorneys, Attorney Susolik brought his perspective on how a policy built to enforce eligibility rules can, in practice, put property owners in violation of federal fair housing law.
What the New HUD Directive Requires
Since mid-December 2025, HUD has required landlords and public housing authorities to submit detailed information verifying tenants’ citizenship and immigration documentation. HUD reaffirmed the demand in a January 23, 2026, letter that gave recipients just 30 days to comply. The directive traces back to a February 19, 2025, presidential order instructing HUD to preserve federally assisted housing benefits for United States citizens and legally qualified noncitizens.
As part of enforcement, HUD introduced a new Enterprise Income Verification system to collect eligibility data. The agency has since reported that nearly 200,000 tenants require verification, roughly 25,000 deceased individuals remain enrolled in housing programs, and about 6,000 noncitizen tenants have been deemed ineligible. HUD Assistant Secretary of Public and Indian Housing Ben Hobbs called the effort a step toward eliminating waste and prioritizing resources for eligible families.
Why Compliance Puts Landlords at Risk
Mr. Susolik explained to GlobeSt.com that the directive “puts landlords in a truly impossible position.” Verifying eligibility is now required, but the same review process can create separate legal exposure. According to Ed, reporting through the EIV system “creates a discrimination risk and a huge legal problem,” since any additional documentation request or adverse action taken based on those findings can trigger a Fair Housing claim.
He outlined several specific areas where landlords face potential liability, including the following.
- Discrimination claims: Requests for extra documentation based on immigration status can trigger Fair Housing Act violations.
- Wrongful eviction disputes: Acting on incomplete or unclear HUD guidance can expose landlords to eviction-related litigation.
- Breach of lease issues: Terminating a tenancy after occupancy has already begun may conflict with existing lease obligations.
- Repayment liability: If HUD later determines a deceased tenant was ineligible and demands repayment, landlords who relied on HUD’s own verification systems may be caught in a dispute over who bears responsibility.
Ed also pointed out that HUD has not clarified what “corrective actions” actually require, leaving landlords unsure whether the agency expects updated paperwork or outright terminations. He called that ambiguity “absolutely dangerous,” since landlords risk sanctions for inaction but lawsuits for acting too aggressively. As Ed put it, “there really is no safe space for good-faith compliance in this mess.”
A System Built on Conflicting Rules
The core problem is that meeting one HUD requirement tends to mean violating another, creating a catch twenty-two. “The most frustrating aspect of this for my clients is that satisfying one of these requirements directly violates another,” he said. “It is the opposite of a win-win. Legally, it is lose-lose all around.” For landlords and housing authorities trying to comply in good faith, that contradiction leaves little room for error and even less room for confident decision making.
Trusted Litigation Counsel for Complex Compliance Disputes
This kind of conflict is exactly where experienced insurance litigation and business litigation counsel becomes essential. Property owners facing HUD compliance disputes, Fair Housing claims, or repayment demands need attorneys who understand how competing federal obligations intersect and who can build a defense strategy before a dispute escalates into a courtroom battle.
At Callahan & Blaine, PC, our attorneys have collectively handled complex litigation matters for more than 40 years, including the largest jury verdict in Orange County history. Ed has personally handled thousands of insurance and business disputes over more than three decades and has been recognized among the Top 100 Super Lawyers in Southern California every year since 2009. His continued visibility in respected industry publications like GlobeSt.com reflects the same depth of experience our firm brings to every client matter. Contact us to submit your potential case and learn how Callahan & Blaine, PC can protect your interests.
