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The Question: What Should You Do?

1. Nothing, it's obvious that her complaint is merely a ploy to get around your no-pets policy.

2. Send her a warning that she's in violation of your community rules and that she must remove the dog immediately or face eviction proceedings.

3. Contact your attorney to determine how you should respond to the complaint.

The Correct Answer: C

If you receive notice of a formal fair housing complaint filed against your community, it's best to contact a fair housing attorney to oversee your investigation, advise you on the proper response, and communicate with the HUD investigator on your behalf.

Wrong Answers Explained:

A. The case won't go away if you ignore the notice and ensuing HUD investigation.

B. The FHA considers retaliation to be a separate offense, which means that you could be found liable for damages or penalties for retaliation, even if the initial discrimination claim is ultimately found to be groundless.

WHAT DOES THE LAW SAY?

The Fair Housing Act (FHA) bans housing discrimination based on race, color, religion, sex, national origin, disability, and familial status.

There are two ways to prove a fair housing violation, Williams explained. The first and most common is to show intentional discrimination-what's known as disparate treatment. In these cases, the issue is whether people in similar situations were treated differently, and if so, whether that different treatment was due to that person's protected category.

The second is what's known as disparate impact. It's used to challenge a housing policy that on its face is neutral-that is, it doesn'tappear to favor one protected category over another-but when the policy is applied, it has a significantly negative impact or effect on one protected category. These cases are always based on statistical analyses using either national or local data, Williams said. It's this second category that was the focus of HUD's new guidelines on criminal background checks.

To illustrate why the use of criminal screening policies have been causing such concern, Williams cited a recent study showing racial disparities in the criminal justice system. According to the study, one in every three black males born today can expect to go to prison at some point in their lives; this compares with one in every six Latino males, and one in every 17 white males. "Racial minorities are more likely than white Americans to be arrested," according to the report. "Once arrested, they are more likely to be convicted; and once convicted, they are more likely to face stiff sentences." The conclusions of this and other similar studies have resulted in a bipartisan effort to improve the criminal justice system to remove this apparent racial bias.

Overview: HUD General Counsel Announcement

In a nutshell, HUD's new guidelines explain how the agency will evaluate fair housing claims based on the disparate impact that criminal background screening policies may have on racial and ethnic minorities. Williams explained the three-step process:

Step 1: The plaintiff must prove that a community's neutral criminal history screening process has a significant disparate impact on African Americans and Hispanics. The plaintiff could be an individual, an advocacy agency, a testing agency, or an enforcement agency like HUD or the Justice Department. To satisfy this step, the plaintiff needs statistics showing that African Americans are arrested and convicted of crimes at a significantly higher rate than whites using local or national statistics. In most cases, it's not difficult to provide these statistics. If the evidence ends, the plaintiff wins.

Step 2: Then it's up to the housing provider to identify a substantial, legitimate, nondiscriminatory business interest accomplished by the policy. One obvious reason is to improve safety and security, but HUD warns that bald assertions based on generalizations and stereotypes aren'tenough. It takes more than a personal preference to screen out all ex-offenders to justify a criminal screening policy-you'll need some statistical support for your policy. If the evidence ends, the housing provider wins.

Step 3: In the final step, the plaintiff gets another chance to win the case with proof that a different policy would meet the interests of the housing provider but do so with a much less discriminatory impact. This is where the content of your criminal history screening policy can be challenged unless the policy is narrowly tailored to meet the ultimate purpose of the policy-to protect safety, for example-without denying housing to many applicants with a criminal record who may not actually pose a risk to your property.

The bottom line: To defend your policy, you'll need to show that it accurately distinguishes between criminal conduct that indicates a demonstrable risk to residents' safety-and conduct that does not. For that, you'll need to consider statistics about recidivism-that is, the likelihood that a person convicted of a particular crime in the past is likely to be re-arrested for another crime in the future.

As an example, Williams cited a study showing that the likelihood of re-arrest following release from prison goes down over time. Although nearly half of the subjects were rearrested, it was much more likely to happen during the first few years after release. By the end of the eight-year study, arrest incidents dropped down to the point where the percentage of those re-arrested was close to anyone else-including those without a past criminal record.

Another example was a report on the kinds of crimes most often committed after release from prison. In that study, the most common felony resulting in a re-arrest was assault-at 24 percent-and the least were rape and homicide, at less than 2 percent each.

You don't have to become a criminal justice expert as long as you understand that disparate impact cases rise and fall on statistics, Williams said. These and many more studies are available to plaintiffs when challenging criminal history policies, so you should take them into account when reviewing your own policies.

TIME OUT!

Statutory Exemptions from Fair Housing Liability

When evaluating your criminal background screening criteria, consider the "statutory exemptions" from fair housing liability:

Manufacturing and distribution of drugs: Applicants with criminal convictions related to manufacturing and distribution of controlled substances as defined in Section 102 of the Controlled Substances Act can be excluded. Keep in mind, however, that a large percentage (30 percent of the entire U.S. prison population, according to FBI reports) has some type of criminal history based on drug offenses, so you should be careful when it comes to convictions for less serious offenses, such as drug possession.

Sex offender registries-lifetime registrants: Rejecting a registered sex offender (especially those who are required to register for life) is stated as a statutory exemption under the HUD tenant selection plan, Richer said. Many market-rate communities also accept this practice since there is a significant financial, safety, and reputational risk.

But beware: Sex offender registry websites in California, Nevada, and New Jersey have clauses prohibiting use of the sex offender registry information for housing eligibility. Even in those states, Richer believes that federally funded housing under HUD programs would probably still be eligible to use state registry information, but you should check with your attorney to confirm your company's position.

This is the first of four articles. Look for 'part 2' next week on MHCO.ORG.

It's also important to realize that there isn'tone source for information on all federal and state criminal records, said Richer, explaining what she considers to be the "biggest myth in resident screening." There is no single "national" database of criminal records available to screening company providers. In fact, even the FBI database doesn'tcontain all criminal records from every court or state criminal repository in the country.

The way most professional screeners obtain data is either to use a third party or gather their own criminal records from state, county, and local sources, Richer explained. Either way, there are states that restrict the release of electronic criminal records, and some that omit personal identifiers, like full name or date of birth, which makes the process of matching records impossible.

The bottom line: It's difficult to gather criminal records because each source has a different way of cataloguing records. Those differences can make it challenging for both screening and housing providers to conduct criminal records screening.

Understand Key Terminology

Before getting started, you should understand some key terms used in criminal record screening. If you review criminal records as part of your application process, being able to clearly understand the disposition of the record is critical in how you evaluate prospects for housing, Richer said.

Arrest: This word can be confusing or misinterpreted in the context of resident screening. Records of "arrest" refer to when a person is "picked up" or "cuffed" for a criminal event. He or she may be taken into custody (typically to a local police station), but a case has yet to be filed in a court. Richer said that most screening companies don't include records of arrest in their criminal background service.

Pending case: Once sufficient evidence has been presented, typically the prosecutor will file charges. The charge filed opens a case at the appropriate court and the case remains pending until a final disposition, such as guilty or dismissed, has been rendered. HUD's new guidelines warn against making housing decisions based on arrests, so it's important to distinguish between arrests and charges filed (that is, pending cases).

Disposition: Disposition refers to how the case was resolved in the criminal justice system. Any criminal record that isn'tpending would have some type of disposition.

Deferred adjudication: Some states use the term "deferred adjudication," which is a criminal record showing conviction status, but the court had "deferred" the conviction to allow the offender to participate in some type of community service program. If completed, the conviction status would be removed; if not, the conviction status would stand.

Conviction: A record of conviction means the case resulted in the offender either pleading guilty or being found guilty.

Look-back period: This refers to the amount of time a company will consider when evaluating criminal histories. You may have different look-back periods, depending on the nature and seriousness of the crime.

Exit from incarceration: The date of exit from incarceration, parole, or release date if the sentence included jail time.

TIME OUT!

What You Should Know about the FCRA

The Fair Credit Reporting Act (FCRA) is the main compliance law for all screening providers (known as consumer reporting agencies), Richer explained. This federal law provides guidance and obligations for screening providers, users of consumer reports (including housing providers), and consumers (including housing applicants).

Once the criminal records are obtained, screening providers can only deliver the information in accordance with FCRA requirements. Here are some key things to keep in mind about the FCRA:

Permissible purpose: To gain access to any consumer report (including criminal records), companies must certify a permissible purpose under the FCRA. For housing providers, the one that typically applies is "a legitimate business transaction initiated by the consumer." You also may have the written consent of the consumer.

Obsolescence reporting standards: The FCRA defines how long a record can be delivered on a consumer report. The federal FCRA allows for records of conviction to display indefinitely; records of non-conviction (pending, deferred adjudications, and the like) are limited to seven years.

State law limitations: There are 11 states with different reporting standards from the federal FCRA. Most limit records of conviction to seven years, but some have different rules. For example, Kentucky limits records to only convictions, but keeps the time frame the same as the federal FCRA. And California, New Mexico, and New York only allow for records of conviction and limit the time to display to seven years.

Accuracy requirement: Consumer reporting agencies must have reasonable procedures to ensure maximum possible accuracy. For example, if a criminal record does not contain enough information to match to an appropriate consumer (typically full name and full date of birth), then it shouldn'tbe delivered in a consumer report.

Adverse action: If you determine that an applicant isn'tsuitable for housing, or you decide to offer housing with a conditional offer, based on the consumer report, then a "statement of adverse action" is required under the FCRA.

Disclosure and dispute: The statement of adverse action directs the applicant (the consumer) to the "source" of the consumer report (the screening company) to find out what information was delivered to the housing provider (the user) and dispute any inaccurate or non-updated information. This is a free service to consumers and is required under the FCRA.

UPDATE: Thanks to John VanLandingham for reminding me that pursuant to the recently enacted Senate Bill 970, ORS 90.303 was amended to provide that when evaluating an applicant for tenancy, the landlord may not consider: (a) A criminal conviction for possession of marijuana; nor (b) Possession of a medical marijuana card, or status as a medical marijuana patient. This new law becomes effective on January 1, 2020. ~ PCQ

Answer.  This applicant seems to believe he makes the rules. Please remind him otherwise. Regardless of the guest policy, you know he has a “lengthy criminal record” so you need to exercise extreme care in permitting him into the park under any circumstances.  

I do have some questions:

• It is unclear to me whether all his criminal history is over 10 years old, or just some of it. If all of it is over 10 years ago, the cuts in his favor.
• You did not describe the nature or severity of the crimes. Are they misdemeanors or felonies? Repeat offenses? 
• Crimes against persons or property? The former warrant more careful attention.
• Lastly, and perhaps most critical to any analysis is whether this person is a member of a protected class. Ex-cons are not, per se’ a protected class. If he is not, there is little he can do from a fair housing standpoint. However, this is not to say you can drop your guard. The main rule-of-thumb to always follow is to be consistent. 

On April 4, 2016, the U.S Department of Housing and Urban Development (“HUD”) issued its “Office of General Counsel Guidance on Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate-Related Transactions” (hereinafter, the “Memo”). The full text of the 10-page Memo can be found here. Not surprisingly, it follows the June 25, 2015 ruling by the U. S. Supreme Court, in the Texas Dept. of Housing vs. Inclusive Communitiescase, which upheld the much-debated concept of “disparate impact” under the Fair Housing Act, as amended (the Act”).   

At footnote 43 of the Memo, the following appears: 

***see Megan C. Kurlychek et al., Scarlet Letters and Recidivism: Does an Old Criminal Record Predict Future Offending?, 5 Criminology and Pub. Pol’y 483 (2006) (reporting that after six or seven yearswithout reoffending, the risk of new offenses by persons with a prior criminal history begins to approximate the risk of new offenses among persons with no criminal record). (Emphasis added.) 

Does this mean that six or seven years is the maximum look-back that landlords can make when screening someone’s criminal background? I submit that for non-violent crimes, this is not an unreasonable review period. But in cases of crimes to the person, and most significantly, rape and child molestation, I agree a ten-year period is not unreasonable. 

However, the Memo is not to be read to say that anyconviction over seven years may not be taken into consideration when screen potential tenants or temporary occupants. Its purpose is to “…issue guidance, mostly by way of examples and prior case law, in how the use of criminal history during the tenant-screening process, may, and may not, trigger a disparate impact result.”  

 Here are some tenant screening tips I’ve suggested in past articles:  

1. Beware of testers, calling over the phone and asking if you will rent to persons with a criminal background.Be careful about answering these blind calls with a “yes” or “no”. Make sure callers understand that no rental decisions are made in advance of reviewing all relevant background information, including a criminal background report. Encourage the caller to either come to the office and pick up the necessary paperwork, or if they prefer, send it to them at their provided address.  

1. Ultimately, landlords should plan on making adjustments in their rules and application process.   

1. Do not have a rule or policy that treats an arrest, with no conviction, the same as a conviction.If you currently have such a rule, it should not be enforced. 

1. Do not have a blanket guideline providing, for example, that conviction for any crime is an automatic denial. 

1. Be sure that all rules or policies concerning criminal records are uniformly enforced – no exceptions.  However, note No. 7 below. You should avoid a policy saying that all persons with a felony are automatically disqualified. There is a world of difference between an ex-felon who served time for embezzlement ten years ago and has been a contributing member of society ever since vs. an ex-felon who served time for aggravated battery, and has been in and out of jail for similar violent crimes over the past five years. 

1. If possible, evaluate all other rental history, such as prior tenancies, employment, credit, income and affordability, before even going to the results of a criminal background check. If the prospective tenant does not pass one or more of these other criteria, then the rejection can be based on that, rather than a criminal background report, thus avoiding the disparate impact issue entirely. 

1. In evaluating an applicant’s criminal history, do not use a “one size fits all” approach. There are several gradations of severity. Additional issues need to be addressed before deciding to reject a prospective tenant based upon criminal history. For example: 

·     How long ago was the conviction? (A single conviction over 6-7 years old, in most cases should probably not be used as the basis for a denial (excluding registered sex offenders, or those convicted of violent crimes). 

·     What has the person been doing since their release? 

• Has the person been convicted once, or on multiple occasions? 
• What was the nature and severity of the crime?  

1. Note that according to the Memo, a refusal to rent to an applicant who has a conviction for one or more drug crimes involving the manufacture or distribution (notmere possession) of a federally defined controlled substance ispermissible and not subject to a disparate impact claim.In other words, a landlord or manager may legally base the refusal to rent based upon a conviction for manufacture or distribution is nota violation of the Act, based upon disparate impact. Per the Memo: “Section 807(b)(4) of the Fair Housing Act provides that the Act does not prohibit ‘conduct against a person because such person has been convicted … of the illegal manufacture or distribution of a controlled substance as defined in section 102 of the Controlled Substances Act (21 U.S.C. 802).’” 

1. ORS 90.303 (Evaluation of Applicant) addresses some of the same issues as in the Memo, but not all of them. And where there is similarity, Oregon law does not go as far as the Memoon the issue of criminal records and disparate impact. Oregon’s statute provides: 

(1) When evaluating an applicant, a landlord may not consider an action to recover possession pursuant to ORS 105.105 to 105.168(Oregon’s eviction statutes – PCQ)if the action: 

       (a) Was dismissed or resulted in a general judgment for the applicant before the applicant submits the application. This paragraph does not apply if the action has not resulted in a dismissal or general judgment at the time the applicant submits the application. 

      (b) Resulted in a general judgment against the applicant that was entered five or more years before the applicant submits the application. 

(2) When evaluating the applicant, a landlord may not consider a previous arrest of the applicant if the arrest did not result in a conviction. This subsection does not apply if the arrest has resulted in charges for criminal behavior as described in subsection (3) of this section that have not been dismissed at the time the applicant submits the application. 

(3) When evaluating the applicant, the landlord may consider criminal conviction and charging history if the conviction or pending charge is for conduct that is: 

     (a) A drug-related crime; 

     (b) A person crime; 

     (c) A sex offense; 

     (d) A crime involving financial fraud, including identity theft and forgery; or 

     (e) Any other crime if the conduct for which the applicant was convicted or charged is of a nature that would adversely affect: 

     (A) Property of the landlord or a tenant; or 

     (B) The health, safety or right to peaceful enjoyment of the premises of residents, the landlord or the landlord’s agent.  

1. Landlords should notassume that compliance with ORS 90.303 means that a denial of tenancy automatically avoids a disparate impact claim.  Landlords and managers should be extra-cautious in this minefield, since where federal law is more restrictive (i.e. burdensome on landlords), it will likely pre-empt state law.  Thus, compliance with state law, but non-compliance with federal law, can still result in a disparate impact claim under the Fair Housing Act, as amended. 

Here are some considerations to keep in mind: 

1. The Memo and ORS 90.303 bothprohibit screening applicants for arrests, regardless of the conduct that led to the arrest; 

1. ORS 90.303 says that an arrest which has not been dismissed but is still pending (i.e. a conviction is still possible) may be considered in tenant screening. The HUD Memo does not address this issue – so we don’t know what the feds would say. Accordingly, it may be prudent to take a more balanced approach in these situations. For example, rather than having a blanket policy that a tenant will automatically be rejected if their charge is still pending, landlords and managers should evaluate the matter based upon (i) When the matter will be resolved, e.g. a week, a month, or a year? (ii) What was the charge? (iii) If convicted, would the applicant automatically be denied? As noted above, the whole issue of criminal background information is an element of the application process that need not be fully vetted, if, regardless of the crime, its severity or recency, the person would fail the application process on other grounds.If so, there is no need to rely upon a landlord’s criminal background policy at all. However, a word of caution here: Be prudent when selecting a basis for denial. Using a weak reason can be viewed as pretextual if the applicant is a member of a protected class. In other words, beware of using a credit basis for denial if it is “iffy” and exclude the criminal background basis. In these cases, landlords and managers should consult legal counsel; it may be best to use both bases.  

1. ORS 90.303 says that a landlord may consider a conviction for certain conduct, generally relating to threats of violence, drugs, sex, or property damage, which would indicate risks to fellow tenants or the landlord. However, the HUD Memo is broader and more subtle (i.e. it demands an evaluation beyond a one-size-fits-all rejection policy). In short, do not rely solely on ORS 90.303, to the exclusion of the more balanced approach demanded by the Memo. 

1. Unlike the HUD Memo, ORS 90.303 does not address how long ago the conviction occurred or require an evaluation of what the applicant had been doing since the conviction. (e. g. evidence of rehabilitation). In the past, earlier Landlord-Tenant Coalitions could not reach agreement on whether to use a five- or seven-year standard in the statute3, nor whether multiple convictions should be dealt with differently than single ones. Accordingly, our statute is silent on this issue.  

Conclusion.  Landlords could be forgiven for feeling they are caught on the horns of a dilemma. If they follow Oregon statutes, it may not be enough. And while it may be sufficient to follow federal law, today that requires a “disparate impact” analysis, which, at best, is a shifting and nuanced set of “guidelines” based upon anecdotal information.  

Perhaps most unsettling is the fact that today, a landlord’s good faith effort to comply with the tenant application process is not enough. Instead, unintentional discrimination, now known under the more benign title, “disparate impact”, has become a basis for Fair Housing claims. Yet unlike statutes, which can provide distinct guidance, disparate impact is more of a conceptthan a law, since it ignores one’s intent, and looks instead to the perceived long-term consequences of certain actions based upon empirical statistics, academic writings, analysis, surveys, demographics and footnotes. Is this something landlords can or should be expected to fully appreciate and understand when evaluating a person for tenancy?  

So, to your two questions:

1. Can you still deny the temporary occupant based on a criminal record from 10 years ago, I would say yes, if the crimes were violent/sexual in nature, were repeated, and during the intervening years, the applicant had not exhibited any stability or rehabilitation. (Note, if the applicant is a member of a protected class, you probably should consult with your lawyer first.)
2. Can he “couch surf”? If your decision is to decline him as a temporary occupant, using the above screening criteria, you certainly don’t want him in the community under any other category. Just say No and let any residents who would aid him in this work-around know that.

Remember this: In the final analysis the decision is easy. Which would you rather defend against: (a) an angry ex-con, or (b) the parents of a child harmed by the ex-con you allowed into the community because he tried to make you bend to his rules?

UPDATE: Thanks to John VanLandingham for reminding me that pursuant to the recently enacted Senate Bill 970, ORS 90.303 was amended to provide that when evaluating an applicant for tenancy, the landlord may not consider: (a) A criminal conviction for possession of marijuana; nor (b) Possession of a medical marijuana card, or status as a medical marijuana patient. This new law becomes effective on January 1, 2020. ~ PCQ

Remove any ban based on arrests. The first thing to do is to check whether your policy includes any ban based on arrest records, Richer said. HUD's guidance clearly states that records of arrest should not be used to deny housing or terminate a lease. There may be circumstances where a criminal event has occurred and the arrest record might justify further research into the behavior, but an arrest alone can't be used to deny housing eligibility.

Include statement of the purpose served by criminal screening. When documenting your resident selection policies, include a statement that the policies serve to reduce risk to your communities and residents. As you review your policies and make adjustments, be prepared to show that your policies are set to improve your communities' and residents' safety, and that the policy is substantial, legitimate, and has no discriminatory interest.

Remove blanket/generalized felony bans. Check whether your policy includes any "blanket" exclusions for all convictions or all felonies. Those policies are likely to be challenged by disparate impact claims.

Determine most serious and violent crimes. Replace any generalized felony or conviction bans with only the most serious or violent crimes that accomplish your goal of reducing risk. These may include both felony and misdemeanor crimes as long as consideration has been given to the nature of the crime.

Include look-back periods and exit from incarceration. Keep recidivism rates in mind when setting look-back periods. Look-back periods may be based on the conviction date or the date of exit from incarceration.

Address applicants with multiple unrelated violent and nonviolent felony convictions. A pattern of criminal activity may present a risk to your community (especially if it's recent), so you may want to consider the number of criminal events within a period of time. The events may be unrelated, but a pattern of crimes may show a propensity toward risky behaviors over a short period of time or within a recent period of time.

Remember the FCRA. Add language that informs applicants that when criminal records are found, they may have an opportunity to appeal and provide circumstances surrounding the criminal events.

As you review your policies and make adjustments, keep in the back of your mind the goal you have-to demonstrate that your policies are set to improve your community's and resident's safety, and that the policy is substantial, legitimate, and has no discriminatory interests, Richer says. You will also want to consider if there is any less discriminatory practice that could achieve the same goal.

And don't forget, your policies may come under scrutiny from testers, she warned. Take the time to train your staff properly, and for them to properly communicate your policy regarding criminal records. You want to be sure your policy isn'tbeing communicated in an abbreviated fashion, and that your staffers aren'tdiscouraging applicants with criminal histories from applying to your communities.

Appeals of Rejections/Individualized Assessments

In addition to developing a complex policy that includes a graduated tier of look-back periods that relate to the seriousness of the crimes, Williams said that another way to defend your criminal history policy is to include in the policy a description of an applicant's right to appeal a rejection.

Each rejection should inform the applicant that she has a right to obtain a copy of the criminal record on which the rejection is based. If you use a third-party screening company, these records should be provided by your screening company.

Decide who in your company will conduct these appeals, Williams suggested. It often proves useful to assign appeals to the same person or persons so they can develop some expertise in how to conduct these hearings, including the factors that prove to be the strongest to indicate a rejection should be maintained or reversed.

Williams often uses the term "individualized assessment" when reviewing whether an applicant is able to explain mitigating circumstances that may change the original determination to reject an application due to a criminal record. There are a number of factors that can be considered during the appeal, including:

• The seriousness of the criminal offense;
• The relationship between the criminal offense and the safety and security of residents, staff, or property;
• The length of time since the offense, with particular weight being given to significant periods of good behavior;
• The age of the household member at the time of the offense;
• The number and nature of any other criminal convictions; and
• Evidence of rehabilitation.

If you are holding an apartment, this process obviously needs to be completed as soon as possible, so it's a good idea to put time limits on all aspects of an appeal, Williams said. In conventional housing, if it is going to take more than a week or two for the hearing and decision to occur, Williams said it makes sense to move forward with leasing the apartment to another applicant. In federally funded housing, the result may be different due to HUD's appeal requirements.

There has not been a defined time frame by HUD, so Richer said it will depend on your housing availability and the length of the waiting list. In some cases, it may make sense to hold the apartment for a few days. If the time period expires, the apartment becomes available to another qualified applicant. You could set a reasonable time frame for the applicant to provide the necessary information for your appeal and provide him with the "next available" apartment in the event that the initial time frame expired.

During the presentation, Williams was asked whether this process was taking the housing industry back to a subjective review of the applicant. Those concerns were legitimate, she said. The federal government is asking housing providers to consider whether their criminal history policies reflect a genuine concern for safety or are merely based on generalized stereotypes of the dangers posed by ex-offenders.

While the country works to address difficult problems with the criminal justice system, Williams said that housing providers are tasked to treat applicants with criminal records somewhat similarly to residents who request reasonable accommodations. As you know, these are decided on a case-by-case basis, and companies are developing employees with expertise to make these decisions. Due to the seriousness of this issue, Williams suggested that housing providers devote a similar commitment to administering criminal history screening policies and give applicants an opportunity to explain their individual situations.

Inaccuracies

Question: What happens if a community denies housing based on a screening report that contains inaccurate information about an applicant's criminal history?

Answer: When the denial takes place, Richer explained that it's the community's responsibility as a user of consumer reports under the FCRA to provide the applicant with an "adverse action" notice, which would direct him to the screening company that provided the information to the housing provider.

The applicant has the right to a free disclosure of the contents of the report and to dispute any inaccurate and non-updated information found within the report. The screening company then has 30 days to verify that the information is accurate and belongs to that consumer. If the information can't be verified, it would be removed from the report. The applicant would get a corrected copy of that report and could also request that a corrected version of the report be sent to the original inquirer (the community).

This is one reason for having a very active appeal process, Williams said. If you get the wrong person's record, which does happen occasionally, the appeals process allows the person to come forward and show that that is not his record and it was a mistake, and allow you to undo the rejection immediately.

Look-Back Period

Question: How far back should we go in considering criminal convictions? When should the look-back period start-on the date of conviction or the date the applicants left incarceration?

Answer: Depending on the status of the record (conviction, pending case, etc.), the look-back period date may vary, Richer said. The look-back period could start on the date of release from incarceration, but remember: That information may not be readily available in some states, so it can be challenging to base your look-back period on that particular date. You may want to craft a policy that includes multiple types of dates based on the information available from the criminal source, Richer said.

Every company needs to decide this for itself, Williams said, but you could include the date of conviction, and also the date of release-with the same or lower look-back period. For example, you could set the look-back period to be seven years from conviction of the crime, and three or four years from release from incarceration (or whatever number of years you choose). In states where you may have difficulty getting that data, Williams said that it will be something to work out with your screening company.

Question: How do we determine what is considered a reasonable look-back period?

Answer: To determine a reasonable look-back period for your community, Richer recommends consulting with your legal counsel, your resident screening provider, and perhaps peer communities. Some of the recommended best practices include longer look-back periods for more serious crimes (that would include incarceration) and shorter look-back periods for less serious crimes or misdemeanors. Several AmRent customers have selected up to 20-year look-back periods for very serious crimes, seven to 10 years for serious crimes, and three to five years for less serious crimes.

Question: How would you handle convictions for serious crimes, such as murder or rape, when the recidivism rate is so low, but the danger posed of that low percentage of offenders is extremely high?

Answer: Many housing providers are considering the safety, reputational, and financial risk when making these decisions, Richer said. Although the recidivism rates for murder and rape may be lower than other crimes (according to some statistics), you'll have to determine what legitimate, substantial, and non-discriminatory interest would be achieved with a policy that restricts housing based on the reputational risk of admitting a person with one of these crimes in his past.

It may be prudent to apply a reasonable look-back period that includes incarceration time, Richer suggested. In addition, your individualized assessment process might consider the amount of time since release from incarceration, evidence of criminal events since release, housing and employment history, as well as rehabilitation programs. This particular category has been challenging for many communities to reconcile.

Pending Charges

Question: What should we do if the criminal record shows there are pending charges against an applicant?

Answer: Pending charges are different from records of arrest, but Richer and Williams warned that they still should be handled carefully with respect to the new HUD policy guidance. One option would be to treat applicants with pending charges somewhat similar to the way you would treat them if they had a conviction on those charges. Serious consideration should be given to the risk associated with the criminal offense and the impact to the community. It can get tricky when the charges are not severe, so you should consult with your legal counsel.

FAQ: Rehabilitation Program

Question: If an individual has completed a rehabilitation program, should we allow residency?

Answer: Your company policy might consider rehabilitation program completion as one factor in your individualized assessment process, Richer explained. The completion of a rehabilitation program alone might not be sufficient to mitigate all the risk associated with a particular crime. You might also consider how long ago the crime occurred and if the applicant has committed other related or non-related crimes since the original crime or after the rehabilitation program.

Conditional Approval

Question: Can a criminal background check be approved with conditions-for example, accepting the application, but with a condition that the applicant can't be arrested for that offense during the calendar year?

Answer: Accepting an applicant with conditions is one of the best practices suggested under the HUD policy guidance, Richer said. When considering whether to do so, you'll need to consider how you'll monitor future criminal activity and complete the eviction process once the applicant becomes a resident (all at a cost to you). Richer said you should consult with your legal counsel whether the benefit of this condition outweighs the administrative burden and costs of managing the enforcement.

Postponing Access to Criminal Records

Question: What is the reasoning behind the recommendation to run criminal reports after other screening has been completed?

Answer: The thought process is if you are not "viewing" criminal records until other qualifying criteria have been met (such as credit, rental history, employment verifications, and the like), then you will reduce the number of times that you are disqualifying applicants for housing based on previous criminal histories, Richer said. You are also likely to reduce the frequency of individualized assessments, which are time-consuming, costly, and require judgmental review of the applicant's circumstances surrounding the criminal record.

It was a brutal legislative session that will always be remembered for the passage statewide rent control (SB 608). Unconscionable that the majority party leaves opponents 90 - seconds to testify in opposing significant legislation after unlimited time for panel after panel of 'experts' in support. When in power they all do it - Democrat and Republican - not a pretty thing to watch.

MHCO thanks everyone who made the effort to show up at the Capitol, e-mail legislators, call legislators, attended public hearings or attended MHCO 'lobby day' at the Capitol. You help make our voices heard - we are very appreciative of your efforts and they did make a difference. Thank you!

Before we get to the final Legislature Update of the 2019 Legislative Session here are two quotes to remember as we head into the post 2019 Oregon Legislative wilderness:

Senator Shemia Fagan (D-Portland): "For many renters, for many families SB 608 (rent control) does not do enough or does not come soon enough and those voices are important too and I want to lift those up. 'Street Roots' (a weekly alternative newspaper establish in 1998 that is sold by and for the homeless in Portland)in it's editorial on Senate Bill 608 said, "SB 608 is truly the least we can do. So, legislators should pass it so we have a better benchmark and then we expect them to keep fighting." ... and I agree! (Senate floor speech, February 12, 2019).

Representative Julie Fahey (D-West Eugene & Junction City): "This year, Oregon passed SB 608(rent control), an anti-price-gouging measure that will cap rent increases at about 10%. SB 608 will absolutely help mobile home park residents in Oregon, but I worry that 10% is still too highfor seniors on fixed incomes and low-income Oregonians."(April 29, 2019 District Newsletter).

Final 2019 Oregon Legislative Update (7-1-19)

SB 586C Landlord-Tenant Coalition Bill

Covers 5 issues:

1. Floating home tenancies in marinas: Adds floating home tenancies in marinas to the programs provided by the Manufactured Communities Resource Center of the Housing & Community Services Department - which will necessitate changing its name to include a reference to marinas - and requires that marina landlords, like MH park landlords, register with MCRC and get continuing education credits and pay the annual registration fee. It requires that marina tenants, like MH park tenants, pay the $10 annual special assessment (with their property taxes) that supports MCRC. And it makes other, related changes reflecting the special circumstances of marina living.

2. Sub-metering of water: Clarifies and simplifies the process for landlords to recover for the cost of water/sewer/storm water to encourage more landlords to switch to recovery for that cost other than through the rent. And to promote transparency and understanding by tenants, requires a landlord who wants to change the billing method to first meet with tenants and, for switching to sub-meters, to do a three-month trial billing period.

3. Dispute resolution and enforcement: Current law already provides for voluntary mediation of MH park landlord/tenant disputes through MCRC. The bill will allow the parties to invoke mandatory mediation. It provides that a landlord or tenant may require the other party to participate in at least one promptly-scheduled mediation session regarding most disputes -

with some exceptions - involving landlord/tenant law before the filing of an eviction or other lawsuit. Mediations will generally be performed by the existing network of Community Dispute Resolution Centers. Enforcement: The bill also authorizes a four-year pilot program to provide legal representation to tenants - advice, negotiation, litigation - through an OHCSD grant capped at $100,000 per year. An advisory committee will monitor both elements and report to the 2021 and 2023 legislatures. Both the grant and the advisory committee have four year sunsets, 1/1/2024..

4. Termination of tenancies; noncompliance fees: Improves the process for landlords to require cure of separate and distinct violations of a rental agreement, as consistent with law applicable in apartment landlord/tenant law since 2005, and simplifies and clarifies the termination statute language. Allows landlords to better utilize an existing statute regarding noncompliance fees.

5. Maintenance of trees on MH park spaces: Current law already allows landlords to maintain trees on a tenant's space to prevent a tree from becoming hazardous or from causingdamage or injury, after notice to the tenant. The bill requires landlords, in that notice, to specify which, if any, tree that the landlord proposes to remove, in order to minimize mistaken removals.

HB 2164 A

Extends several tax expenditures for six years: manufactured dwelling park capital gain subtraction, manufactured dwelling park closure credit.

HB 2333 C

Allows option to obtain title, but not registration, from Department of Transportation for recreational vehicle qualifying as park model recreational vehicle and meeting other criteria.

Provides that recreational vehicle having title issued by Department of Transportation does not qualify as structure. Requires owner to surrender Department of Transportation title for recreational vehicle if converting recreational vehicle to use as structure. Makes recreational vehicle converted to use as structure subject to state building code. Requires seller of new recreational vehicle to provide purchaser with written information listing specified living area systems. Requires that information state for each listed system whether items or components comprising system are covered by warranty and, if so, extent and length of warranty. Removes recreational vehicle construction from regulation by Department of Consumer and Business Services. Changes definition of "recreational vehicle."

This legislation will clarify the appropriate titling of park models that are quickly becoming an affordable means for providing housing for people throughout the State of Oregon. There is currently no clear path for the titling of these homes from a governing agency. Without the clear ownership documentation, lenders are reluctant to loan on the units so there is no current financing options for prospective owners/residents.

HB 2896 B

Directs Oregon Housing and Community Services (OHCS) to establish a loan program for nonprofit corporations to support the preservation and affordability of manufactured dwelling parks. Specifies loan eligibility and preservation requirements for loan recipients. Requires OHCS to report to the Legislative Assembly each odd-numbered year. Appropriates $3 million from the General Fund for administration and funding of the program. Takes effect on 91st day following adjournment sine die.

Answer: There are certain facts that are missing from this question. I will supply them and then answer. So, let’s assume the following: (a) This is a periodic (i.e. month-to-month) tenancy; (b) The tenant has moved out of the home and it is now vacant; (c) The rents are not being paid; and lastly, let’s assume that (d) The landlord was to be paid all past-due rent from the sale proceeds. However, before answering the question, however, let me point out a fatal error by this landlord – and many other landlords: They don’t look at the Worst Case Scenario. I’m sure the Storage Agreement adequately covered what was to occur upon sale. But since we have a landlord now asking what happens if the sale does not occur by November 30, I’m led to believe the parties neglected to address (in writing) the possibility of failure. Memo to MHCO landlords: Written agreements with tenants should always address “the exit strategy” – i.e. what protocol kicks in if the home is not sold and not removed by November 30. Without addressing this issue in the written Storage Agreement, we are left to figure out what Oregon law would provide under these facts. Here’s my take: • On December 1, the landlord should contact the ex-tenant and demand that the home be removed. This should be done in writing or e-mail, so it can be used later if necessary. • If removal does not occur promptly, the landlord must rely upon Oregon law. Unfortunately, the law leaves landlords holding the bag if a home is abandoned. • The landlord will have to determine if the tenant will voluntarily waive his abandonment rights, and if not, then he must follow the legal procedure under ORS 90.675. If there is a lienholder on the home, the landlord will have to give them notification under the abandonment law. • If the landlord wants to leave the home on the site and resell it to a new tenant, that option is always available , and probably should be pursued first, rather than going down the abandonment route, which can be costly in time and money. Care should be exercised to properly document such an arrangement, in order to avoid later complaints by the tenant that they were taken advantage of. In Oregon, following the formal abandonment process is the only legal way for a landlord to take control of a manufactured home if the tenant fails or refuses to remove it upon termination of the tenancy.

Answer: Per the Oregon Department of Community and Business Services, “…there is definitely no license for that.”

Comment: The above question supplements the FAQs posted by MHCO regarding the SAFE Act earlier this month. According to the Oregon Department of Community and Business Services (“DCBS”), the Act applies to manufactured community owners who sell homes acquired following abandonment or pre-abandonment. Accordingly, an owner who provides financing by carrying back an installment contract, will have to either become licensed as a Mortgage Loan Originator (“MLO”) or hire - as an employee or independent contractor - a third party MLO to perform the credit component of the transaction.

Answer: First, please understand that Oregon law does not directly deal with this – and neither is it addressed in most rental/lease agreements, including MHCO’s. So my responses are based upon my opinion alone. Until an appellate court rules on these issues – which is unlikely, since most such cases are never appealed - the best we can do is speculate. My answers are in italics below.

1. Do we write a new lease for the remaining resident or keep the old lease with both residents on the lease?

I think I would prefer to see a new lease signed by the remaining resident – even if title remains in both their names. That way, the ex-spouse cannot argue that he or she has a right of occupancy a year or two down the road, when they patch things up, or one moves out and the other moves back in. A new lease would require than any new occupants be qualified all over again. Note that if the lease is changed into the name of the remaining resident, the ex-spouse would certainly have no liability for space rent going forward.

2. Can we legally keep the resident that moved out, responsible for the lease after a divorce and separation of assets?

Technically, yes. Neither the divorce decree nor the parties themselves can – without your consent – alter their joint legal duties under a lease they both signed. [This situation is not dissimilar to spouses jointly signing their mortgage and then divorcing; they both remain liable under the mortgage, even though one vacates the home.] The best a divorce court can do is to make the occupying ex-spouse primarily responsible for the rent and give indemnity rights to the non-occupying ex-spouse in case she or he end up having to pay for unpaid rent that should have been paid by the occupying ex-spouse.

3. Do we rescreen the remaining resident to see if he/she qualifies on their own?

I have a visceral reaction to doing so – if they did not pass the credit requirements, then what? Deny them the right to stay in the community in which they have lived for a number of years? Kick them out without waiting to see whether they can – or will make the payments? That is like punishing the remaining ex-spouse for being divorced. Remember, the occupying ex-spouse will likely be the custodial parent, if children are involved. The non-custodial parent will likely have some child support obligation, which would then make the custodial parent’s individual credit score less important. The same may be said even if there are no children; there may be a spousal support obligation by the non-occupying ex-spouse. It seems to me that it will become clear soon enough, whether the occupying ex-spouse can or will make the space rental payments, independent of what their current credit score may be.

4. If we do rescreen the remaining resident and he/she fails the credit or criminal background, what are our options?

Before you re-screen, re-read my answer to Question No. 3 above. If the lease agreement or rules do not address the possibility of spouses divorcing – and I have never seen any that do – the ultimate decision on whether you may re-screen could be left up to a judge. I submit that judges do not like to evict people out of their homes unless there is a compelling reason to do so. A case in which a resident is being evicted for no reason other than that they no longer meet the credit criteria – with no evidence that they are in default under the lease or rules – would be a very difficult sell to most judges. It is unlikely that you would prevail. I compare this situation to requiring a resident to be re-screened upon a job loss or death of a spouse. In cases of such unplanned events occurring after residents have been approved, I suggest that you let the situation play itself out. If a resident cannot afford to pay the space rent, you will then have sufficient cause to evict. But to try to evict because you doubt the ability of the resident to pay rent in the future, is premature and likely to fail.

5. Who owns the security deposit or pre-paid rent?

That depends upon whether you have the remaining resident sign a new lease. If a new lease is signed, you could issue a refund check to both of them under the first least, and require the remaining occupant to pay a new deposit under the new lease. It would be preferable, however, to see if they could agree to authorize you to leave the existing deposit in place, but permitting you to refund it, if appropriate, to the remaining occupant at the end of his/her tenancy. If no agreement can be reached, simply hold the deposit until expiration of the tenancy by the occupying non-spouse, and then, if a refund is in order, make the check out to both of them.