Changing 55 and Older Status and Community Rules

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Question: A landlord changed the status of the community from "Family" to "55&Older" in June. Management did not change the rules and regulations. However, they did advertise the community as “55&Older”; identified that status in the community’s Application Criteria; and have met the requirements of the "80/20 Rule". Now the community owner is changing the rules. One of the many rule change includes altering the status of the community from "Family" to "55 & Older". It is likely that the residents will have enough votes in the petition to vote down the rule changes. Where does this leave the community’s "55 & Older Status"? Does that status actually need to be in the rules?

Answer: I believe the rule change is essential. The reason is that it is the primary document (along with the rental agreement) that defines how the park is to operate under a 55+ regime. Here is a brief summary of how these conversions should occur:
Currently, in order to qualify for the 55+ exemption under the Fair Housing Amendments Act of 1989 (“FHAA”) and the Housing for Older Persons Act (“HIPA”) of 1999, a community must comply with the following requirements:
1. Be intended and operated for persons age 55 or over. This intent can be met by such things as (1) The manner in which the community is described to prospective residents; (2) Advertising designed to attract prospective residents; (3) Lease or rental provisions; (4) The written rules and regulations; (5) Consistent application of the rules, regulations and procedures; (6) Actual practices; and (7) Publicly posting statements describing the facility as a 55+ community. The age verification procedures must be updated every two years. This means maintaining a complete file on each space, including with the tenant application updated information, circulated every two years, confirming the names and ages of all persons who are currently residing in the home.

2. Have at least one person who is 55 years of age or older living in at least 80% of its occupied units. This 80/20 rule is critical. Generally, communities strive to be over 80%, since falling below 80% means immediate disqualification. Does this mean that the 20% margin must be reserved for families with children? The answer is “No.” In fact, a 55+ community may strive for 100% occupancy by persons age 55 or over. Does it mean that community management must accept otherwise qualified age 55+ applicants when the second or subsequent person occupant is 18 years of age or older? Again, the answer is “No.” If desired, the community may increase the age requirement for the second or subsequent occupant to 25 years, 30 years, or even 55+ years. Similarly, the community may impose a more restrictive minimum age requirement than 55. However, it is important for park owners and managers to make sure that all such age/occupancy requirements be properly reflected in the community’s Rules and the Statement of Policy – and be consistently applied.

3. Publish and adhere to policies and procedures that demonstrate an intent to be operated as a 55+ community. This requirement is fairly self-explanatory. The community must make sure that in all that it does, from its advertising, rules, rental agreements, and all other policies, it always hold itself out as a 55+ facility.

4. Comply with HUD age verification of occupancy procedures to substantiate compliance with the requirement that 80% of the facility be intended to be occupied by at least one person age 55 or over. The law provides that the following documents are considered reliable for such verification: (1) Driver’s license; (2) Birth certificate; (3) Passport; (4) Immigration card; (5) Military identification; (6) Any other state, local, national, or international official documents containing a birth date of comparable reliability or; (7) A certification in a lease, application, affidavit, or other document signed by an adult member of the household asserting that at least one person in the unit is 55 years of age or older.
Today, if the community can meet the HOPA requirements in all respects (not because it discriminated in getting there, but simply by attrition of family occupants and the influx of more 55+ residents), it should be permitted to do so. The process would be fairly simple for those communities that exceed the minimum 80% floor (i.e. at least one occupant age 55 or over): Implement a rules change to conform with the 55+ laws, combined with new published policies and age verification procedures, which confirm the community’s 55+ status.
One caveat: Even though the Oregon landlord-tenant law does permit rules changes to implement material modifications in the parties’ bargain, there is a risk of possible argument by families in the community, complaining that they are now limited in the pool of available buyers for their homes. However, this risk can be remedied by “grandfathering” those family residents in, thereby permitting them to sell their homes to other families. This assumes, of course, that by doing so, the community would not jeopardize its 80%-20% ratio.
Before proceeding down this path, park owners are urged to contact their own legal counsel familiar with the FFHA and HOPA for advice and direction.