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Answer: One of the most common types of residential eviction is also the most misunderstood - the nonpayment of rent eviction. A good tenant's attorney can frequently retain possession for his/her client, even though they clearly failed to pay the rent when due. All it takes is a little familiarity with that labyrinthine set of statutes in the Oregon Residential Landlord Tenant Act, or "ORLTA."

It is common knowledge that unless the parties have agreed otherwise, rent is due on the first day of each month. Rent does not become delinquent until after the expiration of seven days, including the date rent is first due. An eviction cannot be filed until after the expiration of 72 hours' written notice. This means that the earliest a 72-hour notice may be delivered to the resident is on the 8th day of the month, and the earliest one may file for eviction is on the 11th day of the month, i.e. 72 hours hence.[1]

However, oftentimes it is not until the first appearance following the filing of the eviction that the landlord discovers that the resident has gone to an attorney and is now raising various counterclaims under ORLTA. Some of these counterclaims may be without any real factual basis, and may have been raised primarily to secure either more time or some other concession from the landlord.

Assuming that the resident either has the money to pay the rent, or can somehow gather it together prior to a trial, this is a battle that the landlord is almost sure to lose. The reason is found in the rent-tender statute, ORS 90.370. Essentially, this statute, and several cases that have construed it, permit the resident to tender the past due rent into Court, even though it was not paid during the 72-hour period set forth in the notice. At the conclusion of the case, if the Court finds that the amount tendered into Court covers the amount found to be due, the resident automatically retains possession.

Example: Landlord files an eviction against resident based upon the failure to pay monthly rent of $400. Resident files counterclaims alleging ORLTA violations, and claims that because of the deficiencies, the "market rent" (as opposed to the "contract rent", i.e. the amount due under the rental agreement) for the premises is only $100 per month - not $400 per month. Resident has had possession for seven month, six of which he paid the full rent that was due, and on the seventh month, i.e. the one for which the eviction was filed, he withheld the monthly rent. But he tendered the full $400 rent into court for the seventh month, and counterclaimed for $1,800, i.e. $300 for each of the prior six months' possession for which he "overpaid". Assuming that the counterclaims were made in good faith, here are the various scenarios:

1. Worst Case for Landlord: The Court finds in favor of the resident, awarding him a judgment for $1,800 (6 months X $300) plus costs and attorney fees.

2. Best Case for Landlord: Although the Court finds against the resident on his counterclaims, and finds that the amount due to the landlord is the full $400, since it has already been tendered into Court, the resident is allowed to retain possession, and may submit a request for recovery of his costs and attorney fees. This is because subsection (1)(b) of ORS 90.370 provides that "If no rent remains due after application of this section and unless otherwise agreed between the parties, a judgment shall be entered for the tenant in the action for possession. (Italics mine.) Thus, the resident is still the prevailing party and entitled to an award of attorney fees.[2]

The only exception to the "Best Case" scenario is where the landlord is able to convince the Court that the resident's counterclaims are improper and/or have been filed in bad faith. If so, the rent tender will do the resident no good, and if he loses his counterclaims, he will be evicted and become subject to a judgment for the landlord's costs and attorney fees.

So, when should the landlord fight to evict a resident for nonpayment of rent, where the resident has tender rent into Court? Only in the following situations: (a) Where the landlord is confident that he/she can convince the Court that the counterclaims were filed in bad faith; or, (b) Where the rent tender is believed to be inadequate and the resident's attorney does not realize that the shortfall could be tendered into Court so that no rent would remain due '_after application of this section... ." In virtually every other situation, the odds of winning a contested nonpayment of rent eviction where there has been a full rent tender are virtually nonexistent.[3]

[1] This analysis does not consider the 144-hour notice provisions of ORS 90.394(2)(b). However, the rationale is exactly the same whether the notice is based upon 72 hours or 144 hours. The only difference is the calculation of the time periods.

[2] ORS 90.255 provides: In any action on a rental agreement or arising under this chapter, reasonable attorney fees at trial and on appeal may be awarded to the prevailing party together with costs and necessary disbursements, notwithstanding any agreement to the contrary. As used in this section, prevailing party means the party in whose favor final judgment is rendered. (Italics mine.)

[3] These conclusions are based not only upon a reading of the statute, but also several well-established Oregon cases construing it.

Answer: I assume you are referring to a sale where you carry back the security obligation (as opposed to the buyer paying cash or securing third party financing).[1] In this respect, you are correct, subject to several limitations. MHCO worked extensively with the Oregon Department of Finance and Corporate Securities ("DFCS") and others to develop an exemption to the Oregon law that would permit park owners to engage in the sale of formerly abandoned homes to purchasers for the purpose of a primary residence without having to use a broker (referred to as a "Mortgage Loan Originator" or "MLO" under the new law). Here is a summary of the new exemption law which will be found in ORS 86A.203.

• Here are the rules for those licensed as a manufactured structure dealer under ORS 446.691.
  • They may offer or negotiate the terms of the loan three or fewer times in a 12 month period;
  • They must use a written sale agreement that complies with certain requirements, or with DFCS rules[2].
  • The dealer may not hold more than eight residential mortgage loans without securing a MLO license under ORS 86A.203(1). [Presumably, this means "at one time."]

• Here are the rules for those licensed as a limited manufactured structure dealer under ORS 446.706.
  • They may offer or negotiate terms of the loan five or fewer times in a 12 month period:
  • They must have an ownership interest in a manufactured dwelling park;
  • They must use a written sale agreement that complies with certain requirements, or with DFCS rules.
  • They may not hold more than twelve residential mortgage loans without securing a MLO license under ORS 86A.203(1). [Presumably, this means "at one time."]

Conclusion. I marvel at the complexity of these laws which have been implemented to "protect" consumers from creditors - especially small creditors, such as park owners selling formerly abandoned homes to fill a space and provide affordable housing. If these small transactions caused the credit and housing crisis of 2008 and the ensuing Great Recession, perhaps I could understand. But they didn'. What we're are seeing is a huge net of bureaucratic regulation that has been cast over even the smallest of transactions under the guise of consumer protection.

Going forward, my suggestion is for park owners to decide if: (a) They want to handle these transactions without the use of a MLO (which will add several hundred dollars to each sale) or (b) Go it alone. If the latter, my suggestion is to create the simplest of paper transactions, with a fair market rate of interest, no adjustable rates, no negative amortizations. Balloon payments are permissible. However, there is a limit on this safe-harbor. If you made more than four such carry-back loan transactions in the prior calendar year, an entirely different and more complex set of rules apply, and you should consider using either a MLO or an attorney qualified in such matters.

[1] The Federal SAFE Act and its state counterparts, have interpreted (incorrectly in my opinion) "loans" to include not just funding coming from a third party lender, but also seller-carryback transactions where the seller "carries the paper" and collects the periodic payments.

[2] The statute cited to for compliance, ORS 646A.052, et. seq. is antiquated and inadequate for residential housing today. Presumably, the DFCS will have to create a suitable form through rulemaking.

Answer: I assume you are referring to a sale where you carry back the security obligation (as opposed to the buyer paying cash or securing third party financing). In this respect, you are correct, subject to several limitations. MHCO worked extensively with the Oregon Department of Finance and Corporate Securities ("DFCS") and others to develop an exemption to the Oregon law that would permit park owners to engage in the sale of formerly abandoned homes to purchasers for the purpose of a primary residence without having to use a broker (referred to as a "Mortgage Loan Originator" or "MLO" under the new law). Here is a summary of the new exemption law which will be found in ORS 86A.203. - Here are the rules for those licensed as a manufactured structure dealer under ORS 446.691. _ They may offer or negotiate the terms of the loan three or fewer times in a 12 month period; _ They must use a written sale agreement that complies with certain requirements, or with DFCS rules . _ The dealer may not hold more than eight residential mortgage loans without securing a MLO license under ORS 86A.203(1). [Presumably, this means "at one time."] - Here are the rules for those licensed as a limited manufactured structure dealer under ORS 446.706. _ They may offer or negotiate terms of the loan five or fewer times in a 12 month period: _ They must have an ownership interest in a manufactured dwelling park; _ They must use a written sale agreement that complies with certain requirements, or with DFCS rules. _ They may not hold more than twelve residential mortgage loans without securing a MLO license under ORS 86A.203(1). [Presumably, this means "at one time."] But here's the rest of the story: Just because you are exempted from the MLO licensing requirements for a limited number of sales, does not mean that you are free from the tentacles of the Dodd-Frank Act. No, indeed. In fact, there are two new rules that still will apply. 1. Ability-to-Repay ("ATR") Rules. A creditor is prohibited from making a residential loan (this includes your sale of the formerly abandoned home) unless it first makes '_a reasonable, good faith determination of a consumer's ability to repay any consumer credit transaction secured by a dwelling (excluding an open-end credit plan, timeshare plan, reverse mortgage, or temporary loan) and establishes certain protections from liability under this requirement for "qualified mortgages." [See CFPB Summary, here.] In complying with the ATR rules, you must consider and verify the following borrower information: a) Current or reasonably expected income or assets [other than the value of the home that secures the loan]; b) Current employment status; c) Monthly payment on the mortgage loan; d) Monthly payment on any simultaneous mortgage loan that the creditor knows or has reason to know will be made; e) Monthly payment for mortgage-related obligations [e.g., insurance, taxes, assessments]; f) Current debt obligations; g) Monthly debt-to-income ratio, or residual income; and h) Credit history. In making the loan you will be required to calculate the mortgage loan payment based on: - The fully indexed rate or any introductory interest rate (whichever is greater); and - Substantially equal monthly installment that will fully amortize the loan amount over the loan term. At first blush, perhaps these requirements don't seem so burdensome, since one would think any smart lender would follow these protocols anyway. But remember, back in the easy money days, lenders were not keeping most of their loans on their own books; instead, the loans were "securitized", i.e. bundled and sold as securities to investors all over the world. This meant that circa 2004 - 2008, the originating banks that funded these residential loans were quickly repaid by investors and were never going to have to deal with them if and when they failed. Hence, bank underwriting was virtually nonexistent back then - except, of course, for those loans the banks were going to keep on their own books (sometimes referred to as "portfolio loans"). 2. Qualified Mortgages. The Dodd-Frank Act has established a term, "Qualified Mortgage," or "QM," that provides a safe harbor for lenders. That is, if the loan is a QM, there is a legal presumption that the lender complied with the ATR underwriting rules, and therefore the penalties for non-compliance are either eliminated or substantially reduced, as discussed below. If a presumption is "conclusive," no amount of evidence to the contrary will defeat it. But if a presumption is "rebuttable," the party opposing the presumption has an opportunity to rebut it by introducing evidence to the contrary. For a mortgage to be a "Qualified Mortgage," it must meet the following requirements: - All of the "Non-Traditional" Loan Features Must be Removed - This refers to features that we saw in the past, e.g. negative amortization, interest-only payments, and certain balloon payments.[5] - The loan may not exceed 30 years. - If the loan is for $100,000 or more, it cannot have points or fees greater than 3% of the total loan amount. There are different and stricter limits for smaller loans. Certain "bona fide discount points" for prime loans are not included in these limits. - There is an Income Verification and Monthly Debt-to-Income Ratio Cap; The borrower's total monthly debt-to-income ratio (i.e. all housing and non-housing expenses, such as food, automobile, child care, etc.) can be no greater than 43%. - Monthly payments must be based on the highest payment that will apply during the first five years of the loan. The presumptions afforded to lenders making QM loans gives lender protection as follows: - Safe Harbor QM loans - Conclusive Presumption. These are prime loans that (a) Meet the ATR compliance rules including the underwriting requirements above; (b) Are secured by a first lien on the residence; and (c) Carry an interest rate that is less than 1.5% higher than the average prime rate available.[7] The presumption of ATR compliance is conclusive. It is a complete safe harbor. - Higher-Priced QM Loans - Rebuttable Presumption. Here, the presumption of ATR compliance is rebuttable. These loans include first-position liens with an interest rate of equal to or greater than 1.5% over the available prime rate. Essentially, these loans are "higher priced" because the borrowers' credit is less than prime, i.e. the loan is, in the vernacular, "sub-prime." Noncompliance with the ATR Rules. Violations of the ATR rules are harsh, and likely to stifle any types of loans that hint of non-compliance. If a material violation is established, the borrower would have the ability to recover back all of the finance charges and fees paid, plus actual damages, statutory damages, attorney fees and court costs. The plaintiff's bar and the class action bar must be sharpening their knives. There is a three year statute of limitations from the date the violation occurred. Conclusion. I marvel at the complexity of these laws which have been implemented to "protect" consumers by confusing creditors - especially small creditors, such as park owners selling formerly abandoned homes to fill a space and provide affordable housing. If these small transactions caused the credit and housing crisis of 2008 and the ensuing Great Recession, perhaps I could understand. But they didn'. What we're are seeing is a huge net of bureaucratic regulation that has been cast over even the smallest of transactions under the guise of consumer protection. Going forward into 2014, my suggestion is for park owners to decide if: (a) They want to handle these transactions without the use of a MLO (which will add several hundred dollars to each sale) or (b) Go it alone, with knowledge that they will still be expected to comply with the ATR and QM rules. If the latter, my suggestion is to create the simplest of paper transactions, with a market rate interest, no adjustable rates, and a balloon that is not less than five years.

WHAT DOES THE LAW SAY?

The Fair Housing Act (FHA) bans housing discrimination based on race, color, religion, sex, national origin, familial status, or disability—what’s known as “protected classes.”

Congress added familial status to the list of federally protected classes when it amended the FHA in 1988. In a nutshell, the familial status provisions make it unlawful to discriminate against applicants or residents because they have, or expect to have, a child under 18 in the household. Specifically, the FHA’s ban on discrimination based on familial status apply to one or more children under 18 living with:

• A parent;
• An individual with legal custody; or
• An individual who has the written permission of the parent or custodian.

The familial status provisions also apply to pregnant woman and anyone in the process of securing legal custody of one or more children under 18.

Nevertheless, Congress recognized the need to preserve housing specifically designed to meet the needs of senior citizens. Consequently, the 1988 amendment created an exemption from the FHA’s familial status requirements for communities that qualified as “housing for older persons.” Congress later amended the law in the Housing for Older Persons Act of 1995 (HOPA), resulting in the current version of the federal exemption for senior housing.

The exemption allows senior housing communities that meet specific requirements to legally exclude families with children. The exemption applies to housing communities or facilities, which are governed by a common set of rules, regulations, or restrictions. A portion of a single building isn’t considered a housing facility or community, according to HUD. The senior housing exemption applies only to the FHA’s familial status provisions; communities must still abide by the law’s protections based on race, color, national origin, religion, sex, and disability.

The law describes three types of communities that are eligible for the senior housing exemption:

1. Publicly funded senior housing communities: Housing communities where HUD has determined that the dwelling is specifically designed for and occupied by elderly persons under a federal, state, or local government program;
2. 62-and-older communities: Communities intended for, and occupied solely by, persons who are 62 or older; and
3. 55-and-older communities: Communities that house at least one person who is 55 or older in at least 80 percent of the occupied units and adheres to a policy that demonstrates intent to house persons who are 55 or older.

7 RULES TO FOLLOW TO AVOID FAIR HOUSING TROUBLE

IN SENIOR HOUSING COMMUNITIES

Rule #1: Comply with Technical Requirements for Senior Housing Exemption

Senior communities must adopt policies and procedures to ensure strict compliance with the technical requirements of the senior housing exemption. If you don’t comply with the law’s requirements, then you lose the exemption, which in essence makes your community automatically liable for excluding or discriminating against families with children. 

Complying with the law governing the 62-and-older exemption is relatively straightforward. To qualify, the community must be intended for and occupied solely by persons aged 62 and older. For example, HUD regulations explain that a 62-and-older community would have to refuse the application of a 62-year-old man whose wife is 59. In the same vein, a community would lose its exemption if it allowed continued residency by a current resident who married someone under the age of 62.

Complying with the law governing the 55-and-older exemption is more complicated. To qualify, the community must satisfy each of the following requirements:

• At least 80 percent of the occupied units must have at least one occupant who is 55 years of age or older;
• The community must publish and adhere to policies and procedures that demonstrate the intent to operate as “55 or older” housing; and
• The community must comply with HUD’s regulatory requirements for age verification of residents.

1. 80 percent rule. To meet this requirement, a community must ensure that at least one person 55 or older lives in 80 percent of its occupied units. The law doesn’t restrict the ages of the other occupants in those units. Furthermore, there are no age limits for the occupants of the other 20 percent, so communities may accept families with children, although they don’t have to do so.

The 80 percent rule applies to the percentage of “occupied units,” which includes temporarily vacant units if the primary occupant has resided in the unit during the past year and intends to return on a periodic basis. That means that a unit would count toward the 80 percent requirement if its 55-year-old occupant resided in the unit for only part of each year.

To maintain eligibility for the exemption, it’s a good idea to ensure that more than 80 percent of your occupied units are occupied by at least one person aged 55 or older. If you skate too close to the line, your community could be forced into a difficult situation—for example, if a 60-year-old resident dies, leaving a 54-year-old surviving spouse.

To prevent just such a problem, HUD advises communities to plan with care when renting the 20 percent portion of the remaining units to incoming households under age 55. Such planning should address notice to incoming households under the age of 55 regarding how the community will proceed in the event that the 80 percent requirement is threatened.

2. Intent to operate as senior housing. A community must publish and adhere to policies and procedures that demonstrate its intent to operate as housing for persons 55 years of age or older. HUD offers some examples of the types of policies and procedures to satisfy this requirement, including:

• The written rules, regulations, lease provisions, or other restrictions;
• The actual practices of the community used to enforce the rules;
• The kind of advertising used to attract prospective residents to the community as well as the manner in which the community is described to prospective residents; and
• The community’s age-verification procedures and its ability to produce, in response to a familial status complaint, verification of required occupancy.

3. Verification of occupancy. To qualify under the 55-and-older exemption, communities must able to produce verification of compliance with the 80 percent rule through reliable surveys and affidavits.

HUD regulations require communities to develop procedures to routinely determine the occupancy of each unit, including the identification of whether at least one occupant is 55 or older. The procedures may be part of the normal leasing arrangement. And, every two years, communities must update, through surveys or other means, the initial information to verify that the unit is occupied by at least one resident age 55 or older.

In addition, communities must establish procedures to verify the age of the occupants in units occupied by persons 55 and older through reliable documentation, such as birth certificates, driver’s licenses, passports, immigration cards, military identification, and other official documents that show a birth date. HUD regulations also allow a certification signed by any member of the household aged 18 or older asserting that at least one person in the unit is 55 or older.

Rule #2: Market Your Community as Senior Housing

For 55+ communities, it’s essential to ensure that your advertising and marketing doesn’t undercut your ability to qualify for the senior housing exemption.

To qualify for the senior exemption, the law requires communities to demonstrate an intent to provide housing for older persons. The manner in which your community is described to potential residents is among the relevant factors listed in HUD regulations to determine whether a community has complied with the intent requirement. Using the wrong words to describe yourself not only may trigger a fair housing complaint, but also undercut your ability to demonstrate your intent to operate as “55 or older” housing.

As an example, fair housing expert Doug Chasick points to the increasing number of housing developments that market themselves as “Active Adult” or “Empty Nester” communities. Yet, he points out, using the term “Adult Only” housing was outlawed back in 1988, when President Reagan signed amendments to the FHA into law. He says that some state and local enforcement agencies claim that using these phrases are always illegal because they’re incompatible with the intent requirement.

HUD doesn’t take it that far. It’s true that HUD regulations state that “Phrases such as “adult living,” “adult community,” or similar statements in any written advertisement or prospectus are not consistent with the intent that the housing facility or community intends to operate as housing for persons 55 years of age or older. But HUD says that the use of these terms does not, by itself, destroy the community’s ability to meet the intent requirement, according to HUD. If a facility or community has clearly shown in other ways that it intends to operate as housing for older persons, meets the 80 percent requirement, and has in place age verification procedures, then HUD says that the intent requirement can be met even if the term “adult” is occasionally used to describe it.

That’s not to say that Chasick says it’s a good idea to use those terms in your advertising or marketing materials. In fact, he recommends against it unless you want to be caught up in an expensive investigation or enforcement action. Instead, Chasick recommends using words like “senior housing,” “senior living community,” “a 55 and older community,” or even a “55 and Better Community” when describing your community to demonstrate your intent to operate as housing for older persons.

Coach’s Tip: Chasick warns against using the phrase “active adult” in your advertising and marketing materials. Every senior should be welcome, whether they’re active or not, he says.

Rule #3: Don’t Discriminate Based on Race or Other Protected Characteristics

The FHA’s senior housing exemption is limited: It offers protection from federal fair housing claims based upon familial status as long as your community meets the FHA’s requirements to qualify as housing for older persons. It doesn’t exempt senior housing communities from any claims based on race, color, national origin, religion, sex, or disability, or other characteristic protected under state or local law.

That means that senior communities must take steps not only to qualify under the senior housing exemption, but also to ensure they don’t exclude or otherwise discriminate against applicants or residents based on race or other protected characteristic. For example, senior communities must adopt nondiscriminatory policies and procedures governing the application process and treatment of residents in addition to complying with the age-verification and other requirements to qualify for the senior housing exemption. And train your staff to apply those policies consistently to all applicants and residents, regardless of race, color, national origin, religion, sex, or disability, or other characteristic protected under state or local law.

Rule #4: Enforce Rules to Prevent Harassment by or Against Residents

Take steps to enforce rules to prevent harassment or other misconduct by or against residents. If a resident complains about being harassed by other residents based on her race, sex, or any other protected class, then you should take the complaints seriously.

You shouldn’t be expected to police the behavior of your residents, but you should make it clear that bullying or any other forms of harassment based on protected characteristics won’t be tolerated. Depending on the circumstances, you could face liability under fair housing law if you knew that a resident was subjected to severe and persistent abuse from other residents, but you did nothing to stop it.

Example: In August 2018, a federal court reinstated a fair housing case against an Illinois retirement community for harassment and retaliation. The complaint alleged that the resident endured months of physical and verbal abuse by other residents because of her sexual orientation, and that despite her complaints, the community did nothing to stop it and in fact, retaliated against her because of her complaints.

Fair housing law prohibits discriminatory harassment that creates a hostile housing environment. To prove the claim, the resident had to prove that: (1) she endured unwelcome harassment based on a protected characteristic; (2) the harassment was severe or pervasive enough to interfere with her tenancy; and (3) there was reason to hold the community responsible.

The resident’s complaint satisfied the first and second requirements. She alleged that she was subjected to unwelcome harassment based on her sex, and the community agreed that the court’s earlier ruling—that employment discrimination based on sexual orientation qualifies as discrimination based on sex—applied equally to housing discrimination claims. And the alleged harassment could be viewed as both severe and pervasive—for 15 months, she was bombarded with threats, slurs, derisive comments about her families, physical violence, and spit.

The complaint also satisfied the third requirement. When the case goes back for further proceedings, the focus will be on the management defendants to determine whether they had actual knowledge of the severe harassment that the resident was enduring and whether they were deliberately indifferent to it. If so, then they subjected the resident to conduct that the FHA forbids [Wetzel v. Glen St. Andrew Living Community, August 2018].

Editor’s Note: The appeals court’s ruling—that discrimination based on sexual orientation qualifies as sex discrimination—applies to all the states within the court’s jurisdiction, including Illinois, Indiana, and Wisconsin. But more recently, a court in Missouri came to the opposite conclusion—that discrimination claims based on sexual harassment don’t qualify as sex discrimination—and dismissed a complaint filed by a married lesbian couple who alleged that a senior living community turned them away because of their sexual orientation [Walsh v. Friendship Village of South County, January 2019].

Rule #5: Watch for Potential Disability Discrimination Claims

Senior housing communities must pay particular attention to fair housing protections for individuals with disabilities. The FHA prohibits communities from excluding individuals with disabilities or discriminating against them in the terms, conditions, and privileges of the tenancy.

Example: In December 2018, the owners and operators of a California senior housing complex agreed to pay $2,500 to resolve claims that they violated state fair housing laws by denying housing to a prospective resident because she has a disability.

In her complaint, the prospect alleged that the property manager initially approved her tenancy application but rescinded the approval after meeting her and seeing that she uses a wheelchair. The prospect’s daughter had handled most aspects of the application process, including viewing the unit. When the prospect arrived in a wheelchair to sign the lease, the property manager allegedly refused to rent her the unit and accused her and her daughter of misrepresenting the prospect’s identity by bringing other individuals to view the unit.

“The Fair Employment and Housing Act promises that all tenants, regardless of disability, have equal access to housing,” Kevin Kish, Director of the California Department of Fair Employment and Housing, in a statement. “Housing providers have a legal obligation to eliminate unlawful bias from every stage of the housing application process.”

Fair housing law bans discrimination against applicants and residents because they—or someone they’re associated with—is a member of a protected class. HUD says that the FHA’s disability provisions were intended to prohibit not only discrimination against the named tenant, “but also to prohibit denial or housing opportunities to applicants because they have children, parents, friends, spouses, roommates, patients, subtenants or other associates with disabilities.”

Example: In December 2018, HUD announced that a New Jersey condo association representing residents of a 55-and-older condominium development has settled a complaint alleging that it refused to sell a condo to a man with disabilities and his wife because the couple planned to have their adult disabled daughter live with them. The settlement requires the association to pay a $9,000 civil penalty to the United States, undergo fair housing training, and make changes to the associations’ bylaws as they relate to reasonable accommodations. The wife, now a widow, is pursuing claims against the association in state court. The association denies that it discriminated against the family.

“No family whose members have disabilities should be denied the reasonable accommodations they need to make a home for themselves,” Anna María Farías, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity, said in a statement. “Hopefully, today’s ruling will remind homeowner associations of their obligations under the Fair Housing Act and encourage them to follow the law” [Secretary, HUD v. Tamaron Association, December 2018].

Senior communities must be prepared to comply with the full array of disability protections. For example, the FHA requires communities to make reasonable accommodations to rules, policies, practices, or services to enable an individual with a disability to fully enjoy use of the property. The law also requires owners to permit residents with a disability, at their expense, to make reasonable modifications to the housing if necessary to afford them full enjoyment of the premises.

Example: In December 2017, the owner and property manager of a California community agreed to pay $11,000 to resolve a HUD complaint alleging disability discrimination against a resident with a mobility impairment. According to her complaint, the resident requested to have a live-in aide and a key to a locked gate near her unit to make it easier for her to come and go. In both instances, she said that the owner and property manager asked her intrusive questions about her disability, challenged whether she really had a disability, asserted that the development was for individuals who could live independently, and ultimately denied her requests.

“Residents with disabilities have the right to reasonable accommodations that allow them to use and enjoy their home, without unnecessary and invasive questioning,” Anna María Farías, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity, said in a statement. “HUD will continue to work with housing providers to ensure they meet their obligation to comply with national fair housing laws.”

Example: In December 2018, the Fair Housing Justice Center (FHJC) announced that a settlement has been reached with the remaining defendants in two federal lawsuits against the operators of dozens of nursing homes and assisted living facilities for allegedly refusing to make American Sign Language (ASL) interpreter services available to deaf and hard-of-hearing residents. Though denying the allegations, the defendants in the latest settlement agreed to pay $245,675 in damages and attorney’s fees to resolve the case.

The FHJC says that the settlements in these cases ensures that deaf and hard-of-hearing people will have access to ASL services and other auxiliary aids and services as a reasonable accommodation in 61 nursing homes and 35 assisted living facilities in the New York City region. The settlement agreements reached with the defendants in these two cases also yielded a total monetary recovery of nearly $1.2 million in damages and attorney’s fees.

Rule #6: Review ‘Independent Living’ Requirements

Depending on the circumstances, you could face a fair housing complaint for imposing independent living requirements on applicants or residents. Courts have found that a policy requiring applicants to demonstrate an ability to live independently violates fair housing laws protecting individuals with disabilities [Cason v. Rochester Housing Authority, August 1990].

Example: In September 2017, the owner and managers of a 41-unit community in California agreed to pay $18,500 to resolve allegations of discrimination against elderly residents with disabilities who relied on support from caregivers. A fair housing organization filed the complaint on behalf of an elderly resident facing eviction after returning from the hospital with support from a part-time caregiver. Allegedly, the owner and property manager said that they didn’t want the “liability” of her remaining in her home, threatened to call the county to have her “removed,” ordered her to move out, and asked invasive questions about the extent of her disabilities. According to the organization’s complaint, its investigation corroborated the resident’s allegations and revealed that testers calling for disabled relatives were told that the complex was for “independent living” and people who “can take care of themselves.”

Example: In Michigan, fair housing advocates recently sued an affordable senior housing apartment complex, alleging that the community applies “independent living” requirements to force residents with disabilities to move, even if those residents are meeting all the requirements of the lease. The complaint asks the court to recognize the community’s practices as discriminatory and prevent the complex from forcing tenants with disabilities to leave their homes when they remain capable of meeting all of their lease obligations.

“Civil rights laws ensure that people with disabilities can decide for themselves where and how to live in the community of their choosing,” says Susan Silverstein, Senior Attorney at AARP Foundation. “The law doesn’t allow landlords to refuse to accommodate tenants with disabilities,” adds a lawyer for the Michigan Clinical Law Program, “and it certainly doesn’t allow landlords to refuse to let tenants age in place just because they might need some outside help.”

Example: And in New York, fair housing advocates and two individuals sued the state and four adult care facilities, alleging that they maintained and enforced blanket policies barring wheelchair users, regardless of their individual needs or abilities, and steered applicants who use wheelchairs to nursing homes.

One of the individual plaintiffs, an elderly woman with disabilities, alleged that she was barred from returning to one of the communities once she began using a wheelchair. According to the woman, the community tried to evict her because of an internal policy barring admission of people who use wheelchairs and state health department regulations that supported such policies at these and other facilities.

The lawsuit also alleges that New York State promotes disability discrimination through its regulations and policies, including its policy permitting adult homes to ban wheelchair users from admission. Until recently, state health department regulations stated that adult homes and assisted living programs should not admit or retain people who are “chronically chairfast.”

The state has since amended the regulations to eliminate the phrase “chronically chairfast” and to add language that operators may not exclude individuals solely because they primarily use a wheelchair for mobility and must make reasonable accommodations as necessary to comply with the law. Last fall, the court issued an order directing the community to allow the elderly woman to return to her home. The case is still pending in federal court.

Rule #7: Comply with Applicable State and Local Laws

It’s critical to review applicable state and local fair housing laws because the laws affecting senior housing may vary substantially, depending on your location. For example, HUD points out that federal fair housing law doesn’t cover age discrimination, which is a protected characteristic under some state and local fair housing laws.

Moreover, HUD notes that some state and local governments with fair housing laws that have been determined to be substantially similar to the federal law may not include an exemption from the familial status discrimination for housing for older persons.

Alternatively, some state or local laws impose different standards for the senior housing exemption. In California, for example, the legislature adopted more stringent requirements on senior housing than is required under the FHA “in recognition of the acute shortage of housing for families with children” in that state. The law imposes specific requirements related to accessibility, common areas, and refuse collection.

Still other state and local laws apply an older version of the federal exemption. Under the original 1988 legislation, 55-and-older communities had to have “significant facilities and services specifically designed to meet the physical or social needs of older persons” to qualify for the exemption.

Though Congress eliminated the “significant services and facilities” requirement from federal fair housing law, some states didn’t follow suit. In Georgia, for example, communities are still required to furnish “significant facilities and services specifically designed to meet the physical or social needs of older persons” to qualify for the senior housing exemption.

Coach’s Tip: HUD urges communities to check all relevant state, local, and federal laws, as well as any requirements imposed as a term of governmental financial assistance before implementing policies and procedures that limit residents’ eligibility. Because of the complexity of the issues involved, you should get legal advice from an attorney well versed in the legal requirements for senior housing issues in your jurisdiction. 

• Fair Housing Act: 42 USC §3601 et seq.

Coach Source

Douglas D. Chasick, CPM, CAPS, CAS, ADV. RAM, CLP, SLE, CDEI: The Fair Housing Institute, Inc.; Norcross, GA;

Answer:  Absent an agreement that the Landlord has assumed this responsibility, ORS 90.740(4) provides that maintenance of the Space is the Tenant’s responsibility. This includes the following:

      (b) Keeping the rented space in every part free from all accumulations of debris, filth, rubbish, garbage, rodents and vermin as the condition of the rented space permits and to the extent that the tenant is responsible for causing the problem. The tenant shall cooperate to a reasonable extent in assisting the landlord in any reasonable effort to remedy the problem;

***

      (h) Maintaining, watering and mowing or pruning any shrubbery or grass on the rented space;

      (i) Maintaining and watering trees, including cleanup and removal of fallen branches and leaves, on the rented space for a manufactured dwelling except for hazard trees as provided in ORS 90.727.

So, to the issue of the Tenant refusing to perform their ORS 90.740(4) duties, the Landlord’s main alternative is to issue a 30-day notice to terminate the tenancy pursuant to ORS 90.630(1)(b).

However, if you do not want to pursue that remedy, you need to first understand the limitations on your right of access. Be aware that the issue of entering a Tenant’s Space is fraught with risk relating to Tenant claims of damage to the property and lack of legal consent. During the tenancy, a Landlord’s rights are governed by ORS 90.322, which limits access to:

• Inspection of the premises;
• Making necessary or agreed repairs, decorations, alterations or improvements;

• Supplying necessary or agreed services, perform agreed yard maintenance or grounds keeping; or
• Exhibiting the dwelling unit to prospective or actual purchasers, mortgagees, tenants, workers or contractors.

However, assuming no emergency,[1] and absent a written agreement providing otherwise, Landlords must give at least 24-hours’ actual notice[2] of the intent to enter, but only at reasonable times. An “unreasonable time" is defined as: “…a time of day, day of the week or particular time that conflicts with the tenant's reasonable and specific plans to use the premises.” The open-ended nature of this language leaves room for argument, but my interpretation (without reading the case law) on what should be reasonable is weekdays between  9:00 AM and 5:00 PM, and Saturdays, 10:00 AM – 4:00 PM. I would avoid Sundays if possible, unless with Tenant’s consent.

Conclusion. I do not believe accessing a Tenant’s Space to perform work (except in the case of an emergency) is a good option because of the many things that could go wrong. I assume you have already made several reasonable attempts via personal contact, telephone and/or email to secure the Tenant’s cooperation and informed him/her that if the requested work is not performed, you intend to gain access, perform the work, and send out a bill for services. Knowing his recalcitrance, what makes you believe the Tenant will be OK with you or your contractor taking self-help action? And how are you going to determine the cost? Is it reasonable? Will the work be done to current standards? And by the way, is your insurance carrier going to cover the cost of defending you when the Tenant’s lawsuit is filed?

The only reasonable basis for proceeding down this risky path would be to have this remedy clearly defined in your Rules and Regulations. What would it look like? That’s up to your attorney, but for starters, you might list the parade of horribles that could go wrong, and proceed from there. And if that is not enough to dissuade you from this undertaking, know this: Notwithstanding your plans, the statute allows the Tenant the right to deny access by giving you “actual notice” at any time prior to entry. The next stop will be court.

Under these circumstances, a 30-day notice to terminate the tenancy may be the most effective tool in either securing the Tenant’s cooperation - or eviction. Good luck!

[1] “Emergency” includes but is not limited to a repair problem that, unless remedied immediately, is likely to cause serious damage to the premises. If a landlord makes an emergency entry in the tenant’s absence, the landlord shall give the tenant actual notice within 24 hours after the entry, and the notice shall include the fact of the entry, the date and time 

[2] This term is defined in governed by ORS 90.150, and includes verbal and written notice. It should be closely reviewed before proceeding.

Answer. ORS 90.322(1)(f) says the landlord must give '_at least 24 hours actual notice of the intent of the landlord to enter and the landlord or landlord's agent may enter only at reasonable times... ." (Italics mine.)

The statute does not say the landlord has to give the exact date and the exact time. It has been judicially construed in Oregon that a notice such as yours is sufficient, since it exceeds the 24 minimum requirement. See, Resources Northwest, Inc. v. William Rau, 173 Or. App. 500 (2001).

This is just for access to the space - not the home - so I don't seen anything unreasonable about access in this fashion. It's not disruptive. Of course, even with a proper notice, a tenant can deny access if the requested time is unreasonable. (See, ORS 90.322(1)(e)(ii)).

I had this occur at a park several years ago, and the tenants ended up staying on the higher base rent which was not reduced as it was for those who permitted access for the submetering. The noon-cooperative tenants soon saw the error of their ways, as their neighbors had lower rent and were able to control their water bills by reduced use.

Tenants should know that ORS 90.322(7) provides that: "If the tenant refuses to allow lawful access, the landlord may obtain injunctive relief to compel access or may terminate the rental agreement under ORS 90.392 (Termination of rental agreement by landlord for cause) and take possession as provided in ORS 105.105 (Entry to be lawful and peaceable only) . In addition, the landlord may recover actual damages." (Italics mine.)

I suspect a landlord denied access would suffer financial damage if their submetering schedule was interrupted, so the tenants could be looking at damage claims by denying access. There would also be a right of attorney fees under ORS 90.255.

First up: Sexual harassment. Accusations against high-profile celebrities, politicians, and media moguls, fueled by the #MeToo movement, have raised awareness and pushed the issue into the national consciousness. Likewise, it’s become a top priority for officials in the Justice Department and HUD, which continue to come down hard on those accused of sexual harassment against prospects, applicants, and residents. Meanwhile, the victims of sexual harassment in rental housing continue to turn to the courts, either on their own or with the help of fair housing advocates, to seek redress for their injuries.  

Next up: Tenant-on-tenant harassment. Federal fair housing law bans not only sexual harassment, but also harassment based on race, national origin, or other protected characteristics. Most cases against community owners are based on the actions of managers or employees, but HUD regulations—and a recent court ruling—make it clear that communities face potential liability under fair housing law for tenant-on-tenant harassment under certain circumstances.

Last up: Criminal background checks. A few years ago, HUD released guidelines on how fair housing law applies to the use of criminal records by both conventional and assisted housing providers, and federal officials and fair housing advocates continue to press communities accused of discrimination based on criminal screening policies.

In this lesson, we’ll take each of these topics in turn, reviewing recent developments involving HUD, the Justice Department, and the courts, so you’ll understand how to handle these situations should they arise at your community. Finally, you can take the Coach’s Quiz to see how much you’ve learned.

SEXUAL HARASSMENT

The federal Fair Housing Act (FHA) prohibits discrimination in housing on the basis of race, color, religion, sex, national origin, disability, and familial status.  

Sexual harassment is a form of sex discrimination banned under the FHA. The basic rules haven’t changed much, but it’s becoming increasingly urgent to take all steps necessary to prevent sexual harassment at your community.

Federal officials with HUD and the Justice Department have made it a top priority to crack down on sexual harassment in housing. In 2017, the Justice Department launched an initiative to combat sexual harassment in housing, and last year, it announced the nationwide rollout of the initiative, including three major components: a new joint Task Force with HUD to combat sexual harassment in housing, an outreach toolkit to leverage the Department’s nationwide network of U.S. Attorney’s Offices, and a public awareness campaign, including the launch of a national Public Service Announcement.

Earlier this year, HUD launched a campaign and training initiative to help protect people from harassment by landlords, property managers, and maintenance workers in HUD-assisted housing. The “Call HUD: Because Sexual Harassment in Housing is Illegal” campaign aims to educate the public about what behaviors constitute sexual harassment and what to do and whom to contact if they experience it where they live. The initiative also offers sexual harassment training to employees of public housing authorities and other housing providers.

“Complaints we receive and cases we see tell us that there are some housing providers who unfortunately prey on vulnerable men and women,” Anna María Farías, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity, said in a statement. “No one should have to tolerate harassment or unwanted sexual advances in order to keep a roof over their head, and HUD will continue to take appropriate action when discrimination of this type occurs.”

Since launching the initiative, the Justice Department has filed nine lawsuits alleging a pattern or practice of sexual harassment in housing. The Department has filed or settled 14 sexual harassment cases since January 2017 and has recovered over $2.2 million for victims of sexual harassment in housing.

Example: In April 2019, the Justice Department announced a $600,000 settlement with a North Carolina property owner for allegedly subjecting 17 female prospects and residents to sexual harassment over the course of more than 10 years in violation of the Fair Housing Act and the Equal Credit Opportunity Act.

According to the complaint, the owner ran a real estate business that involved not only operating residential rental properties, but also selling homes through “owner financing,” meaning that he extended credit to individuals to purchase homes that he owned. The complaint alleged that he subjected female prospects and residents of these homes to sexual harassment by making unwanted sexual advances and comments; groping or otherwise touching their bodies without consent; offering to reduce or eliminate down payments, rent, and loan obligations in exchange for sexual favors; and taking or threatening to take adverse action against residents when they refused or objected to his advances.

Under the settlement, the owner agreed to pay $550,000 in damages to former and prospective residents, as well as a $50,000 civil penalty. The settlement also permanently bars him from participating in the rental, sale, or financing of residential properties, and requires that he relinquish his ownership interest in all such properties.

“Abusing power and control over housing and credit by committing acts of sexual harassment is an abhorrent and intolerable violation of every woman’s right to equal housing and credit opportunities,” Assistant Attorney General Eric Dreiband said in a statement. “The Justice Department, through its Sexual Harassment in Housing Initiative, will continue to aggressively enforce federal anti-discrimination laws against property managers and owners who cause women to feel unsafe in their homes.”

Example: In April 2019, the Justice Department announced that it has added more alleged victims in a sexual harassment case against the owner and manager of rental properties in Tennessee. The lawsuit alleged that the landlord, who owned and managed a mobile home park and other rental properties, sexually harassed a number of female residents at his properties. Among other things, the landlord was accused of conditioning housing or housing benefits on female residents’ agreement to engage in sexual acts; subjecting at least one female resident to unwanted sexual touching; making unwelcome sexual comments and advances to female residents; and taking adverse housing-related actions against female residents when they refused his sexual advances. The complaint contains allegations of unlawful conduct; the allegations must be proven in federal court.

“No woman should ever be subjected to sexual harassment or intimidation in her home,” Assistant Attorney General Eric Dreiband said in a statement. “The Fair Housing Act protects tenants from harassment and retaliation by their landlords, and the Justice Department will continue to vigorously enforce this law and seek relief for victims.”

“Property owners and landlords who use their position to harass residents or to attempt to trade sexual favors for rent violate the sanctity of an individual’s home, the place where they should feel the safest,” said Anna María Farías, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity. “HUD will continue to work with the Justice Department to take action against housing providers that violate the Fair Housing Act by engaging in this type of behavior.”

Example: In March 2019, the owners and former manager of more than 70 rental properties in West Virginia were held in civil contempt for failing to pay $600,000 still owing under a 2017 settlement with the Justice Department in a sexual harassment case. 

The initial complaint alleged that a married couple and related entities owned the properties and that the husband, while serving as the manager, subjected female prospects and residents to egregious sexual harassment and retaliation in violation of fair housing law. In 2015, the husband pleaded guilty to sexual abuse and other charges and was incarcerated for two years for those offenses. The wife has since died.

According to the complaint, the husband sexually harassed multiple female prospects and residents from at least 2006 until he was incarcerated. Among other things, the husband was accused of engaging in unwanted sexual touching and groping; conditioning or offering tangible housing benefits in exchange for performance of sex acts; touching himself in a sexual manner and exposing himself in the presence of female residents; making unwanted and unwelcome sexual comments and verbal sexual advances; entering the apartments of female residents without permission or notice to sexually harass them; and taking or threatening to take adverse action against female residents who refused or objected to his sexual advances.

The wife was accused of failing to take appropriate steps to remedy the discrimination after receiving tenant complaints about sexual harassment. To the contrary, she allegedly took adverse housing actions, or threatened to take such actions, in retaliation for discrimination complaints.

To resolve the case, the defendants agreed to a settlement, which required them to deposit $500,000 into a compensation fund for potential victims and pay $100,000 in civil penalties to the government. The defendants made the first $100,000 payment but failed to deposit the remaining $400,000 into the compensation fund or pay the $100,000 civil penalty as agreed a year later.

The Justice Department took the case back to court, where the judge granted its request to hold the defendants in civil contempt for failing to pay the balance of the funds owed under the 2017 settlement agreement.

The defendants didn’t deny that they owed the money and failed to submit financial documents to prove their supposed inability to pay. They conceded that they owned more than $700,000 worth of property but said that they couldn’t obtain a loan secured by the properties. They didn’t want to sell the properties because the husband wanted to transfer his interest in the properties to his children and a forced sale of the properties at below market value “would only punish innocent persons not party” to the settlement agreement.

Rejecting those claims, the court said that obtaining fair market value for the sale of their real estate wasn’t required for the defendants to satisfy their obligations under the settlement agreement. The “innocent persons” at issue in this case were the defendants’ former female residents and prospects who have yet to be compensated for the harms they suffered as a result of the husband’s conduct [U.S. v. Walden, March 2019].

Coach’s Tip: Adopt a zero-tolerance policy against sexual harassment at your community. It’s important to have a clear, written policy that sexual harassment of any kind won’t be tolerated at your community and that violations will bring prompt disciplinary action, up to and including termination. Require all employees—from leasing agents to maintenance workers, whether full or part time—to receive fair housing training, including your sexual harassment policy.

TIME OUT!

Understanding Harassment Regulations

In September 2016, HUD adopted final regulations on fair housing protections for victims of harassment based on race, color, religion, national origin, sex, familial status, or disability. The new regulations cover “quid pro quo” harassment and hostile environment harassment in both private and publicly assisted housing.

Sexual harassment in housing threatens a resident’s safety and privacy in her own home, according to HUD. In its experience enforcing the FHA, HUD said that low-income women—often racial and ethnic minorities and persons with disabilities—may be particularly vulnerable to sexual harassment in housing. HUD’s final rule on harassment in housing includes formal uniform standards for evaluating claims of hostile environment and quid pro quo harassment in the housing context:

Quid pro quo (“this for that”) harassment involves subjecting a person to an unwelcome request or demand and making submission to the request or demand a condition related to the person’s housing.

Hostile environment harassment involves subjecting a person to unwelcome conduct that’s so severe or pervasive that it interferes with or deprives the person of the right to use and enjoy the housing.

The new rules also clarify when housing providers and other covered entities or individuals may be held directly or vicariously liable under the Fair Housing Act for illegal harassment or other discriminatory housing practices.

TENANT-ON-TENANT HARASSMENT

HUD’s regulations make it clear that fair housing law bans not only sexual harassment, but also harassment based on any protected class, including race, national origin, disability, and family status.

The regulations also clarify when housing providers and other covered entities and individuals may be held liable for illegal harassment and other discriminatory housing practices. Under HUD regulations, community owners may be liable under fair housing law for failing to take prompt action to correct and end discriminatory conduct, including harassment, by their employees or agents, where they knew or should have known about it.

You don’t have only your employees or other staff members to worry about—you could face liability for tenant-on-tenant harassment under certain circumstances. Based on the HUD regulations, you could be liable under fair housing law for failing to take prompt action to correct and end a discriminatory housing practice by a third party, where you knew or should have known of the discriminatory conduct and had the power to correct it. The power to take prompt action to correct and end a discriminatory housing practice by a third party depends on the extent of your control or any other legal responsibility you may have with respect to the third party’s conduct.

Example: In March 2019, a court ruled that a New York community could be liable under the FHA for an alleged campaign of racial harassment against an African-American resident by his neighbor.

After living at the community for several months, the resident claimed that his next-door neighbor began a relentless campaign of racial harassment, abuse, and threats directed toward him. From the start of the harassment, the resident said he feared for his personal safety, so he contacted the police and the site’s management to complain.

According to the resident, his first call in March 2012 prompted police officers in the hate crimes unit to visit the site, interview witnesses, and warn the neighbor to stop threatening the resident with racial epithets. That day the resident said he filed a police report, and a police officer told the management about the neighbor’s conduct. Allegedly, the management did nothing.

In May 2012, the resident said he called the police again and filed another police report. This time, the resident said he provided written notice to management about his neighbor’s racial harassment and racial slurs directed toward him between March and May 2012. It also provided contact information for the police officers responsible for investigating the neighbor. Allegedly, the management still took no action.

According to the complaint, the neighbor’s conduct persisted to the point that the police arrested him for aggravated harassment. In August 2012, the resident said he sent a second letter informing management of the continued racial slurs directed to him and the fact that the neighbor had recently been arrested for harassment.

In September, the resident said he contacted the police and sent the management group a third letter complaining about his neighbor’s continued harassment. After receiving the letter, according to the complaint, the management group advised the site manager “not to get involved,” and the management group declined to respond or follow up. To the contrary, the resident claimed that the neighbor was allowed to stay in his unit until his lease expired and he moved out in January 2013. A few months later, the neighbor pleaded guilty to harassment and a court entered an order of protection prohibiting him from contacting the resident.

The resident sued, accusing the owner and manager of violating fair housing law by failing to take action to address a racially hostile housing environment created by his neighbor. A district court ruled against the resident and dismissed the case.

On appeal, the court reversed, ruling that the resident could pursue his claims against the community for failing to do anything to stop the neighbor from subjecting him to a racially hostile housing environment.

The court cited HUD’s regulations, which specifically state that an owner may be liable under the FHA for “[f]ailing to take prompt action to correct and end a discriminatory housing practice by a third-party” tenant where the owner “knew or should have known of the discriminatory conduct and had the power to correct it.”

The court acknowledged that the owner’s ability to control a given resident is relevant to determining the owner’s liability. In some cases, an owner may not have enough control over its residents to be held liable for failing to intervene. According to HUD, the owner can be held liable only in circumstances where the landlord had the power to take corrective action yet failed to do so. That would mean that the landlord escapes liability under the FHA if the appropriate corrective action is “beyond the scope of its power to act.”

In this case, the resident’s complaint adequately alleged that the owner and manager engaged in intentional racial discrimination by tolerating and/or facilitating a hostile environment, even though they had authority to “counsel, discipline, or evict [the neighbor] due to his continued harassment of [the resident],” and also had “intervened against other tenants at [the site] regarding non-race-related violations of their leases or of the law.”

The complaint alleged that the owner and manager had actual knowledge of the neighbor’s criminal racial harassment of the resident but, because it involved race, intentionally allowed it to continue even though they had the power to end it. It may turn out that the owner tried but failed to respond. Or it may be that the owner was powerless to evict or otherwise deal with the neighbor. But the resident was entitled further proceedings to determine the level of control the owner and management group actually exercised over tenants and whether they had the power to act to stop the neighbor’s abuse [Francis v. King Park Manor, Inc., March 2019].

Coach’s Tip: Take all necessary steps to prevent—and address—discrimination or harassment at the community. Aside from ensuring that your policies and procedures conform to fair housing law, you can reduce the likelihood of a complaint by properly training and supervising all employees—not only managers and leasing staff, but also maintenance workers and anyone else who interacts with the public. And be particularly careful when hiring and supervising outside contractors or anyone else who could be considered your agent.

Promptly address any complaints of discrimination or harassment by conducting an investigation and, if warranted, taking adequate steps to stop the offending conduct. Get legal advice if necessary, and be sure to document what you’ve done so you’ll be prepared to defend yourself in case a claim is filed against you.

Just don’t try to solve the problem by doing anything that looks like you’re punishing the victim. According to HUD regulations, taking prompt action to correct and end the discriminatory conduct may not include any action that penalizes or harms the aggrieved person, such as evicting a resident who complains to you about discrimination or harassment by an employee, agent, or another resident.

CRIMINAL BACKGROUND CHECKS

Have you reviewed your criminal screening policies lately? If it’s been a while since you last reviewed your policy, it’s important to ensure that it doesn’t run afoul of HUD’s 2016 guidelines explaining how federal fair housing law applies to the use of criminal records in both conventional and assisted housing communities.

The HUD guidance doesn’t prevent communities from screening applicants based on their criminal history, but communities could face liability under fair housing law if its criminal history policy, without justification, has a disparate impact—or discriminatory effect—on minority applicants. It’s important to review the guidance in detail, but there are some steps you should take ASAP to reduce the risk of fair housing trouble. If, for example, your policy still considers arrest records in criminal background screenings, you should make some changes immediately. HUD’s new guidelines flatly say that excluding someone based on arrest records is likely to have a discriminatory effect based on race and national origin.

Check whether your policy still lists “all felonies” or long-ago felonies as reasons not to rent to someone. If so, you may be headed for trouble because the guidelines call into question the lawfulness of excluding people based on criminal convictions—without consideration of what the conviction was for or how long ago it occurred.

Example: In January 2019, a court refused to dismiss a lawsuit filed by an applicant who claimed that a community discriminated against him on the basis of race when it denied his rental application based on its policy to automatically exclude anyone with a felony conviction from renting a unit at the community.

The applicant was an African-American man with a felony conviction. At the time he submitted his application, the applicant met the income eligibility requirement for the unit he applied for, had no prior evictions, and didn’t have a bad credit history. The community allegedly notified him that his application had been denied due to a felony on his criminal record. The applicant said he called twice to request an appeal, but no one returned his calls.

The applicant sued, accusing the community of discrimination because its criminal background policy had a disparate impact based on race. According to the complaint, the applicant alleged that the community had an outwardly neutral policy of automatically excluding anyone with a felony conviction, but the policy had a disparate impact based on race because statistics showed that blanket bans based on criminal history resulted in the denial of housing opportunities at a disproportionate rate for African-Americans and minorities.

The court rejected the community’s request to dismiss the case. The applicant could pursue his disparate impact claim because the statistical racial disparity he relied on was directly related to its alleged policy of excluding a person with a felony conviction from renting at the community [Jackson v. Tryon Park Apartments, Inc., January 2019].

Check whether your policy allows applicants to explain the background of a felony conviction. The HUD guidelines say that communities should offer applicants with criminal records an opportunity to explain the circumstances and what’s happened since then—something akin to the “interactive” process for disability-related reasonable accommodation requests.

Example: In April 2019, a court dismissed claims by an applicant who accused a public housing authority of race discrimination by denying him housing because of his criminal record.

In his complaint, the applicant alleged that he applied to be placed on the public housing waiting list, requesting placement in the first available housing with wheelchair accessibility. At the time he applied in 2016, the PHA required a credit check and criminal background check for all applicants. The policy stated that certain factors could lead to a mandatory denial, including a homicide-related offense. The policy provided applicants with the opportunity to dispute the accuracy and relevancy of the information through an informal hearing.

After an interview, the PHA denied his application for two reasons: a police record—a felony guilty plea to involuntary manslaughter in 1997—and a landlord/tenant judgment against him for $871.

At his hearing, the applicant clarified that his conviction was for a misdemeanor, not a felony, and provided an explanation for the landlord/tenant dispute: He had missed payments only because he had avoided the rental office after being sexually harassed by an employee there.

The PHA reversed its decision regarding his conviction and gave him 30 days to provide proof that he had entered a repayment plan to resolve the landlord/tenant dispute.

The applicant didn’t meet the 30-day deadline, so the PHA upheld the denial of his application. A week later, he sent in the rental payment agreement and the PHA granted his application. Eventually, he signed a lease for a unit at a PHA property.

The applicant sued, accusing the PHA of race discrimination in violation of fair housing law and his due process rights by denying his application because of his criminal record.

Siding with the PHA, the court dismissed the case. The applicant claimed that the PHA discriminated against him and violated his due process rights by refusing to house him because of his criminal record, but the exact opposite was true: Although the PHA initially found him ineligible for housing because of his homicide-related offense, the PHA reversed its decision after a hearing revealed that the offense was only a misdemeanor. Nothing in the record showed that he was the victim of housing discrimination or that he was denied due process.

“There is no evidence that the PHA’s criminal history policy violates state or federal fair housing laws or the Constitution. [The applicant’s] case presents an example of due process at work. Although the PHA may have erred in its initial decision to deny [his] application for public housing, the PHA corrected that decision after giving [the applicant] a meaningful opportunity to demonstrate the PHA’s error” [Hall v. Philadelphia Housing Authority, April 2019].

Coach’s Tip: Whatever your policy on criminal background checks, be sure that you apply it consistently—without regard to race, color, national origin, or other protected characteristics. Applying it only to applicants who are members of racial or ethnic minorities, but not to white applicants, is a sure way to trigger a fair housing complaint.

Example: In October 2018, the Justice Department sued a Tennessee community and its property management company for allegedly denying the application of an African-American applicant because of his criminal record, despite approving the rental applications of two white people with disqualifying felony convictions.

The case dates back to 2012 involving a man living with his ex-wife at the community, who completed a lease application in which he disclosed a felony conviction for writing a bad check. According to the complaint, the community’s resident selection guidelines provided for rejection of applicants who had a felony conviction within the last 10 years as well as any conviction for the sale, distribution, or manufacture of controlled substances or certain sexual offenses.

According to the applicant, the community’s resident manager denied his lease application because of the policy not to rent to felons. Allegedly, she also told him that he was no longer allowed on the property because he was a felon.

Around the same time, according to the complaint, at least two other applicants who were not African American and who had criminal records in violation of the resident selection guidelines were approved for housing at the community. Allegedly, both disclosed their convictions on their applications: The first had a conviction for felony sexual battery and was on the national sex offender database; the second pleaded guilty to felony drug charges and was serving probation [U.S. v. Dyersburg Apartments, LTD., October 2018].

TIME OUT!

Court: Tenant-Screening Services Must Comply with Fair Housing Act

In a landmark civil rights decision, a court ruled that consumer reporting agencies must comply with the FHA when conducting tenant-screening services for landlords.

Fair housing advocates filed the lawsuit against a consumer reporting agency after its tenant screening product allegedly disqualified a disabled Latino man with no criminal convictions from moving in with his mother. The complaint alleged that the company’s screening product provided landlords with an “accept or decline” decision based on an assessment of an applicant’s criminal record. The lawsuit claimed that the screening company’s product discriminates based on race, national origin, and disability in violation of the Fair Housing Act.

The court rejected the company’s claim that the case should be dismissed because fair housing laws didn’t reach its services. According to the court, the company “held itself out as a company with the knowledge and ingenuity to screen housing applicants by interpreting criminal records and specifically advertised its ability to improve ‘Fair Housing compliance.’” Because consumer reporting companies functionally make rental admission decisions for landlords that use their services, they must make those decisions in accordance with fair housing requirements [Fair Housing Center et al. v. CoreLogic Rental Property Solutions, LLC, March 2019].

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Answer:  This question relates, in part, to the Q&A that immediately preceded this one regarding the tenant who refused to maintain their Space. Please review it. The major difference here is that Tenant also has a duty to “Use electrical, water, storm water drainage and sewage disposal systems in a reasonable manner and maintain the connections to those systems;” (Emphasis added.) See, ORS 90.740(4)(f). This means that from the point of connection from the ground below the home and into the home, is the  Tenant’s responsibility.

So, to the issue of the Tenant refusing to perform their ORS 90.740(4)(f) duties, the Landlord’s best alternative is to issue a 30-day notice to terminate the tenancy pursuant to ORS 90.630(1)(b).

In answer to whether you could – following advance written notice – access the Tenant’s space and perform the repairs yourself, I strongly recommend not doing so, even if your rules or rental agreement allow for it. Tampering with the water system affecting the home could result in defective repairs and potential damages, including to Tenant health and safety. You do not want that liability.

Should you decide otherwise, be aware that the issue of entering a Tenant’s Space is fraught with risk relating to Tenant damage claims. During the tenancy, a Landlord’s rights are governed by ORS 90.322, which limits access to:

• Inspection of the premises;
• Making necessary or agreed repairs, decorations, alterations or improvements;

• Supplying necessary or agreed services, perform agreed yard maintenance or grounds keeping; or
• Exhibiting the dwelling unit to prospective or actual purchasers, mortgagees, tenants, workers or contractors.

However, assuming no emergency,[1] and absent a written agreement providing otherwise, Landlords must give at least 24-hours’ actual notice[2] of the intent to enter, but only at reasonable times. An “unreasonable time" is defined as: “…a time of day, day of the week or particular time that conflicts with the tenant's reasonable and specific plans to use the premises.” The open-ended nature of this language leaves room for argument, but my interpretation (without reading the case law) on what should be reasonable is weekdays between  9:00 AM and 5:00 PM, and Saturdays, 10:00 AM – 4:00 PM. I would avoid Sundays if possible, unless with Tenant’s consent. The best way to deal with an emergency here would be to turn off the Tenant’s water (with proper advance notice if possible, or immediately following your access.

Conclusion. Accessing a Tenant’s Space to perform repairs to the water pipes entering their home is not a good option. As soon as you become aware of the problem, notify the Tenant to immediately perform the repairs. If the tenant refuses, consider, after consulting with legal counsel, turning off the water to the space.

Under these circumstances, a 30-day notice to terminate the tenancy is the most effective tool in either securing the Tenant’s cooperation - or eviction. Deciding whether to also turn off the water would be up to your attorney’s advice. Good luck!

[1] “Emergency” includes but is not limited to a repair problem that, unless remedied immediately, is likely to cause serious damage to the premises. If a landlord makes an emergency entry in the tenant’s absence, the landlord shall give the tenant actual notice within 24 hours after the entry, and the notice shall include the fact of the entry, the date and time 

[2] This term is defined in governed by ORS 90.150, and includes verbal and written notice. It should be closely reviewed before proceeding.

Answer: All good questions. The entire statute, which is lengthy, is found at ORS 90.675. (a) Can a landlord acquire a home that is in abandonment? Yes. Assuming that the abandonment process has been formally commenced, the landlord would have to wait for the 45 day period to expire and then if the property was over $8,000, it would have to be advertised and sold via sealed bid. The landlord can bid, but must make sure that the bid is high enough that it’s not going to be snapped up by another higher bid. If the property is worth $8,000 or less, the landlord could dismantle or give away to a non-profit organization. But if the landlord wanted the home, he would have to advertise and auction and then pay the property taxes and could acquire it. (b) Can he or she bid during the sealed bid process? Yes, as mentioned above. However, sealed bids mean sealed bids – no free peek by the landlord, so he knows how much to make his bid for. The playing field must be level. (c) If no one bids on the house can the landlord purchase it and at what price? Generally this should not come up, since the landlord would normally put in his own “protective bid” which is just a credit bid and represents the amount of costs and fees he’s got into the abandonment process. Thus, if no one else were to bid, the landlord would acquire it for the “protective bid.” The above discussion does not factor in what happens if there is a lender. If there is, then the entire time frame is subject to what the lender does. If it signs and returns the Storage Agreement, then the lender will have the right to try to sell the property itself. However, if the lender does not sign and return the Storage Agreement, or otherwise fails to respond to the landlord, then its interest is “conclusively presumed to be abandoned.” Note, however, that when the home is advertised prior to the private auction, the invitation to bid submitted to the newspaper for publishing must also be provided to the lender – even though it didn’t respond to the original 45-day notice. This is sometimes forgotten, since landlords assume that if the lender didn’t respond or timely exercise their right to sell the property, they don’t have a right to know when the auction is held. They do have the right to know, and the right to bid. Forgetting this can create headaches for landlords after they have sold the property to someone else.

Last week MHCO met with representatives of the Oregon county tax assessors and successfully negotiated the elimination of abandoned home back taxes.

For those you who have been following this issue - earlier this year MHCO set out to make significant changes to ORS 90.675 that requires community owners to pay the back taxes owed on an abandoned home if they want to purchase the home and keep it in their community.  After a lengthy series of meetings with MHCO, the counties agreed to cancel unpaid back taxes on abandoned manufactured homes.

There remain technical issues, but the main hurdle - eliminating the tax obligation - has been resolved.  Here are the details of the agreement -

• No cap on the amount of back taxes to be cancelled.

• The landlord will need to file an affidavit/form (MHCO will work with the county tax assessors on the form which ultimately will be posted on MHCO.ORG). 

• The affidavit/form will state:

• That the landlord has sold or will sell the MH to an unrelated buyer;
• The buyer will live in the MH in the park;
• The sale is an arms-length transaction;
• The amount of the sale price, along with the total of the landlord's claims or costs against the manufactured home, limited to unpaid back rent, sale costs (per ORS 90.675 (13) (a) consists of the reasonable or actual cost of notice, storage for a reasonable period, and sale; presumably this includes attorney fees, but only to do these tasks), and any improvements done by the landlord to the manufactured home as part of the sale.
• The landlord may deduct from any sale proceeds the cost of storage (typically space rent) only for a reasonable period, as necessary to complete the abandonment process, to make any repairs necessary to make the manufactured home saleable, and to sell it.
• The landlord will pay any county warrant fees required for the cancellation
• The landlord will pay any amount from the sale in excess of the landlord's costs (unpaid rent, sale costs, improvement, etc.) to the county for unpaid taxes.  The landlord will be allowed to keep any excess over the unpaid back tax amount.

Later this month there will be further discussions on the details regarding the affidavit and other potential legislative issues.  As with all previous landlord-tenant coalition bills the participants in the negotiations reserve the right not to make a final commitment until the final draft is on the table.  Depending on what is or is not in that final agreement will determine MHCO's final position.  A lot can happen between now and the final draft of a bill - but today we are very happy that we have made significant progress in changing a very onerous statute that impacts every community owner who ends up wanting to buy an abandoned home in their community.

Thanks to everyone from MHCO who worked on these negotiations.  We will keep you posted on legislative developments as move in to the post election/pre legislative world.  Stay tuned!