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By:  Rebekah Near, CEO, Orca Information, Inc.

Last article I wrote was titled, A COMMON MISTAKE WHEN DENYING APPLICANT COULD COST YOU THOUSANDS.  The focus of the topic was on giving your applicant who does not qualify for the unit the ADVERSE ACTION LETTER which is sometimes referred to as a CONSUMER RIGHTS LETTER AKA FCRA Summary of Rights.  One knowledgeable, sharp and concerned Manufactured Park Manager sent me some good questions. Evidently there is some confusion as to what information is required in an Adverse Action letter.  Here is one of the questions I received and my reply.  

Question: I’ve been giving the FCRA Summary of Rights as part of the Adverse Action letter to applicants for years until my supervisor told me not to.  I recently forwarded your advice directly to my employer and supervisor, who says, “There is no current requirement to give an applicant the FCRA Summary of Rights along with the reasons for adverse action”. 

Answer:  First, I am not an attorney.  It is wise to consult an attorney on these matters.  That is just what I did.  Not only did I read advice from an attorney but I also researched deeply the FCRA wording for clarity.  Let’s read what this attorney from the FTC Division of Privacy and Identity Protection advises.  She is addressing landlords.  She writes the following:

What if the information in a consumer report (tenant screening report) leads you to deny housing to an applicant?  Under the  Fair Credit Reporting Act (FCRA), you must inform applicants in what’s called an adverse action notice. That’s true even if the report was only a minor factor in your decision. An adverse action notice tells people about their rights to see information being reported about them and to dispute inaccurate information. It’s a best practice to provide that adverse action notice in writing because it benefits both you and the applicant. Written notices give you proof of compliance with the law. They also better enable applicants to assert their rights to request a copy of the report from the consumer reporting agency (tenant screening company) and to dispute any mistakes.

The attorney now quotes the FCRA:

Fair Credit Reporting Act 15 U.S.C § 1681

A summary of rights is required to be included with agency (tenant screening company) disclosures (adverse action notices).

A consumer reporting agency (tenant screening company) shall provide to a consumer (landlords applicant), with each written disclosure by the agency (tenant screening company) to the consumer (landlords applicant) under this section –

(A) the summary of rights prepared by the Bureau (credit bureau) under paragraph (1);

(B) in the case of a consumer reporting agency (tenant screening company) described in section 603(p), a toll-free telephone number established by the agency (tenant screening company) at which personnel are accessible to consumers during normal business hours;

(C) a list of all Federal agencies responsible for enforcing any provision of this title, and the address and any appropriate phone number of each such agency, in a form that will assist the consumer in selecting the appropriate agency;

(D) a statement that the consumer may have additional rights under State law, and that the consumer may wish to contact a State or local consumer protection agency or a State attorney general (or the equivalent thereof) to learn of those rights; and

(E) a statement that a consumer reporting agency (tenant screening company) is not required to remove accurate derogatory information from the file of a consumer, unless the information is outdated under section 605 or cannot be verified.

End of the FTC attorneys advice.

______

It appears the Park Manager who submitted this question is correct when she sent denied applicants the Adverse Action letter and included The Summary of Their Rights.  If this Park Manager were my employee, I would be proud I had the foresight to hire someone who deeply cares about the company for which they work, stays educated and remains aware of the ever-changing, laws.  What do you my readers think?  I would love to hear from you.

To read more about the FCRA law pertaining to Adverse Action letters including Summary of Rights, go to:  Consumer Financial Protection Bureau, Rules & Policy.  Also, the FTC, Summary of Your Rights. 

Rebekah Near is the owner operator of Orca Information, Inc an Employment and Tenant screening company serving the Pacific Northwest and the Nation.  The web address is www.orcainfo-com.com  She is not an attorney and does not give legal advice.  You may send your questions to her at rebekahn@orcainfo-com.com.    

Answer:  It you review the Oregon Revised Statutes in Chapter 90, the landlord-tenant section of the law, you will find no clear answer.[1]  The general rule is that landlords may pass through a utility provider’s charges[2] to the resident. The resident may verify the pass-through by examining the provider’s bill and may challenge it if the pass-through exceeds that amount charged to the landlord.

While the law does not require the landlord to do more than pass the increased charge through, good public relations suggest an explanation be given to each resident when the increase occurs.

As to the second issue about dealing with an increase after having already sent a monthly invoice for the lower amount. The best practice is to include the “catch-up” amount in the next immediate month’s utility bill with an explanation. And always remember to post the provider’s bill as required by ORS 90.582.

[Special thanks to John Van Landingham and Bill Miner on this issue. The absence of a law or rule in Oregon’s highly regulated landlord-tenant law always makes me check twice. John and Bill confirmed my research.]

[1] Remember that there are two sections dealing with utilities in residential tenancies:  ORS 90.315 for non-MHP tenancies and 90.560 to 90.584 for MHP tenancies. Also, remember that manufactured homes outside of MHPs and all recreational vehicles regardless of location are not treated as MHs and are therefore regulated exclusively by ORS 90.315.

[2] But nothing more than the amount charged by the provider.

Answer:  First, a reminder. MHCO’s Q&As are provided as a member benefit for information only; they should not be relied upon as legal advice. You need to check with your own attorney on a detailed answer to your question.

In 2021, ORS 329A.440 was passed. There are two types of facilities addressed in the law:

(a) A “Child care center” which is a child care facility, other than a certified family child care home (see (b) below) and

(b) a “Family child care home” which is a child care facility in a dwelling that is caring for not more than 16 children and is certified (when certification is required) or is registered under ORS 329A.330 , when registration is required. A family child care home is considered a residential use of property for zoning purposes and is a permitted use in all areas zoned for residential or commercial purposes, including areas zoned for single-familydwellings.

Local governments may not enact or enforce land use regulations prohibiting the use of a residential dwelling, located in an area zoned for residential or commercial use, as a family child care home. This is the law that may apply in the case of your residents.

Without knowing what your rules state, I cannot say if they are technically in violation of the new law. But in my opinion, even though these facilities are legally permitted, there are a number of conditions you may impose on their operation. However, legal counsel should vet them first. Here are some suggestions to tighten up your rules:

• Require that the business complies with all state and local laws, rules and regulations. You need to first check with the applicable state or local agency to find out what they are and what you should do if there are violations (See: https://www.oregon.gov/delc/providers/pages/certified-family.aspx and chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.oregon.gov/delc/providers/CCLD_Library/CCLD-0085-Rules-for-…)
• You should require that liability insurance be maintained with proof provided to you yearly. The amount is not set forth in the statute. Check the administrative rules and with the licensing authority.  Check also with your insurance agent. 
• Of major concern should be traffic and reasonable restrictions on this are permitted.
• Similarly, you should have reasonable restrictions on outdoor play, bikes, trikes, games, etc., especially in streets. And remember common areas are for everyone, so you don’t want it to become a playground.
• Noise can be a problem, although the main issue to regulate is hours of the day because of neighbors (it’s impossible to regulate the sound of happy children!).
• All of your regulations should be in writing and consistently imposed. The failure to do so could lead to complaints to local authorities.
• Do not forget that federal and state housing laws prohibit discrimination against children, i.e., those under 18 years of age. Violations could lead to complaints with the Oregon Bureau of Labor and Industries (BOLI) which could eventually end up in court.

The take-away for you is that notwithstanding the fact you may not be able to prohibit such a business in your Park, if you know the regulatory rules, publish them, and consistently enforce them, you will be fine.

Three final notes: (a) Do not try to congregate these businesses in one area of the park. That, in itself, can lead to legal action; (b) the above does not apply if you are a 55+ or 62+ facility; and discuss with your attorney and insurance agent all possible legal liability issues that could result in claims. Good luck!

Legal Risk: “Source of income” discrimination is among the fastest growing areas of fair housing litigation, generating 1,713 complaints in 2022, a year-over-year increase of 39.8 percent, according to the NFHA. Source of income discrimination occurs when landlords reject applicants or evict tenants not because they can’t afford the rent but because they use something other than traditional income from employment to pay, such as Section 8 or other housing vouchers, welfare, disability, unemployment, veteran, or other government benefits. The case can be made that source of income discrimination violates the FHA to the extent that racial minorities, people with disabilities, and other FHA-protected classes rely on these income sources at disproportionate rates. However, the principal risk of liability stems from the 20 states and over 70 major cities whose fair housing laws expressly ban source of income discrimination.

States that Ban Source of Income Discrimination in Housing: California, Connecticut, Colorado, Delaware, District of Columbia, Hawaii, Maryland, Massachusetts, Minnesota, New Jersey, New York, North Dakota, Oklahoma, Oregon, Rhode Island, Texas (covers homeowners associations only), Utah, Vermont, Virginia, Washington, Wisconsin (doesn’t cover housing vouchers)

Solution: There are five steps you can take to guard against inadvertent liability for source of income discrimination:  

Accept all forms of legal income;

Don’t charge fees or impose less favorable rental conditions based on a tenant’s source of income, for example, by requiring a tenant to get the lease guaranteed because they don’t pay in cash;

Don’t require prospects or tenants to be employed if they have the non-employment income necessary to pay rent;

Be careful about imposing minimum income requirements or credit score benchmarks; and

Keep your ads free of statements, images, or other content that express or imply a preference for or against prospects with housing vouchers or other forms of income.

You Make the Call

Can you reject a rental applicant who’s unemployed and dependent on welfare and alimony because she doesn’t meet your community’s income requirements?

a.         Yes, as long as you consistently reject other applicants who don’t meet your income requirements

b.         No, because rejecting her would be discrimination based on sources of income

c.          Yes, because applicants who don’t have steady jobs are too great a financial risk

Answer:

a. If an applicant has the lawful funds to pay her rent each month, you can’t reject her simply because you object to where those funds come from. On the other hand, you don’t have to accept an applicant with insufficient income. So, a. is the right answer.

Wrong answers explained:

b. is wrong because an insufficient amount of income, regardless of source, is a legitimate, non-discriminatory reason for rejection as long as you consistently apply the income standard with all prospects.

c. is wrong because requiring applicants to have a steady job is a form of source of income discrimination that the laws ban. As long as applicants can get the money they need to pay rent from legal sources, the source of that income is none of your concern.

Solution: There are five steps you can take to minimize discrimination risks when dealing with undocumented aliens: 

1. Don’t make U.S. citizenship or immigration status a qualifying criterion for renting unless you have a legitimate, nondiscriminatory, and documented business justification for doing so—for example, because state or municipal law requires it;
2. Be consistent in applying whatever screening policy you do adopt;
3. Ask for the right form of verification of citizenship and/or immigration status (discussed below);
4. Apply your normal screening standards to immigrants; and
5. Don’t use an applicant or tenant’s immigration status as a bargaining chip.

How to Verify Immigration/Citizenship Status. Acceptable proof depends on whether you’re seeking to verify an applicant’s status as a citizen, immigrant, or nonimmigrant:

• Citizenship: Acceptable proof of U.S. citizenship includes a valid current U.S. passport, birth certificate, or certificate of naturalization;
• Legal immigrant: Proof of legal immigrant status, i.e., noncitizens who have the right to permanently remain in the U.S., include a Permanent Resident Card (a.k.a., “Green Card”) and an official Social Security number;
• Legal nonimmigrants: Legal nonimmigrants are persons allowed to be in the U.S. on a temporary basis for specific reasons. Such applicants should have a non-U.S. passport from their native country along with a Form I-94, a.k.a., Arrival Departure Record or Entry Permit listing when they entered the U.S. and how long they have a right to stay. They also need a visa, such as an F-1 visa for students, unless they’re from one of the countries that has signed a visa waiver agreement with the U.S.

You Make the Call

Which of the following would be a legitimate reason to reject applicants who aren’t U.S. citizens?

a.         Being a U.S. citizen is required for leasing property under HUD program rules and/or state or local law 

b.         A non-U.S. citizen is generally less likely to pay rent on time each month

c.          Non-U.S. citizens are totally judgment proof

Answer:

a. The fact that HUD program rules and/or state or local laws require landlords to verify that applicants are U.S. citizens before accepting them is a legitimate, nondiscriminatory justification.

Wrong answers explained:

b.         The assumption that noncitizens are less likely to pay rent is just that—an assumption, and one based on stereotypes. Consequently, it’s not justification for requiring applicants to be U.S. citizens.

c.          The reason c. is wrong is that it’s overstated. While evicting or suing a noncitizen for lease violations poses challenges, it’s not accurate to characterize immigrants as “judgment-proof.” In fact, persons in the U.S. illegally are likely to be far more amenable to threats of litigation.

Termination for Continuing Violations. In manufactured housing communities, the type of conduct that would make a tenant subject to this 30-day termination notice is the failure to maintain the space which is required under the rules or rental agreement. MHCO Form 43 would be used which – at the title states – is “for continuing violations only.” ORS 90.630(3)(d) defines this as conduct that is “constant or persistent or has been sufficiently repetitive over time that a reasonable person would consider the conduct to be ongoing.”

This form is to be completed according to its instructions must specify, in detail, if necessary (including pictures if appropriate):  (i) the reason for the violation: (ii) the source of the violation, e.g., rules, rental agreement, statute, etc.; and (iii) at least one possible remedy. If the violation is cured within the 30-day period, the problem is solved. If it is not cured, the landlord has the right to then file for eviction (being sure to append the 30-day notice to the complaint). Taking photos of the condition upon which the notice is based on the date of the notice and the 31st day thereafter is essential for use in court.

Termination for Distinct Acts or Omissions. However, when the violation is a single event, such as speeding in the community; loud music or other disturbances; fighting; threats of violence, etc., things become more complicated since the landlord does not want to give the tenant 30 days to stop engaging in the offensive activity.  For that reason, landlords must use MHCO Form 43A for violations that constitute a “distinct act or omission.”

The protocol in completing this form is much different than Form 43 and must be followed carefully; it can get confusing. Here it is:

1. The “Deadline” to correct the violation can be no sooner than the 4th day after the date of the notice if hand-delivered or mailed and attached, or the 7th day after the date of the notice if sent via regular mail. (Although not required by law, it is recommended that landlords obtain a certificate of mailing from the post office if regular mail is used.)

2. Similar to Form 43, in 43A the basis for the violation (e.g., rules, rental agreement, etc.) the violation, and the event(s) to cure must also be specified with particularity.

3. If correction does not occur by the Deadline, the tenancy automatically ends on the “Termination Date” which must be at least 30 full days after the date of the notice.  Thus, if the tenant is not out by the Termination Date, the eviction may be filed.  Filing for eviction before the Termination Date would, in my opinion, be premature, since the tenant still has the right to remain at the space for the balance of the month. For repeat violations, see (iv) below.

4. If substantially the same violation occurs within six months following the date of the notice (43A), the landlord may terminate with 20 days written notice to the tenant and there is no right to cure.

Conclusion.  The above discussion is a summary only. There are various nuances. Conduct by a pet or assistance animal is not included. Note there can be some overlap with conduct triggering the 24-hour notice statute under ORS 90.396 (which may be preferable if the conduct involves health and safety). Accordingly, if you have questions that are not answered by the above, check with you legal counsel before filing the notice and before filing an eviction based upon the notice.

[1] Note that rules and regulations are also considered a part of the “rental agreement.”

Most importantly, the “vacation occupancy” period for RVs has been expanded from 45 days to 90 days.  This means if you have a written agreement that complies with the vacation occupancy requirements in HB 2634, those RV occupants do not become “tenants” under Oregon law.  As such, they may be asked to vacate at any time without issuing an eviction notice or going to court.  If necessary, law enforcement may be called to remove any “vacation occupants” as trespassers if they refuse to leave.  In that case, you must have a copy of the written vacation occupancy agreement available to show the responding officers that the occupants are not tenants under Oregon law and can be cited for trespassing.

An RV vacation occupancy agreement must be signed by the occupant and must state:  (1) The occupant is renting the RV space for vacation purposes only, not as a principal residence, (2) the occupant has a principal residence other than at the space, (3) the period of occupancy cannot exceed 90 days, (4) the RV must be removed from the park at the end of the occupancy period, and (5) occupancy of the space in the RV park is a vacation occupancy and is NOT subject to the Oregon Residential Landlord and Tenant Act (ORS Chapter 90).

If occupants meet the criteria to sign a vacation occupancy agreement, my view is that RV park landlords should use a 90-day vacation occupancy agreement as a “probationary period” to ensure that they follow the rules and pay the rent.  If they are causing problems, you can ask them to leave any time before the 90-day period expires, thus avoiding creation of a “tenant.”  If they work out as good 90-day occupants and want to become tenants, you can then sign them up using a month-to-month rental agreement.

Having a one-size-fits-all approach also can lead to fair housing trouble when it has a discriminatory effect on people protected under fair housing law. One example involves occupancy policies: If they’re too restrictive, they can have a discriminatory effect on families with children. Though it’s generally accepted that two persons per bedroom is a reasonable occupancy policy, that’s only a rule of thumb—and subject to a number of exceptions.

Finally, the law itself offers some exceptions, but it’s important to know whether—and how—they apply to avoid fair housing trouble. For instance, the law generally forbids communities from excluding families with children from living there, but there’s an exception for senior housing communities. To claim the exception, however, communities must meet strict technical requirements—unless you do, you’ll invite a fair housing complaint if you deny housing to families with children.

In this article we will review fair housing requirements and give you seven rules—along with the most common exceptions—to help your community avoid fair housing trouble.

WHAT DOES THE LAW SAY?

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

The vast majority of fair housing cases are for intentional discrimination—that is, purposely denying housing to people—or treating them differently—because of their race, color, religion, sex, national origin, familial status, or disability. In these cases, the focus is on intent—why the community acted the way it did. If, for example, an applicant accuses you of intentional discrimination for refusing to rent to him based on his race, the community may defend itself by proving that it rejected his application for a legitimate, nondiscriminatory reason: The applicant didn’t satisfy its standard screening criteria, which were consistently required of all applicants.

But the law goes further to outlaw what’s known as “disparate impact” discrimination—that is, housing practices that appear to be neutral, but have an unjustified discriminatory effect on members of protected classes, even if there’s no intent to discriminate. In contrast to claims for intentional discrimination, fair housing claims based on disparate impact aren’t so much concerned with your intent, but on the effects, of your policies or practices. For example, courts have ruled that overly restrictive occupancy policies violate fair housing law because of their discriminatory effect on larger households, which are more likely to be families with children.

RULE #1: Consistency Is the General Rule

EXCEPTION: Understand When the Law Requires You to Make Exceptions

As a general rule, it’s a good idea to establish reasonable, nondiscriminatory rules policies—and to apply them consistently—to counter any perception that your community treats people differently based on race, color, religion, sex, familial status, national origin, and disability. Applying the same policies and rules to everyone helps avoid accusations of conduct made unlawful under the FHA, such as:

• Excluding members of protected classes from living in your community;
• Falsely denying that housing is available to members of protected classes;
• Discouraging members of protected classes from living there;
• Restricting where members of protected classes may live in your community;
• Setting different terms, conditions, or privileges or facilities for members of protected classes;
• Delaying or denying requests for maintenance services for members of protected classes;
• Enforcing community rules more harshly or leniently for members of protected classes;
• Making eviction decisions because of a protected characteristic;
• Making statements expressing a preference for or against members of protected classes; or
• Threatening, coercing, intimidating, or interfering with anyone exercising a fair housing right.

Nevertheless, you should learn to recognize when fair housing law requires you to make exceptions to your general policies. The most important are requests for reasonable accommodations or modifications for individuals with disabilities. Under the FHA, it’s unlawful to refuse to make reasonable accommodations in the rules, policies, practices, or services if necessary for an individual with a disability to fully use and enjoy the housing. It’s also unlawful to refuse to allow reasonable modifications to the unit or common use areas, at the applicant or resident’s expense, if necessary for an individual with a disability to fully use the housing.

RULE #2: You Make the Rules When It Comes to Pets

EXCEPTION: You Can’t Apply Pet Rules to Assistance Animals

Your community, like many others, may have rules about pets. You may forbid all pets, or you may allow only certain types, breeds, and sizes of animals at your community. Fair housing law doesn’t prevent you from regulating whether and when residents may keep pets at your community—as long as you understand that you must make an exception to your pet rules as a reasonable accommodation for an individual with a disability who needs an assistance animal to fully use and enjoy the premises.

That’s because assistance animals are not pets under fair housing law. They’re animals that work, provide assistance, or perform tasks for the benefit of a person with a disability, or provide emotional support that alleviates one or more identified symptoms or effects of a person’s disability, according to HUD. Though most requests for assistance animals are for dogs, HUD says that assistance animals may include a wide variety of species—not just dogs—that provide various forms of assistance—including emotional support—with or without specialized training.

Though many communities have policies banning so-called dangerous breeds, most notably pit bulls, HUD says that breed, size, or weight limitations may not be applied to assistance animals. That doesn’t mean that you must allow a resident to keep a dangerous animal—even if it’s an assistance animal. Though you can’t apply a blanket rule against certain dog breeds, you can exclude a specific animal that poses a direct threat to the safety of others.

Example: In October 2017, the Vermont Supreme Court upheld an eviction of a resident who had a dog in violation of the community’s no-pet policy. The resident claimed that she had disabilities and that the dog, which had been living with her for some time, was an emotional support animal.

Though the resident was disabled and had a disability-related need for an emotional support animal, the court ruled that she wasn’t entitled to a reasonable accommodation to keep this dog, Duchess, because it posed a direct threat to the safety of others. The evidence showed that Duchess often exhibited aggressive tendencies and that other residents were afraid of her. The resident, who was unable to restrain the dog, had tried and failed to reduce the potential for aggression that the other residents had reasonably feared. While sympathetic to the resident’s attachment to Duchess, the court said that the landlord was not required to do everything humanly possible to accommodate her disability [Gill Terrace Retirement Apartments Inc. v. Johnson, October 2017].

Though your rules may require pet owners to pay extra pet fees or deposits, you must make an exception to the rules for assistance animals. According to federal guidelines, communities may not require individuals with disabilities to pay extra fees or security deposits as a condition of allowing them to keep assistance animals as a reasonable accommodation. If the assistance animal causes damage, you can charge the resident for the cost of repair—but only if you have a general policy requiring all residents to pay for damages they cause to the premises.

RULE #3: You Can Regulate Parking at Your Community

EXCEPTION: You Must Consider Disability-Related Requests for Special Parking Arrangements

For the most part, it’s up to you to determine whether—and how—to regulate parking at your community. Whatever your policy, however, you should be prepared for reasonable accommodation requests by individuals with disabilities who say they need an exception to your parking policies so they may use and enjoy their home.

A prime example is a request for an exception to parking rules for an individual with a mobility impairment. In general, you should grant reasonable requests from applicants or residents with mobility problems for parking accommodations, such as a designated parking space near a building entrance or a resident’s unit, an accessible parking space, or a space designed for van parking. When there’s a clear relationship between the resident’s disability and the need for the requested parking accommodation, the law requires the community to grant the request unless it’s unreasonable—that is, it would impose an undue financial and administrative burden on the community or fundamentally alter the nature of the community’s operations.

Nevertheless, HUD says that the FHA does not require a community to make an exception to parking rules unless there is an identifiable relationship between the requested accommodation and the individual’s disability. The requested parking accommodation must be more than a mere convenience—it must be necessary to allow the resident to live in and fully enjoy the community.

Example: In September 2017, a court ruled against a resident who accused her community of refusing her requests for reasonable accommodations, including her request to reserve the three parking spaces in front of her condo to prevent her neighbors from parking there. The resident claimed that she had a mental disability and that she needed all three parking spaces because she felt unsafe and harassed when strangers parked in front of her home. Allegedly, she rejected the community’s offer to reserve one designated parking space for her, because the installation of a sign to mark the space would block her view and cause psychological distress. She sued, accusing the community of disability discrimination.

Siding with the community, the court ruled that the resident failed to show that her request for three reserved parking spaces were either necessary or reasonable to accommodate her mental disability. She presented a doctor’s note, but it didn’t explain the nature of her disability or why reserving the three parking spaces in front of her unit was necessary to afford her equal opportunity to use and enjoy her dwelling.

The resident also failed to show that reserving these three parking spaces was a reasonable accommodation. The three parking spaces at issue were among the 150 non-reserved parking spaces at the condo complex and all the condo owners had rights to the spaces. Reserving three of them for the resident couldn’t be done without amending the condo documents and reducing the rights of all other owners. The requested accommodation was unreasonable because her unproven need for the spaces was entirely outweighed by the burden that others would suffer if the accommodation were granted [Burrows v. Cubba, September 2017].

RULE #4: You Can Require Applicants to Satisfy Financial Criteria

EXCEPTION: You Must Consider Disability-Related Requests to Modify Financial Requirements

You’re entitled to, and should, determine financial criteria that you apply consistently to all applicants. If you ask some applicants to meet stricter financial requirements than others have to meet, then an applicant may believe he’s being treated differently because of his race or other protected characteristic and claim discrimination under fair housing law.

Nevertheless, you could face a request for an exception to your financial requirements as a reasonable accommodation for an individual with a disability. For example, an applicant with a disability may not qualify financially for a unit in your community, but offer to have someone who will co-sign and promise to pay the rent for him. Depending on the circumstances, refusing to consider such requests for exceptions to your community’s financial requirements could be viewed as denying requests for reasonable accommodations required by fair housing law.

Example: In July 2017, a New York co-op community agreed to pay $125,000 in damages and penalties to resolve a fair housing lawsuit for its alleged refusal to grant a reasonable accommodation to an applicant with a disability.

In its complaint, the Justice Department alleged that the community and its property managers repeatedly denied the application of a 34-year-old man to purchase a one-bedroom unit because of his disabilities, which included serious heart problems, learning disorders, and depression. Allegedly, the man and his family asked that ownership of his unit be placed under a legal trust to help him manage the requirements of cooperative housing, but that the community refused the requests without explanation. As a result, the complaint alleged, the man was forced to continue living in a boarding house with abysmal conditions, grew increasingly depressed, and suffered another heart attack.

“Every member of our society is entitled to equal access to housing and the independence and dignity that it provides,” Acting U.S. Attorney Joon H. Kim said in a statement. “With this resolution, we again emphasize that condos, cooperatives, landlords, and property managers must provide reasonable accommodations to people with disabilities” [U.S. v. 505 Central Avenue Corp., July 2017].

In some cases, disabled applicants have asked for an exemption from financial requirements as a reasonable accommodation, arguing that their disabilities caused them to suffer financial hardships, such as the inability to work. That argument has been rejected by a number of courts, but these can be difficult cases to resolve, so it’s a good idea to get legal advice when confronted by such requests.

RULE #5: You Establish Policies on When and How Rent Is Paid

EXCEPTION: You Must Consider Disability-Related Requests to Modify Rental Payment Policies

You have the right to require residents to pay their rent in a timely manner, but you should consider disability-related requests for exceptions to your policies on how rent is paid. For example, federal guidelines state that a community with a policy requiring payment of rent in person at the leasing office must make an exception for a resident who has a mental disability that makes her afraid to leave her home. According to the guidelines, the community must grant her request to have a friend mail the rental payments as a reasonable accommodation.

Depending on the circumstances, you may also have to consider a disability-related request to change the rental due date. This may come from a resident who relies on disability benefits to pay rent, but who doesn’t receive the check until after the rent is due. If the resident can show that he needs the accommodation because of a disability, then you’ll need documentation to prove that his request is unreasonable because of its impact on your business operations.

Example: In April 2017, a court refused to dismiss a lawsuit accusing a Pennsylvania community and its management company of disability discrimination for allegedly denying a resident’s reasonable accommodation request for the change in his monthly rental due date until after he received his monthly SSDI benefit check. After conducting an investigation, fair housing advocates sued, alleging that the company wouldn’t permit any exceptions to its policies on the rental due date.

The court ruled that the advocates could pursue claims that the company unlawfully denied the resident’s reasonable accommodation request for an exception to the policy requiring rent payments on the first of the month. The company argued that it wasn’t required to grant accommodations related to a disabled person’s financial circumstances, but the advocates argued that SSDI recipients relied on their checks as their primary or only source of income because their disabilities rendered them unable to work. The court said it may be reasonable that the company be required to adjust its rent due date for disabled persons to be afforded equal housing opportunities.

Nevertheless, further proceedings were needed on the community’s claim that the accommodation request was unreasonable. The company argued that the request to change its policy on the rental due date posed an unreasonable financial and administrative burden on the company’s business operations. The company pointed out that it manages more than 35,000 rental units in approximately 140 communities in 10 states. According to the company, its current system of rent collection and handling court proceedings is cost-effective and that the requested accommodation would “fundamentally alter the way” it does business and require a “major and expensive reprograming of software and business procedures [Fair Housing Rights Center in Southeastern Pennsylvania v. Morgan Properties Management Company, LLC, April 2017].

RULE #6: You Can Enforce Reasonable Occupancy Standards

EXCEPTION: General Two Person/Bedroom Standard May Not Be Reasonable in Some Circumstances

As a general rule, fair housing law doesn’t prevent communities from maintaining reasonable occupancy policies, but it’s unlawful to set overly restrictive occupancy standards that have the effect of excluding families with children.

Across the country, communities have come to rely on the industry standard—“two persons per bedroom”—as a reasonable occupancy standard. It comes from HUD in what’s known as the “Keating memo,” which states that the agency considers two persons per bedroom to be a reasonable standard. But, as the memo points out, that’s not a hard-and-fast rule, and HUD will consider other factors, including bedroom size and other “special considerations,” which may make the two person/bedroom standard unreasonable under the circumstances.

In recent years, fair housing advocates have challenged the use of the two person/bedroom standard where state or local occupancy laws may allow more people to live there based on square footage and other factors. It’s too soon to tell how it will all shake out, but for now, communities could face a greater risk of being challenged if they stick with a rigid one-size-fits-all occupancy standard without considering other factors listed in HUD’s Keating memo.

Example: In October 2017, the owner of a Washington community was ordered to pay more than $127,000 in damages for violating federal, state, and local fair housing laws based on familial status by enforcing an occupancy policy allowing only one occupant in studio units.

The case began when an advocacy group conducted fair housing testing at the 96-unit apartment complex where two-thirds of the units were studios, all over 400 square feet. According to the group, its testing confirmed that the community rented the studio units only to single occupants. The group sued, arguing that the community’s occupancy restriction had an adverse discriminatory effect on families with children.

The court agreed, rejecting the community’s claim of legitimate, nondiscriminatory reasons to justify the rule. Among other things, the community argued that the units were too small to accommodate more than one person, but the court pointed out that the city code allowed two people to occupy a studio unit as small as 150 square feet [Fair Housing Center of Washington v. Breier-Scheetz Properties, LLC, October 2017].

RULE #7: You Can’t Refuse to Rent to Families with Children

EXCEPTION: You Can Exclude Children ONLY if You Qualify for Senior Housing Exemption

The FHA prohibits housing discrimination based on familial status—which means the presence of a child under 18 in the household. The law protects families with children, along with anyone else who has legal custody or written permission to have a minor child living with them. It also applies to pregnant women and anyone in the process of obtaining legal custody, such as through adoption or divorce proceedings, of a child or children under 18.

On the whole, familial status is on the same footing as race and any of the other protected classes under fair housing law. Just as it’s unlawful to turn people away because of their race, you can’t turn people away because they have one or more children living with them. It doesn’t matter whether you—or your current residents—would prefer to be living among adults; it’s unlawful to deny housing to people—or to treat them differently—because there’s a child under the age of 18 in the household.

There’s only one exception that would allow you to exclude children from your community—but it applies only to senior housing communities that meet strict legal requirements to qualify as “housing for older persons.” The FHA recognizes three types of housing that may qualify under the familial status exemption as housing for older persons. The most common—55 or older—is also the most complicated: Among other things, 55+ communities must adopt policies and procedures to ensure that at least 80 percent of its units are occupied by at least one person 55 and older.

Senior communities that comply with these and other technical requirements are exempt from the general rules that protect families with children. There’s no middle ground—you either meet those requirements or you don’t. And if you don’t, you’ll likely trigger a fair housing complaint by adopting an “adults-only” policy to prevent families with children from living there.

Example: In September 2017, the owners and manager of three apartment buildings in Washington agreed to pay $95,000 to resolve allegations that they refused to rent to families with children. In its complaint, the Justice Department alleged that a manager told a woman seeking an apartment for herself, her husband, and their one-year-old child that the apartment buildings were “adult only.” Allegedly, the communities advertised their apartments as being in “adult buildings.”

“No family should be denied a place to live simply because they have a child,” added Anna Maria Farias, HUD Assistant Secretary for Fair Housing and Equal Opportunity. “HUD will continue to work with the Justice Department to ensure that property owners comply with their obligations under the nation’s fair housing laws.”

Introduction.  The Fair Labor Standards Act (“FLSA”) generally provides that when most employees work more than a 40-hour week, they are entitled to additional compensation. Commencing on July 1, 2024 the Department of Labor (“DOL”) regulations will provide new eligibility standards for overtime pay. Required overtime pay will now apply to workers earning less than $844/week (i.e., $43,888/year). The current rate is $684/week (i.e., $35,568/year).

Exemptions From New Law. These include bona fide executive, administrative or professional employees (typically referred to as the “EAP” exemption). They apply when: 

1. The employee is paid a salary;  

2. It is not below the minimum salary threshold amount; and 

3. The employee primarily performs executive, administrative or professional duties.

Generally. The DOL’s new overtime rule was based upon 33,000+ written comments and almost 30 meetings with stakeholders across the US. The department’s final rule on July 1, 2024 will increase the standard salary level and clarify which salaried workers are entitled to overtime pay protections under the FLSA. 

On January 1, 2025, the July 1, 2024 figures will increase; most salaried workers making less than $1,128/week (i.e., $58,656/year will become eligible for overtime pay. As these changes occur, job descriptions will determine overtime EAP exemption status.

The rule will also increase the total annual compensation requirement for highly compensated employees (who are not entitled to overtime pay under the FLSA (if certain requirements are met) from $107,432 per year to $132,964 per year on July 1, 2024, and to $151,164 per year on Jan. 1, 2025.

Starting July 1, 2027, these earnings thresholds will be updated every three years to keep pace with changes in worker salaries.

Conclusion.  The above discussion is a summary only and not legal advice. MHCO members should consult with their own legal counsel to (a) find out whether their employees qualify under the new standards and (b) revisit the job descriptions they have for them. See the DOL website here for more information.

Answer:   Does the former tenant have issues other than his lack of fiscal responsibility?  You could prevent him from being a temporary occupancy based upon prior conduct, etc., but not regarding his failure to pay rent, since “in theory” a temporary occupant is not one who is sharing rent, etc. The statute (ORS 90.275) does not permit you to vet a person’s financial/employment status if they want to be a temporary occupant.  If the guy has other negative issues, you can decline to put him on a temporary occupancy agreement if they are substantial and material.

The following is a summary of a recent conversation I had with the Fair Housing Council of Oregon on the issue of whether landlords can put “caregivers” on Temporary Occupancy Agreements, rather than putting them on a Rental Agreement (or not putting them on any written agreement - which leaves in doubt their legal status if the Landlord wants them removed from the Community).

1. If the assistance provider doesn’t qualify based on the background check[1] then you don’t have to accept them into the Community;
2. If they violate rules of the community when they are already in the Community you can require they leave. (Of course if they are not on an Occupancy Agreement, this could mean removing the tenant if the caregiver refuses to leave, and the tenant doesn’t force them to do so);

• You can pre-qualify the current tenant as to their need for a care provider, i.e. require a letter or similar proof from a doctor or someone, saying the tenant needs someone 24/7;
• If they can’t provide that proof, then you don’t have to allow them into the Community as a care provider (although I can’t imagine it would be very hard to obtain such proof);
• You have to give the current tenant a choice (assuming the person qualifies under the background check), i.e. they can be on an Occupancy Agreement or go onto a Rental Agreement.  You can’t automatically say, “OK, you must go on an Occupancy Agreement.”
• It is believed that if the tenant understands the risk of allowing the caregiver to be a tenant (i.e. if the caregiver is disruptive, the current tenant may have to leave also), that they will voluntarily opt to put the person on the Occupancy Agreement. (Note: This doesn’t address the problem where the person doesn’t financially qualify to be on the Rental Agreement, but I suspect FHCO would say it’s a “reasonable accommodation” by the landlord to waive that financial requirement.)  This approach may be slightly unrealistic in those cases in which the tenant wants the caregiver there, and defers to what the caregiver says.

Your alternatives seem to be the following:

• If the current tenant wants them to be a care provider, can he/she establish its legitimacy?  If not, you can say no.
• If the current tenant wants them as a temporary occupant, and they have been a problem in the park you can say no; I believe this is so, even though they try to go the care provider route.
• If the current tenant wants them as a “tenant” you can say no because they do not have the financial capacity to pay rent (remember, you couldn’t say that if they were to be a temporary occupant).
• If you do agree to make them a temporary occupant, have everyone sign the Temporary Occupancy Agreement and put him on a 3 or 6 month term, to see how it goes.  You are under no obligation to renew – but if they are serving as a care provider on a Temporary Occupancy Agreement, you’d probably have difficulty not renewing unless there was a specific problem. (But if there was a specific problem, you likely would have already removed them.  Getting temporary occupants must be “for cause” e.g. a rules violation, but there is no 30-day right to cure.)

[1] Remember, you cannot require financial capacity if they are to be a temporary occupant, but you can if they are to be a tenant.