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According to HUD, criminal background checks have a disproportionate impact on minority home seekers, largely due to disproportionate conviction and incarceration rates for minorities and others in protected classes. HUD's Guidance memo identifies methods of 'proof' that are used when analyzing a fair housing claim in the context of a housing provider who denies an applicant tenancy based in whole or in part on a criminal background check. .

In other words, even though tenancy is not denied based on direct discrimination against the applicant as a member of a protected class (race, religion, nation origin, etc.), background checks that reveal convictions could nevertheless, in HUD's view, have a disproportionately negative effect (disparate impact) on members of protected classes resulting in a discriminatory housing practice. HUD actually isn'toutlawing use of criminal background policies, but rather is aiming to prevent landlords, including Parks and Communities from using the background check information since use of these policies if that use ultimately has a discriminatory effect on people in a protected class.

HUD's New Guidance memorandum will certainly impact use of criminal background checks since many manufactured housing communities may learn that their own current policy on how to use applicant screening procedures may expose them to liability. This article will discuss two things: (1) how HUD evaluates denials based in whole or in part on use of a criminal background check; and (2) factors a community should keep in mind when formulating or employing a policy about criminal "history".

All communities are unique, and so too are the legitimate interests that a community must protect. A community's size, location, and its age all play a direct role in corresponding issues regarding safety, security, and/or criminal activity. A community's initial decision to even use a "criminal background check" policy in the first place rests largely on whether the policy will further that community's interests, be it safety, security, or crime prevention, and ultimately enhancing the living environment for all residents.

By and large, all communities share core interests. Among these are screening out financially unqualified applicants and minimizing risk to community residents by applicants convicted of recent violent crimes, drug related crimes, and/or crimes involving children,. Of course, the specific interest in maintaining a criminal background check policy varies depending upon the nature and characteristics of the community that justify the purpose.

If your community uses a "criminal background check,"here's how the typical scenario goes: Applicant seeks to lease a space, submits the required application with supporting documentation, and answers "yes" to having a prior felony conviction. Owner denies the application, on the conviction. Applicant, now angry, lodges a fair housing complaint alleging the community discriminated against him/her. Once that complaint is assigned, here's the 3-step analysis HUD will use to address the claim:

Step 1: The applicant must prove the background check policy has a discriminatory effect, meaning the policy results in a disparate impact on a group of persons in a protected class. Said applicant need only prove the policy "actually or predictably results" in a disparate impact. This will usually involve an extensive investigation of community residency applications reflecting a criminal conviction.

Step 2: If the applicant satisfies step 1, the community must then show the background check policy is justified, meaning the community must show: (a) that it has a substantial, legitimate, nondiscriminatory interest for screening an applicant's criminal background; and (b) running the criminal background checks achieves or furthers this interest.

Step 3: If the community establishes that the policy furthers a substantial interest, the burden shifts back to the applicant to prove the community interest could be served by another practice with a less discriminatory effect.

Simply put, it's a game of ping-pong with some vague standards of proof. So, what should communities do? Well, if you screen criminal backgrounds when deciding if an applicant qualifies, you should ensure that your policy stays within HUD's newly published requirements. Review your policies with your legal counsel to confirm this.

At a minimum, a community should keep the following important points in mind.

First, arrests are not sufficient. An actual conviction is required. There are also big differences between misdemeanor convictions v. felony conviction.

Second, blanket tenancy prohibitions for all convictions is not wise. Rather, a policy should focus on (1) what the conviction was for (i.e. nature and severity of the conviction); (2) when it happened (i.e. how much time has elapsed since the conviction, as recidivism risk decreases gradually); and (3) the applicant's post-conviction actions, particularly rehabilitation efforts. Keep a policy objective, with distinct standards.

Third, criminal background checks may be best when implemented as a final step in the application process, after a rental history overview, a credit check, and references. There may be applicants who do not meet a community's standards based on these other criteria, meaning a criminal background check may not be needed.

While HUD guidelines are national and set a base standard, some states may further regulate the application process by statute, meaning a community must comply with stricter standards. As always, it is important to work with your legal counsel to ensure you comply with specific standards applicable to your state.

No community wants to be on the receiving end of a discriminatory housing claim. To avoid the potential pitfalls of a "criminal background check" policy, communities should develop and employ policies in close consultation with legal counsel.

Ryan Egan is a litigation associate with the Southern California law firm, Hart King, and is a member of the firm's Manufactured Housing Industry Practice Group. You can reach Ryan directly at 714.432.8700 ext.332 or at regan@hartkinglaw.com. This article is for general information purposes and is not intended to be and should not be taken as legal advice for any reader.

WHAT DOES THE LAW SAY?

The federal Fair Housing Act (FHA) makes it illegal to refuse to rent or deny a person housing because of his or her race, color, religion, sex, handicap (disability), familial status, or national origin. Although many states also ban discrimination on the basis of a person’s criminal record, this isn’t one of the protected grounds listed in the FHA.

Question:How can criminal record discrimination be illegal if the FHA doesn’t mention it?

Answer:Refusing to rent to people with a criminal record may be an indirect form of racial, national origin, and other forms of discrimination the FHA does prohibit.

Explanation: The reason for this has to do with the so-called rule of “disparate impact” discrimination that holds that policies and practices that are neutral on their face may still be illegal if they have the effect of discriminating against a group the law protects. This is true even if there was no intent to discriminate.

Example: A fire department policy bans any persons from being promoted to the position of chief unless they have at least 10 years of service in the department. On its face, this seems like a perfectly neutral, legitimate, and nondiscriminatory policy. The problem is that the department began hiring women only five years ago. Before that, it was exclusively male. As a result, the 10-years’ service policy has the effect of excluding women from being promoted to chief and is thus a form of illegal sex discrimination.

Although the potential of disparate impact liability for criminal history restrictions began as an employment principle, the U.S. Supreme Court and HUD have made it clear that it also applies to fair housing. In 2016, HUD published guidance to address the issue. Citing the widespread racial and ethnic differences in the U.S. criminal justice system and statistics showing that across the nation, African Americans and Hispanics are arrested, convicted, and incarcerated at disproportionately higher rates than whites with respect to their share of the general population, the guidance states that barriers to housing based on criminal records are likely to have disproportionate impact on minority home seekers.

The HUD guidance also explains what owners can do to avoid disparate impact liability when carrying out criminal history screening. The eight rules below come from the guidance and later court cases applying them to actual situations.

8 RULES FOR AVOIDING DISCRIMINATION

WHEN SCREENING APPLICANTS’ CRIMINAL BACKGROUNDS

Rule #1: Continue Performing Criminal Background Checks

The starting point is to understand that nobody is saying that you must stop performing criminal background checks on applicants. On the contrary, apartment communities have every right to establish their own policies governing who may live there, as long as their standards are fair, reasonable, and nondiscriminatory—that is, that they apply equally to all applicants regardless of race, color, religion, sex, familial status, national origin, disability—or any other personal characteristic protected under state and local fair housing laws. The FHA also specifically excludes individuals who pose a direct threat to the health or safety of other individuals or whose tenancy would result in substantial physical damage to the property of others.

Moreover, courts and HUD have long recognized owners’ rights to perform background screening to ensure applicants meet their legitimate rental criteria. That includes criminal background checks to the extent that they serve the owner’s legitimate business interest in:

• Protecting their property and the safety and property of their residents;
• Ensuring that applicants can pay the rent; and
• Retaining other residents who may be fearful and leave the community if a person with a criminal record is allowed to live there.

Bottom line: The liability risk stems not from performing criminal records screening but how you perform it, including not only your screening criteria but how you use the results to make decisions about applicants.

Rule #2: Don’t Do Criminal Checks Until You Determine the Applicant Is Otherwise Qualified

Don’t perform criminal background checks unless and until you complete the credit, rental history, and other necessary checks and determine the applicant is qualified. This rule is based not so much on law as practical considerations. In addition to the legal complications, criminal checks costs time, money, and administrative effort. So, saving them for the end of the process pending the results of the other checks will enable you to avoid having to do them for applicants who aren’t qualified anyway.

Example: Texas fair housing consultant Ann Sadovsky relays the story of an owner/client facing an applicant who wanted to share the apartment with an unusual and highly undesirable pet, a 500-pound hog. “The poor client was all upset about a messy fight over the community’s no-pets policy,” Sadovsky relates. “I told him not to sweat it until after the applicant got a clear credit and rental history report.” In fact, he didn’t—and the hog issue became completely moot.

“Not that I’m comparing a hog to a person with a criminal record, but the principle of not bothering to engage with an applicant on an issue until verifying that he or she’s qualified to rent from you applies to criminal background checks,” notes Sadovsky.

Rule #3: Establish Clear, Nondiscriminatory Guidelines for Criminal Record Checks

Relying on third-party screening companies to perform actual criminal record checks the way most owners do will spare you the headaches of gathering the data yourself. But it’s how you use that data that will determine your liability. Specifically, you must make consistent, reasonable, and nondiscriminatory decisions about whether to reject applicants because they have a criminal background. The remaining rules in this lesson are designed to help you create and implement rental policies enabling you to meet that crucial compliance challenge.

Let’s start with the general rules governing when denying housing opportunities to people with a criminal record runs afoul of the FHA. The HUD guidance sets out three key questions owners should ask to evaluate whether their criminal record check policies are legally sound:

1. Does the policy have a discriminatory effect? As we explained above, excluding applicants for having a criminal record may have the effect of discriminating. But in a court or HUD administrative proceeding, the person claiming discrimination has the burden of proving that the policy under question actually does cross the line.

The most common way to show discriminatory effect is by using national, state, and/or local statistics showing that African Americans, Hispanics, and other minorities have disproportionately high arrest and conviction rates, as compared to white persons. While it doesn’t necessarily prove that a particular policy had a discriminatory effect, the HUD guidance suggests that such statistical evidence is generally enough to deny an owner’s motion to dismiss and allow the case to go to trial. And that’s crucial because it changes the negotiating leverage and pressures the owner to shell out a substantial sum of money to settle the case. 

By the Numbers:

Using Statistics to Prove Discriminatory Effect

HUD cautions owners to be aware of the discrimination risks associated with rental policies that exclude applicants because they have a criminal background. The guidance cites national statistics showing that racial and ethnic minorities face disproportionately higher rates of arrest and incarceration. According to those statistics, African Americans and Hispanics are arrested at a rate of more than double and incarcerated at a rate of nearly three times their proportion of the general population. Imprisonment rates for African-American males is almost six times greater than for white males, and for Hispanic males, it’s over twice that for non-Hispanic males.

Keep in mind that these are just national statistics. State and local statistics exhibiting similar patterns may be even more compelling in demonstrating that criminal record exclusion has a disproportionate and discriminatory effect on minorities. And, of course, most devastating of all to an owner is statistical evidence showing that the particular community’s policies had the effect of excluding minorities.

2. Is the policy necessary to achieve a substantial, legitimate, and nondiscriminatory interest? The second crucial question is whether a policy of denying housing to people with a criminal record is necessary to achieve what HUD refers to as a “substantial, legitimate, and nondiscriminatory interest” (which we’ll refer to as the “substantial interest standard”). Explanation: As noted above, it’s legitimate for owners to want to keep dangerous people out of their community. But, the guidance warns, this general interest and bald assertions based on stereotypes that individuals with criminal arrests and convictions pose a greater risk than people without criminal records isn’t enough. To justify exclusion on the basis of a criminal record, the owner must be able to prove that the policy actually does assist in protecting resident safety and property. Accordingly, blanket policies won’t work, and owners must make decisions based on the particular circumstances of the case, including how long ago the crime happened and what kind of conduct it involved. We’ll delve into these crucial details below.

3. Is there a less discriminatory alternative available? Even if the owner can show that its criminal record policy meets the substantial interest standard, it may still be unlawful if the person complaining can prove that the owner could have served that interest by adopting another policy or practice that has a less discriminatory effect. As we’ll discuss in Rule #7, such alternatives may include performing an individualized assessment of applicants found to have a criminal record.

Rule #4: Don’t Impose a Blanket Ban on Applicants with a Criminal Record

Now let’s talk about the specific things you can do to ensure that your own policy meets the criteria we explained in Rule #3. First rule of thumb: Don’t implement predetermined, blanket rules, such as automatically rejecting any applicant with a criminal record.

Remember that all forms of criminal conduct won’t satisfy the substantial interest standard justifying denying a person housing because of their criminal records. Thus, blanket policies that treat all criminal conduct the same way are highly problematic. They also make you a sitting duck for a statistical analysis showing that minorities are more apt than white persons to get arrested or convicted of a crime as compared to their percentage of the general population.

Example: A New York City community rejected an African-American applicant after learning of his felony conviction. The community claimed that its policy of automatically rejecting anyone with a felony conviction was nondiscriminatory because it applied to all applicants regardless of race, etc. The applicant conceded that the policy was neutral on its face but contended that it had the effect of racial discrimination, citing “empirical evidence showing that nationally, and in New York State, blanket bans on eligibility, based on criminal history, result in the denial of housing opportunities at a disproportionate rate for African Americans and minorities.” Although the applicant would still have to prove his claim at trial, the court found that the statistical evidence was enough to warrant holding a trial and dismissed the owner’s motion to dismiss [Jackson v. Tryon Park Apartments, Inc. et al, No. 6:2018cv06238 - Document 17 (W.D.N.Y. 2019)].

Rule #5: Reject on the Basis of Criminal Convictions, Not Arrests

While you must make decisions about whether to rent to applicants with criminal records on a case-by-case basis, there are a few bright line rules. One of them is that rejection is justified only when applicants have actually been convicted of a crime; merely being arrested isn’t enough.

Explanation: As the HUD guidance explains, an arrest, on its own, is merely an accusation and doesn’t prove that the person actually did anything wrong. Under our justice system, defendants are presumed innocent. To establish guilt, the criminal prosecutor must persuade the court or jury to convict by proving the charge beyond a reasonable doubt. Many people who get arrested are acquitted; others get their charges dropped and don’t even go to trial.

The problem with arrest records is that they often don’t show how the case was decided and whether the individual was prosecuted, convicted, or acquitted of the charges. As a result, the guidance clearly states that an arrest is not a reliable basis for determining whether a particular individual poses a potential risk to safety or property in applying the substantial interest standard.

Exception: There’s some wiggle room for eviction when a criminal background screening reveals an arrest. What you can do, according to legal experts, is ask about the underlying facts of the case. And even if the arrest hasn’t yet resulted in a conviction or conclusive and final finding of guilt, you may still be able to reject the applicant if:

• The applicant admits to committing a crime; or
• The police or other witnesses provide reliable and legally admissible information showing that a crime was committed.

Rule #6: Distinguish Between Dangerous and Non-Dangerous Convictions

The mere existence of a conviction isn’t enough to get you over the substantial interest hurdle. That’s because all crimes aren’t the same. The owner’s responsibility, the guidance clarifies, is to distinguish between criminal conduct that does indicate a risk to resident safety or property, and criminal conduct that doesn’t rise to that level. The good news is that the guidance sets out clear criteria for making such determinations:

Felonies vs. misdemeanors. The crime must be serious. And while the guidance doesn’t expressly say this, the consensus is that the conviction must be for a felony rather than a misdemeanor. But, as the NYC owner learned in the Jackson v. Tryon Parks Apartments case discussed in Rule #4 above, a blanket rule excluding any person with a felony conviction doesn’t work. The owner must take other factors into consideration.

Type of felony. The next factor to consider in applying the substantial interest standard is the nature of the felony a person was convicted of committing. Although the guidance doesn’t specify the types of felonies that owners may reasonably consider as posing a danger to safety and property, legal experts and case law suggest that the list includes convictions for:

• Illegal manufacture or distribution (but not mere possession) of drugs and other specified controlled substances;
• Sexual assaults;
• Other violent crimes like homicide, assault and battery, domestic violence, robbery, and false imprisonment; and
• Arson, vandalism, and other crimes causing significant damage to property.

How long ago the person committed the felony. The other key factor is how much time has passed. The more recent the conviction, the greater the justification for considering the person who committed it as posing a risk of danger to safety and property. Based on court cases, the unofficial window is seven years. Exception: Sexual assault convictions don’t have a shelf life. In other words, they may be grounds for denying an applicant housing regardless of how long ago they occurred.

Rule #7: Assess Each Felony Conviction Case Individually

Following Rules #4, #5, and #6 should enable you to ensure that your criminal background screening policy meets the first two of the three HUD standards, namely, the discriminatory effects and substantial interest standards. But the HUD guidance says there’s one more thing you should do to meet the third standard—that is, lack of less discriminatory alternatives: Incorporate a process for assessing each case individually that takes into account mitigating factors explaining why the person has a criminal record, such as:

• The circumstances surrounding the criminal conduct;
• How old the person was when he or she engaged in the conduct;
• Evidence that the individual has maintained a good tenant history before or after the conviction or conduct; and
• Evidence of rehabilitation efforts.

Example: A Pennsylvania public housing authority rejected an African-American applicant after the criminal records check revealed that he had pleaded guilty to involuntary manslaughter under its policy calling for mandatory denial of persons convicted of homicide offenses. The applicant claimed that the policy discriminated on the basis of race, applying the same basic logic that the applicant in the Jackson v. Tryon Parks Apartments case used to beat back the owner’s motion to dismiss. But this time the argument didn’t work.

The difference: The PHA gave rejected applicants 30 days to dispute the accuracy and relevancy of the information on which a mandatory denial was based. During the hearing, the applicant clarified that the conviction was for a misdemeanor rather than a felony. As a result, the PHA reversed its decision on the criminal conviction rejection. The problem for the applicant was that the PHA had a second reason for rejecting him, namely, a judgment awarding his previous landlord $871 in unpaid rent. And since the applicant didn’t present any evidence or mitigating information about the nonpayment judgment, the court found that the PHA had a legitimate, nondiscriminatory reason to reject the applicant and tossed his discrimination claim [Hall v. Philadelphia Housing Authority, Civil Action No. 17-5753, U.S. District Court, E.D. Pennsylvania, April 5, 2019].

Rule #8: Apply Your Screening Policy Consistently

So far, we’ve been talking about unintentional discrimination on the basis of discriminatory impact. But be aware that rejecting applicants because they have a criminal record may also constitute intentional discrimination. This can happen if you apply your policy inconsistently to people with comparable criminal histories differently based on their race, national origin, etc.

Example: A federal court ordered a Tennessee community and its property management company to pay $42,250 in damages for selectively applying its policy of disqualifying people with felony convictions to minority applicants. The evidence showed that the defendants denied an African-American applicant because of his criminal record while approving the applications of two white applicants with similar, and what should have been disqualifying, felony convictions [U.S. v. Dyersburg Apartments, Ltd., (W.D. Tenn.), Aug. 13, 2019].

The guidance lists other examples of inconsistent application of criminal records policies and practices showing intentional discrimination:

• A community has a policy against renting to people with certain convictions, but makes an exception for white, but not African-American, applicants; and
• A leasing agent helps a white applicant get his application approved despite his potentially disqualifying criminal record, but doesn’t provide the same assistance to an African-American applicant.

Measure 91 – High Times for Oregonians.  According to OregonLive.com, here, there are 23 states that currently have medical marijuana laws on the books. Oregon was one of them. On November 4, 2014, Oregon joined a smaller group of pot-friendly states (Washington, Colorado, Alaska, and the District of Columbia), to permit the recreational use of cannabis.[1]  I will leave it to the wordsmiths to explain how the term “recreational use” found its way into our lexicon when discussing the use of marijuana.  “Recreation” is the last thing one thinks about when taking a toke – or so I’m told….  

State and Federal Laws. The Federal Controlled Substances Act, 21 U.S.C. § 801, et seq., says that marijuana is illegal to grow, process, distribute, and possess, even when state law authorizes its use. Furthermore, federal law supersedes state law where there is a direct conflict between them.  That would seem to suggest that federal law, being more restrictive, would trump Oregon law.  However, this is not the case.

HUD and the Oregon Bureau of Labor and Industries, both of whom enforce fair housing violations, including discrimination based upon disabilities, have taken a laissez faire, or “hands off” approach, i.e. they are not enforcing the laws at the current time.  Accordingly, it is my belief that on both a state and federal level, landlords may properly prohibit growing, processing, distribution and possession of marijuana, even though the user holds a valid medical marijuana card. This opinion was extensively covered in my two articles, here and here.

How Are Landlords Affected by Measure 91?  Now that Oregon has legalized recreational use of pot, how does this change the equation for community owners?  The short answer is that it does not change the issues.  If anything, dealing with the use of recreational pot is the easy part.  The substance can be controlled, should an owner so desire, by a rule change, prohibiting the cultivation, processing, sale or use of marijuana within the community. 

The issues surrounding the legal use of medical marijuana, i.e. by card-carrying tenants, remains the same, i.e. can a park owner prohibit it?  I believe the answer is “Yes.”  But before explaining how, let’s look at the new law that everyone is toking talking about.

Oregon’s New Marijuana Law. An interesting article gleaned from a website called “The Daily Chronic” contains and interesting, though not exactly unbiased, analysis of Measure 91, here.  What follows is a short summary taken from the longer article:

·      It passed by 57% to 43%;

·      Public consumption of pot is prohibited;

·      The Measure does not go into effect until July 1, 2015;

·      Until that time, possession of less than one ounce of marijuana remains a misdemeanor and is subject to a fine of up to $650;

·      You must be 21 or older to possess marijuana;

·      Homemade cannabis extracts (when made with solvents)[2] are prohibited, i.e. one may not produce, process, keep, or store them;

·      Up to 1 ounce of cannabis extracts are permitted, but only if they are obtained through a licensed retailer;

·      Cultivation of up to four plants per household is permitted,[3] but they may not be visible from a public space;[4]

·      The Oregon Liquor Control Commission (“OLCC”) is in charge of regulating commercial cannabis cultivation, processing and retail sales;

·      Of course, there is a tax levied on sales. It is paid by the producers;

·      There are four types of businesses Measure 91 will license:

o   Producers, who will cultivate the pot;

o   Processors, who purchase it from the producers and convert it into assorted products with names, colors, flavors, and scents, reminiscent of the UC Berkley campus circa 1968;

o   Wholesalers, who purchase the pot and pot products for sale to retailers; and

o   Retailers, who will sell directly to consumers.

Sample Policy.  As mentioned above, I believe that community owners may both prohibit the cultivation, processing, retailing, selling and use of pot, inside the community, regardless of whether the user has a lawfully issued marijuana card.  This can be done prospectively, by including the prohibition in the Statement of Policy, the rules, and/or the rental agreement.  It can also be done by a rule change that affects the residents already in the community.  However, I do not believe it may or should be done retroactively to those legal card holders already in the community. Here is a sample policy:

Sample Cannabis Policy For A Rules Change

[To be enacted pursuant to ORS 90.610(3)]

Background. Under the Federal Controlled Substances Act, 21 U.S.C. § 801, et seq., it is illegal to manufacture, distribute, and possess marijuana, even when state law authorizes its use. In Oregon, medical use of cannabis is legal, subject to the limitations set forth in ORS 475.300 to 475.342.  Federal law supersedes state law where there is a direct conflict of laws.  The Federal Fair Housing Amendments Act provides that a disability does not allow the illegal use of a controlled substance under the Controlled Substances Act.

Our Policy. All Residents, their guests, invitees, contractors, employees, and others coming to the resident’s home, space, or common areas in the Community, are subject to the following rules regarding the manufacture, processing, distribution, sale or use of cannabis, or  for any purpose, including medical purposes.

Prohibition.  This Community strictly forbids the manufacture, processing, growing, distribution, sale or use of cannabis, or cannabis products or extracts, for any purpose, including medical purposes. Resident is responsible for informing their guests, invitees, contractors, employees, and all others of this Policy.

Reasonable Accommodation.  This Community will not agree to make a reasonable accommodation for this prohibition, including medical purposes, to any residents, their guests, invitees, contactors, employees or others coming to the Resident’s home, space or common area, based upon the State or Federal Fair Housing Laws.

Violation. Violation of this policy shall constitute a breach of the terms of Resident’s right of occupancy, and entitle Management to issue Resident a thirty (30) day curable notice of violation under ORS 90.630(1).  A repeat violation will result in a twenty (20) day non-curable notice of violation under ORS 90.630(4).  Resident is responsible for informing their guests, invitees, contactors, employees or others coming to Resident’s home, space or common area guests of this Policy and for ensuring compliance.  Notwithstanding the preceding, Management reserves the right, upon its sole discretion, to issue Resident a non-curable 24-hour notice of violation under ORS 90.396 if Resident’s violation of this policy could reasonably result in danger to the health, safety or welfare of others in the Community. 

Effective Date.  This Policy shall apply from and after _______________________ (“Effective Date”), until modified or amended.  It shall not be applied retroactively to any current Resident whose legal use of cannabis, or cannabis products or extracts for medical purposes, preceded the Effective Date.

The above sample policy can be added as an Addendum to Rental or Lease Agreements and given to prospective tenants, as well. It is sufficient to insert into the Statement of Policy, the following:

Marijuana.  This Community strictly forbids the manufacture, processing, growing, distribution, sale or use of cannabis, or cannabis products or extracts, for any purpose, including medical purposes. Resident is responsible for informing their guests, invitees, contractors, employees, and all others of this Policy.  This Community will not agree to make a reasonable accommodation for this prohibition, including for medical purposes, to any Residents, their guests, invitees, contactors, employees or others coming to the Resident’s home, space or common area, based upon the State or Federal Fair Housing Act.

[1] The World Health Organization defines cannabis here, as follows: Cannabis is a generic term used to denote the several psychoactive preparations of the plant Cannabis sativa. The major psychoactive constituent in cannabis is ∆-9 tetrahydrocannabinol (THC). Compounds which are structurally similar to THC are referred to as cannabinoids. In addition, a number of recently identified compounds that differ structurally from cannabinoids nevertheless share many of their pharmacological properties. The Mexican term 'marijuana' is frequently used in referring to cannabis leaves or other crude plant material in many countries. The unpollinated female plants are called hashish. Cannabis oil (hashish oil) is a concentrate of cannabinoids obtained by solvent extraction of the crude plant material or of the resin.

[2] For those truly interested in the extraction process using solvents, go to the following link, here.

[3] In other words, a four member household (all 21 or over) would not qualify for 16 plants.  The same rule applies to the right to possess up to one ounce of extracts. There is no multiplier effect.

[4]  I suspect that in community where the backyards are fenced, growing would be permitted so long as they were obscured from the streets and sidewalks.

Under a limited exception, senior housing communities may lawfully exclude families with children, but that exception applies only if your community satisfies specific technical requirements. Unless you meet these requirements, your community could be liable for restricting or otherwise excluding families with children from living there.

In this lesson, we’ll review the law governing familial status and offer 10 rules—the essential Dos & Don’ts—for complying with fair housing law when dealing with families with children. Finally, you can take the Coach’s Quiz to see how much you’ve learned.

WHAT DOES THE LAW SAY?

The Fair Housing Act (FHA) bans discrimination based on familial status. In general, that means you can’t 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 applies when one or more children under the age of 18 are living with:

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

It also applies to pregnant woman and anyone in the process of securing legal custody of one or more children under 18.

In a nutshell, the familial status provisions apply whenever there’s one or more children under 18 living in the household. The children may be living with one or both birth parents—whether they’re married, divorced, single, gay, or straight. The adult could also be an adoptive parent, foster parent, or legal guardian. Individuals with legal custody include family members or others approved by the courts. More broadly, the law applies to people with written permission of the parent or legal guardian.

Senior housing exemption. Under a limited exception, senior housing communities may lawfully exclude children, but only when they satisfy strict legal requirements to qualify as “housing for older persons.” The exemption applies to housing communities or facilities that are governed by a common set of rules, regulations, or restrictions. A portion of a single building is not considered a housing facility or community, according to HUD. And remember: The senior-housing exemption applies only to the FHA’s familial status provisions; the community still must abide by the law’s protections based on race, color, national origin, religion, sex, and disability.

FOLLOW 10 RULES FOR DEALING WITH FAMILIES WITH CHILDREN

Rule #1

DO Make Housing Available to Families with Children

DON’T Deny Housing Because There’s a Child in the Household

Though it’s been unlawful for more than 30 years, communities continue to run afoul of fair housing provisions by denying housing to families with children.

It’s important to remember that 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 prospects 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. In fact, simply expressing a preference against families with children can lead to a fair housing complaint.

Example: In February 2020, the owners of a California community and its leasing agency agreed to pay $10,000 to resolve allegations that its leasing agent denied a father of two children the opportunity to rent a condominium. In his HUD complaint, the father alleged that he was denied the opportunity to rent the condo because his two young daughters would be living with him part time. According to the father, the leasing agent refused to consider his application for the unit, saying, “I don’t want to waste your time or mine. Sorry.” The housing providers denied that they discriminated against the family.

“Families today face enough challenges without being denied a place to call home because they have children,” Anna María Farías, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity, said in a statement. “HUD will continue working to ensure that housing providers meet their obligation under the Fair Housing Act to treat home seekers with children equally.”

Example: In March 2019, a California rental property owner and his management company agreed to pay $15,000 to resolve a HUD complaint alleging that they refused to rent a unit to a couple because they have three children. The case came to HUD’s attention when Project Sentinel, a HUD Fair Housing Initiatives Program agency, filed a complaint alleging that the family was denied the opportunity to rent a two-bedroom unit because they have children. The housing providers denied that they discriminated against the couple.

“Families shouldn’t have their access to housing denied simply because they have children,” Farías said in a statement. “This type of discrimination has been against the law for more than 30 years, and HUD will continue working to make the public and housing providers aware of their rights and responsibilities under the Fair Housing Act.”

Rule #2

DO Follow the Rules to Qualify for the Senior Housing Exemption

DON’T Adopt or Enforce Adults-Only Policy

Although fair housing law generally prohibits discrimination based on familial status, there’s a limited exception that applies to senior housing communities that meet strict legal requirements to qualify as “housing for older persons.” Senior communities that comply with these 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’re likely to trigger a fair housing complaint if you adopt or enforce an “adults-only” policy that prevents families with children from living there.

Example: In January 2019, the California Department of Fair Employment and Housing (DFEH) announced a $10,000 settlement to resolve a fair housing complaint against the owner of a six-unit rental community and the real estate brokerage firm that managed it. Fair housing advocates filed the complaint, alleging that the property was advertised online as an “adult complex” and included a restriction of “maximum 2 adults.” During a follow-up call, the property manager allegedly told a tester that children were not allowed. DFEH found that the complex wasn’t a senior citizen housing development and that there was cause to believe a violation of state fair housing law had occurred. The case was settled prior to formal mediation.

“In California, senior housing developments can, with some exceptions, exclude residents under 55 years of age if they have at least 35 units and meet other requirements,” DFEH Director Kevin Kish said in a statement. “All other rental properties violate the law if they categorically exclude families with minor children.”

Rule #3

DO Apply Same Terms and Conditions Regardless of Familial Status

DON’T Treat Prospects Differently Because They Have Children

Treat prospects consistently, regardless of whether there are children in the household. It’s unlawful to impose different terms and conditions of a tenancy on households based on familial status, so you can’t make the leasing process more cumbersome, or quote higher rental terms, for families with children.

Example: In May 2019, a court refused to dismiss a fair housing case against a Virginia couple who engaged the services of a real estate agency to assist them in leasing their five-bedroom, five-and-a-half bath, 8,500 sq. ft. home. Shortly after it was listed for rent at $3,750 per month, a prospect contacted the realty agent about leasing the home for his multigenerational family. When the agent asked how many people would be living there, the prospect said his family consisted of him and his wife, their five minor children, and his two parents.

A few days later, the agent allegedly told the prospect that the owners “were not interested in renting to a large family.” Later, the owner allegedly told the agent that he was willing to rent to the prospects “if they paid more.” According to the prospect, the agent told him that he could rent the home if he was willing to pay “a few hundred dollars” more since there would be two families living there. The prospect said he told the agent that there would not be two families living there. The home was later rented to a family consisting of a husband, wife, and two children for the advertised rent.

The prospect sued the owners and the agency for discrimination based on familial status under state law. The prospect claimed that the agent’s “tone and communications” made him believe that the landlords feared additional wear and tear on the home because his family included five children and that the couple wasn’t willing to rent them the home, despite the prospect’s willingness to pay the advertised rent, because they were “a large family.” According to the prospect, the owner’s use of terms “additional family” and “two families” were code words to mask their preference to refuse to rent to his family because it included five children under age 18.

The court refused to dismiss the case. The owner alleged that his request for additional rent was related to the presence of the additional adults, not the minor children, in the household, but court ruled that further proceedings were needed to resolve the case [Commonwealth ex rel. Real Estate Board v. Tutt Taylor & Rankin Real Estate LLC., Virginia, May 2019].

Rule #4

DO Be Prepared to Justify Reasonableness of Occupancy Standards

DON’T Apply Unreasonably Restrictive Occupancy Standards

Fair housing law doesn’t prevent you from maintaining reasonable occupancy policies as long as you apply them consistently. But it’s illegal to set overly restrictive occupancy standards that have the effect of excluding families with children. If a community’s occupancy policy keeps the number of occupants unreasonably low, it’s likely to discourage families with children from living there unless they’re willing to pay for a larger unit.

To ensure your community’s occupancy standards pass muster, the first step is to check applicable state and local laws, which may limit occupancy based on the number of people, square footage, and other factors. In general, federal fair housing law defers to reasonable state and local restrictions on occupancy, so you have to be familiar with those laws before you set or enforce your occupancy standards.

Subject to state and local law, two persons per bedroom is a reasonable occupancy policy under federal fair housing law, according to HUD guidelines issued in 1991 known as the “Keating memo.” Nevertheless, HUD says that’s only a rule of thumb, which may not be reasonable in certain cases because of the size of the bedrooms and of the overall unit, the age of the children, the unit configuration, other physical limitations of the housing, state and local law, and other relevant factors. Among other things, HUD will look at evidence, such as discriminatory statements or rules, which may suggest that the occupancy policy was adopted as a way to restrict children from living there.

Example: In February 2020, HUD approved a settlement between fair housing advocates and a group of California property owners and managers resolving allegations of discrimination based on familial status. Fair housing advocates filed the HUD complaint, alleging that fair housing testing showed that the owners and two property managers refused to rent to families with children or offered them different lease terms and conditions. The advocates also claimed that the owners and managers implemented an unreasonably restrictive two-person-per-bedroom occupancy policy at two rental properties. The housing providers denied the allegations.

“Families looking for safe, decent housing shouldn’t be penalized because they have children,” Anna María Farías, HUD Assistant Secretary for Fair Housing and Equal Opportunity, said in a statement. “Today’s agreement reaffirms HUD’s commitment to ensuring that housing providers meet their obligation to treat all applicants the same.”

To avoid fair housing trouble, you’re better off focusing on the number of people who may occupy units, not the number of children you’d prefer to live there. HUD guidelines state that an occupancy policy that limits the number of children in a unit is less likely to be reasonable than one that limits the number of people per unit.

Example: In September 2019, the owners and managers of a large rental home in Idaho agreed to pay $15,000 to settle allegations that they refused to rent the home to a married couple because they had more than four children. Specifically, the HUD charge alleged that the homeowners discriminated against a family attempting to lease their 2,600 square foot, four-bedroom rental home because they had seven minor children. When the couple met with the property manager about renting the home, he allegedly said that the owners had set a limit of four children for the home. The charge also alleged a policy restricting the number of children was written in the rental contract.

“Persons attempting to provide a home for their family should not have their housing options limited because they have children,” Farías said in a statement. “Today’s action will hopefully serve as a reminder to all housing providers of the importance of meeting their obligations to comply with the requirements of the Fair Housing Act.”

Rule #5

DO Be Careful About Applying Occupancy Standards When a Child Joins a Household

DON’T Penalize Residents for Having a Baby

Fair housing rules banning discrimination based on familial status apply not only to families with children under 18, but also to pregnant women and others who have or are in the process of adopting or obtaining custody of a child.

Consequently, it’s unlawful to discriminate against a resident who has a baby, adopts a child, or takes custody of grandchildren. As long as the unit is large enough for the family under applicable state and local occupancy limits, you could face fair housing liability if you evict them, refuse to renew their lease, or insist that they move to a larger unit.

Example: In September 2019, the Justice Department sued the manager and owners of a Missouri apartment complex for discrimination on the basis of familial status. The case began with a HUD complaint filed by a couple, who alleged that the owners and manager terminated their tenancy because of the birth of their second child. At the time, the couple said they and one minor child had been renting their one-bedroom unit at the community for more than a year. The complaint also alleged that the community’s application form, lease agreement, and correspondence with the couple stated an explicit “No children” policy.

Example: In August 2018, HUD charged the owners of a South Dakota community and their property management company with housing discrimination for refusing to let a couple and their newborn baby stay in their one-bedroom apartment because of the community’s occupancy policies. According to the charge, shortly after the new baby arrived, the mother allegedly asked agents of the property management company how long two adults could live in a one-bedroom unit with an infant and was told that they would have to move to a two-bedroom unit. The community claimed that the two-person-per-bedroom occupancy policy was required by the city’s occupancy code. But HUD alleged that the city code was more flexible than that by allowing consideration of additional areas beyond bedrooms that may be considered for sleeping and occupancy purposes.

“Occupancy policies that exclude families with children or make it harder for them to obtain housing are unlawful and have no place in today’s often tight housing markets,” said Anna María Farías, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity.

Rule #6

DO Tell Prospects About All Units that Fit Their Needs

DON’T Engage in Unlawful Steering Based on Familial Status

Limiting a prospect’s housing choices because they have children under 18 in the household is a fair housing violation, commonly known as “steering.” In general, steering means guiding, directing, or encouraging prospects to live—or not live—at the community or in certain areas within a community based on familial status or other characteristics protected under fair housing law. Among other things, you may not restrict where families may live by making certain units, floors, or buildings off-limits to families with children.

When discussing vacancies with prospects, tell them about all available units that meet their stated requirements. Even if you believe it might be better for the children, you could trigger a discrimination complaint if you don’t tell families with children about available units on upper floors or near water features, such as a pond or pool.

Example: In December 2017, the owners and operators of a New Hampshire community agreed to pay $25,000 to settle fair housing case for discrimination based on familial status. In its complaint, the Justice Department alleged that a mother of an infant child visited the community to inquire about two-bedroom apartments but was told that the community had a policy of placing families with children under the age of 10 in first-floor units only, and that no first-floor units were available.

Rule #7

DO Adopt Child-Neutral Community Rules

DON’T Allow Rules to Unfairly Target Children

Rules governing residents’ behavior in common areas, such as hallways, parking lots, and outside spaces serve a legitimate purpose: to protect property and ensure safety. But you could trigger a discrimination claim if your rules unreasonably target children or limit their behavior.

As much as possible, avoid adopting rules that specifically target children’s behavior. Rules banning children from playing outside, unduly restricting their access to amenities, or requiring adult supervision of all children under 18 could lead to accusations that you’re treating families with children less favorably than adult households living at the community.

Example: In April 2018, the owner of a 44-unit California community agreed to a $25,000 settlement to resolve claims that the owner’s “house rules” discriminated against families with children. In a complaint filed with state officials, a family alleged that the owner had a number of rules discriminating against children who lived in the complex. According to the family, children were forbidden from using the swimming pool after 6 p.m., even though adults were free to use the pool until 9 p.m. The family also alleged that the rules prohibited children from riding bicycles, using skateboards, or playing with Hot Wheels, wagons, or balls in common areas—rules that were not applied to adults. Allegedly, the family eventually moved out of their unit due to the restrictions on where their child could play.

“DFEH is committed to ensuring that families with children are not discriminated against in housing,” Kevin Kish, Director of the Department of Fair Employment and Housing, said in a statement. “Discriminatory restrictions on children’s use of common areas are not only against the law, but make it difficult for families with children to find and stay in suitable housing.”

Coach’s Tip: Even if your community’s rules apply to all residents—not just children—you could still face a discrimination claim if you enforce the rule only against children. For example, singling out children for breaking the rules against noisy behavior in common areas—but ignoring similar transgressions by adults—could lead to a fair housing claim based on familial status.

Rule #8

DO Focus Advertising on Property, Not People

DON’T Suggest that Children Aren’t Welcome at Your Community

Under the FHA, it’s unlawful to “make, print, or publish…any notice, statement, or advertisement,” that indicates any preference, limitation, or discrimination based on familial status and other protected characteristics. This rule applies to not only discriminatory advertising, but also all kinds of statements, including:

• What you say to prospects, applicants, or residents in person or over the phone;
• What you write in notes, text messages, emails, and perhaps even social media, as well as community rules and policies;
• What you put in your advertising and marketing materials—including words and graphics—in print, online, and other media.

Unlike other prohibited practices, liability for making discriminatory statements doesn’t require proof of discriminatory intent. The test is whether an “ordinary reader or listener” would interpret the statement as indicating a preference for—or against—families with children. According to HUD guidelines, advertisements may not contain limitations on the number or ages of children, or state a preference for adults, couples, or singles.

Example: In April 2019, the owner of a Maine rental property and its rental agent agreed to pay $18,000 to settle allegations that they denied housing to families with children. A fair housing advocacy group filed the HUD complaint, alleging that the community refused to negotiate with fair housing testers posing as families with children, posted discriminatory advertisements indicating that children weren’t allowed, and made discriminatory statements to fair housing testers.

“It’s hard enough for families to find places to live that meet their needs without being denied suitable housing because they have children,” Anna María Farías, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity, said in a statement. “HUD is committed to working to ensure that housing providers comply with their Fair Housing Act obligation to treat all applicants the same, including families with children.”

Coach’s Tip: To avoid accusations of discriminatory advertising, focus on descriptions of the property available for rent, not the kind of people who may want to live there.

Rule #9

DO Abide by Legal Obligations Involving Lead-Based Paint

DON’T Deny Housing to Families with Children Due to the Presence of Lead Paint

Although lead-based paint was banned for residential use in 1978, HUD estimates that about 24 million older homes still have significant lead-based paint hazards. Lead-contaminated dust is the primary cause of lead exposure and can lead to a variety of health problems in young children; at higher levels, lead can damage a child’s kidneys and central nervous system and can even be deadly, according to HUD.

While an affected community may be tempted to avoid renting to those most at risk—young children—that practice is banned under fair housing law. Regardless of the presence of lead-based paint, you may neither exclude nor discourage families with young children from living there.

Example: In January 2019, a federal appeals court upheld a $43,500 jury verdict against a Massachusetts community. In its complaint, the Justice Department alleged that the owner of a four-unit rental property violated federal fair housing law when he refused to rent a unit to a family because they had children under 6 years old and the units had no lead certificate. According to the Justice Department, the jury found that the owner made an apartment unavailable to the family based in substantial part on their familial status and that the owner retaliated against them after they filed their HUD complaint.

Rule #10

DO Review Student Housing Policies Affecting Students with Children

DON’T Risk Fair Housing Trouble in Student Housing Based on Familial Status

Fair housing experts warn that student housing providers are risking fair housing trouble when it comes to housing decisions affecting students with minor children. If you rent to anyone, including students, it’s a violation of fair housing law to refuse to rent to a student with a young child on the same terms and conditions as you would to other applicants.

Example: In March 2020, the National Fair Housing Alliance (NFHA) announced a settlement agreement with the largest third-party property management company in the nation for campus living. NFHA reports that the agreement will open up access to 140,000 beds across 40 states and 77 cities to families with children.

The settlement resolves NFHA’s lawsuit alleging that the company violated fair housing law by discriminating against families with children. The complaint alleged that the company, although marketing itself as student housing, knowingly rented to non-students while enforcing policies that discouraged families with children, even when the parents were students.

NFHA also alleged that the company, which owns or manages hundreds of apartment buildings throughout the country, had a policy that no more than one person could reside in each bedroom. According to the complaint, the policy wouldn’t permit a mother and her 2-year-old child to live in a large one-bedroom apartment under one lease, so the student and her daughter had to sign two leases and pay double the rent.

Example: In September 2019, the Justice Department sued the owners and managers of residential rental housing in Hawaii, alleging that they violated fair housing law by refusing to rent to families with children. The lawsuit claimed that the three properties were operated as student housing for post-secondary students.

Specifically, the complaint alleged that the communities discriminated against families with children by: (1) refusing to rent or to negotiate for the rental of the three properties on the basis of familial status; (2) steering prospective renters with children who inquired about housing away from the properties to a separate property management company; and (3) making discouraging and other discriminatory statements to potential renters with children who inquired about housing, including that the housing wasn’t “suitable” or the right “fit” for families with children. The complaint contains allegations of unlawful conduct; the allegations must be proven in federal court.

“Owners and managers of rental housing must ensure their housing is open to families with children,” Assistant Attorney General Eric Dreiband of the Civil Rights Division said in a statement. “The Fair Housing Act requires it, and the Justice Department will continue both to enforce the Act vigorously and to seek relief for families victimized by unlawful discrimination.”

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

The following questions relate to the traditional landlord-tenant relationship in manufactured home parks; specifically, that the landlord rents the dirt to a tenant who owns their manufactured home. If a landlord has park owned homes, they should have their own insurance. Often times, rental agreements may require the tenant to list the landlord as an “additional insured”. Sometimes the landlords are listed, sometimes they aren’t. Sometimes they are listed as “Co-Insured”. The questions below are primarily coming out of the wildfires where several parks have been decimated. The homes have been destroyed, the tenancies have terminated and in some cases, the tenants have taken their insurance money and run (even when a portion of those insurance dollars were to be for “clean up”), leaving the debris behind for the landlord to deal with.

At the outset, I do not believe that we are dealing with “renter’s liability policies” that are defined in ORS 90.222. Rather, these are homeowner policies that protect the home. Assuming it is the latter, I do not believe ORS chapter 90 prohibits a manufactured home park landlord from requiring a tenant to name a landlord as an “Additional insured” (defined below). If these were “renter’s liability policies” then there are specific prohibitions in ORS 90.222 that prohibit a landlord from requiring a tenant to name a landlord as “Additional Insured”.

Question 1:  Our Lease states that Tenants must return the space in a clean first class condition.  We also are on all of the Tenants' insurance as a “co-insured for purposes of notification.”  Only one insurance company made the check out to the Tenant and us.  Since they are to return the space clean and we are listed as co-insured, should the insurance companies have listed us on the checks?  All the Tenants received monies for Debris Removal, do we have a right to that money? (only 30% gave it to us). And if so, how do we handle getting it?

Answer 1:  Without reviewing the specific insurance policy language at issue, it’s difficult to answer the questions, as insurers may define “co-insured” differently.  That said, generally speaking, a “co-insured” is so designated for the purpose of receiving notice from the insurer in the case of pending cancellation of the insurance, for non-pay or other reasons.  Simply being named a “co-insured” does NOT necessarily provide the full rights bestowed onto the First Named Insured, i.e. the person or entity named on the declarations page of the policy as the “insured.”

The insurance company likely was not under any obligation to list the landlord as an additional payee on any checks it issued to its insured (the tenant) just because the landlord was listed as a co-insured.  While the landlord likely has a right to pursue the money from the tenant (based on a claim of breach of contract – the rental agreement), the landlord almost certainly does not have a viable legal challenge against the insurance company, but again, the policy should be reviewed by an attorney. In most cases, a landlord’s only remedy is to sue the tenant in small claims court for the amount to make the landlord whole – mainly, to leave the space in a first class condition. Since this would not be the collection of rent, pursuing those type of damages would not violate the current restrictions on attempting to collect unpaid rent.

It may be helpful to explain the difference in the terms “First Named Insured,” “Named Insured,” “Co-insured,” and Additional Insured.”  As stated above, the “First Named Insured” is the person or entity named the insured on the declarations page.  There is only one First Named Insured on any insurance policy.  They are bestowed all of the coverages provided under the policy, have the obligation to pay the premiums, and are the ONLY person who can make any changes to the policy.

A ”Named Insured” is a person or entity that is formally added to the policy, and also is bestowed all of the coverages provided under the policy, but they are not responsible for paying any premiums, nor can they make any changes.

A “Co-insured” is almost always defined as a person or entity who is guaranteed to receive notice from the insurer in the case of pending cancellation of the insurance, for non-pay or other reasons.  A co-insured is NOT bestowed any rights to any of the coverages provided under the policy.

An “Additional Insured” (which is what the landlords should probably insist on being named in their tenant’s insurance policies moving forward) is a person or entity that is specifically named in the insurance policy (typically via an endorsement) and is bestowed certain rights under the policy, which are also typically explained in the endorsement.  A common example of an additional insured is in the construction context, where the General Contractor will require that it be named as an additional insured by all of its sub-contractors for any claims involved a specific construction project. Please note that a Landlord would also want to also be listed as “Co-Insured” because they would want to continue to get notice if a policy is not renewed.

Again, assuming these are not “Renter’s liability insurance” policies as found in ORS 90.222, then I do not believe there is a restriction.

Question 2:  Some tenants have told me that they have been told by a State Representative not to sign the right of way and to not give the Landlord's their Debris Removal monies.  The State Representative feel all parks should wait and let FEMA/ODOT and State of Oregon do the cleanup free.  Naturally there have been HUGE problems with this, the time it takes, devastation to roads and concrete, etc.  Many parks like us are trying to do some of the work ourselves and hire some of it too.  The sooner you are open, the more likely people can buy homes and get in.  Anyway, our Tenants are now refusing to give us their Debris Removal money.  The State Rep has recommended the tenants contact Legal Aid.  It's a nightmare. 

Answer 2:  This whole situation is a nightmare. I believe (and John Van Landingham agrees), that upon the destruction of the home, and assuming the tenant has vacated the space, the tenancy ended. Because the tenancy ended, the tenant no longer has possession of the premises and has no authority to give permission to access the premises. What’s the best way to handle the stuff that’s left behind? Assuming that you can affirmatively say that the tenant has no desire to assert any ownership over the debris remaining (i.e. it’s a burned out home and nothing is salvageable), you should send an abandonment notice (please remember that DWT can help with this). Upon the completion of the abandonment, you can dispose of the material as you see fit. As with the first question, if the rental agreement says the tenant is responsible for any cleanup of the space, you could seek compensation from the tenant for the clean-up costs, although actually getting compensation may likely be difficult. Hopefully, the Legislature will address this. The state representative is smart to advise tenants to contact Legal Aid; however, a tenant would be smart to contribute the portion of their insurance that was attributed to the clean-up and obtain a release from their landlord.

Question 3:  Can we use the cleanup money that the few Tenants gave us to clean up their space?

Answer 3:  Yes. Additionally, if tenants give you the money they received from insurance to clean up their space, I would not recommend any further action against the tenant (even if the clean up money is not adequate to clean up the space).  

Question 4: Should we have been listed on the insurance checks?

Answer 4:  Again, without reading the specific language of the policies, we cannot say for certain, but if the landlord was only listed as a “co-insured,” the carrier was likely under no legal obligation to list the landlord as an additional payee on checks it wrote to its insured, the tenant.  Being a co-insured only guarantees that you will be notified if the policy was being cancelled.  If you were listed as “additional insured” as defined above, then you may have a claim against the insurance company.

Question 5: Do landlords have any rights to Debris Removal Insurance money?

Answer 5:  Probably, but it is based on a claim of breach of contract on the part of the tenant, and likely only if the landlords are not otherwise compensated by FEMA or the state for cleanup.  The landlords almost certainly do not have any viable legal claim against the insurance company.

Question 6: If we have a right to the Debris Removal insurance money, how do we handle getting it?

Answer 6:  As stated above, the landlord’s likely only avenue for getting Debris Removal insurance money would be to pursue those monies from the tenant, based on a breach of contract claim, i.e. the rental agreement.

Fair Housing Testing - a tool used by enforcement officials and private fair housing organizations to ferret out unlawful housing discrimination. 

Fair housing testing involves paired testers—individuals with similar credentials but of different protected classes—who may contact your community by email, phone, your website, or by a site visit to check for differences in how they’re treated based on their race, national origin, or any other characteristics protected under federal, state, or local law.

Should you be worried that you could be targeted for fair housing testing? Not if you’re prepared—by ensuring your policies comply with fair housing law, treating all prospects fairly and consistently, thoroughly training your employees, and monitoring compliance on your own. Since it’s unlikely that you’ll know when an email, phone call, or a visit from a prospect is really from a fair housing tester, your best bet is to treat everyone contacting your community as if he or she is a fair housing tester.

In this issue, we’ll explain how fair housing testing works—and suggest seven rules to avoid problems if your community is ever subjected to fair housing testing. Then, you can take the Coach’s Quiz to see how much you’ve learned.

WHAT DOES THE LAW SAY?

The Fair Housing Act (FHA) prohibits discrimination in housing because of race, color, religion, sex, national origin, familial status, or disability. In addition, many state and local fair housing laws ban discrimination based on source of income, sexual orientation and gender identity, and other characteristics.

HUD and the Justice Department are the federal agencies charged with enforcing the FHA; in states and local governments with fair housing laws substantially equivalent to the FHA, officials in those jurisdictions handle federal as well as state and local discrimination complaints. The law also allows individuals and private advocacy organizations to file a HUD complaint or file a lawsuit directly in federal court.

HUD continues to provide millions in funding to support a wide range of fair housing enforcement, education, and outreach activities. Earlier this year, HUD awarded $16.5 million to support dozens of fair housing organizations working to confront violations of fair housing law. These new grants are on top of the $23 million awarded by HUD to existing fair housing organizations last winter. Among other things, these grants allow the groups to provide fair housing enforcement through testing in the rental and sales markets, to file fair housing complaints to HUD, and to conduct investigations.

“HUD’s efforts to fight housing discrimination are force multiplied by local fair housing organizations across the country,” HUD Secretary Ben Carson said in a statement. “These grants allow our partners to carry out the important work of rooting out unfair policies and practices and enforcing our nation’s fair housing laws.”

Meanwhile, the Justice Department has its own fair housing testing program to identify and challenge cases involving a pattern or practice of housing discrimination. According to the department, the vast majority of lawsuits filed based on testing evidence involve allegations that individuals misrepresented the availability of rental units or offered different terms and conditions based on race, national origin, disability, or family status.

Fair housing testing may be triggered by a variety of circumstances. In complaint-based testing, it’s used to verify whether an individual who claims a particular community discriminated against him based on his race or other characteristic, has a legitimate complaint. If the results of testing support the individual’s claim, then the evidence gathered may be used in court or enforcement proceedings.

Example: In August 2019, the Fair Housing Center of Central Indiana (FHCCI) announced a settlement of a complaint alleging that a real estate management company’s occupancy policy at properties in Indiana and Illinois discriminated against families with children.

According to the complaint, it all started with a phone call by an Illinois woman looking for a two-bedroom unit at one of the company’s properties. Allegedly, a leasing agent told her that two-bedroom units were available, but upon learning that that she would be living there with her spouse and three children, the leasing agent allegedly said that a family of five couldn’t live in a two-bedroom unit and refused to even schedule an appointment for a viewing.

The woman contacted HOPE Fair Housing Center, a private fair housing organization, which launched an investigation into the community’s policies. A tester posed as a married woman seeking a two-bedroom apartment for her family of two adults and three children. Allegedly, an employee told her that the community couldn’t rent a two-bedroom unit to more than four people because of “fair housing laws.” That lead to a broader investigation involving fair housing testing at four other properties managed by the company in Illinois, allegedly yielding similar results.

During the course of its investigation, HOPE contacted the FHCCI to similarly investigate company’s properties in Indiana. Allegedly, FHCCI’s testing indicated that the company enforced the same two-person-per-bedroom policy in Indiana as the woman and HOPE encountered in Illinois.

The advocacy groups filed a HUD complaint, accusing the company of systemic discrimination against families with children by enforcing an occupancy policy of no more than two people per bedroom in each apartment, regardless of the unit’s square footage or whether that unit has a den, office, loft, or other feature that could provide an additional bedroom or living area for a child. HUD didn’t make a determination as to the validity of the allegations.

The company denied any wrongdoing but agreed to settle the case. Under the settlement, the company agreed to pay $60,000 in costs and damages, to change their occupancy policy so that the policy is no more restrictive than the applicable local occupancy code, and to train their employees and agents on fair housing laws and responsibilities, along with other terms to ensure compliance with fair housing laws.

Sometimes, testing isn’t triggered by a complaint, but conducted as part of a larger fair housing investigation. Testing may be initiated by a fair housing organization on its own or at the behest of federal, state, or local enforcement officials to check whether discriminatory policies or practices are a problem at one or more communities within a geographical area.

Example: In August 2019, a Virginia community agreed to settle a lawsuit brought by the ACLU, the ACLU of Virginia, and Housing Opportunities Made Equal of Virginia, Inc. (HOME), alleging that its criminal background screening policy discriminated against people on the basis of race.

The case dates back to 2017 when HOME conducted a series of tests to assess the types and severity of the barriers individuals with criminal histories face when seeking housing in Virginia. As part of this effort, the complaint alleged that HOME investigated the criminal records policy maintained at the community, including by reviewing application materials and conducting testing. 

According to the complaint, HOME conducted a series of tests, including phone calls and site visits involving HOME workers who posed as a potential tenant with a felony conviction applying for housing at the community. In each instance, an agent allegedly told the tester that because of the felony conviction, the tester’s application would automatically be rejected. 

Under the settlement, the community agreed to change its criminal record screening policy. The revised policy considers only specific categories of offenses, excludes misdemeanor convictions, and doesn’t treat people differently based on whether the applicant is on probation or parole. The policy also ensures individualized consideration for every applicant, allowing a prospect to share information as part of the application review process, including the facts or circumstances surrounding his criminal conduct, proof of rehabilitation efforts, and evidence of a good tenant or employment history before or after the conviction or conduct.

Also, as part of the settlement, the community agreed to train employees in fair housing and make a $15,000 donation to HOME to continue HOME’s systemic work to uncover and address housing discrimination. The community also will pay damages and attorney’s fees related to the matter.

7 RULES FOR BEING PREPARED FOR FAIR HOUSING TESTERS

Rule #1: Treat Everyone as a Possible Fair Housing Tester

On any given day, you’re likely to have many interactions with prospects, including phone calls, email inquiries, Internet communications, or visits to your community. They may be inquiries about advertised vacancies or the availability of certain types of units at the community.

Our fair housing experts warn that you may never know when one of these encounters is part of a fair housing test. That’s because enforcement agencies and fair housing organizations generally exercise caution in selecting and training fair housing testers.

In any given geographical area, local fair housing organizations may maintain a pool of trained fair housing testers, who are called upon infrequently to preserve their anonymity. In general, they’re volunteers who may receive a stipend for their time and travel. Because of the potential that they may be a party or witness in any resulting litigation, they’re likely to be screened for criminal history and any conflicts of interest. In fact, HUD enforcement officials go to great pains to safeguard the confidentiality of a tester’s identity. 

So even if you have an inkling that a particular prospect is a tester—because of the type of questions being asked, the way he carries himself, or the timing of similar contacts—you really can’t be sure if a given encounter is part of a fair housing test. Testers posing as prospects may call or email your office or visit the property to check for differences in treatment based on race, national origin, disability, familial status—or other characteristics protected under state or local laws.

So why take chances? Your best bet is to treat everyone contacting or visiting your community as if he or she were part of a fair housing test. Keep personal biases out of the leasing office and treat all prospects with professional courtesy, starting with the initial contact—whether online, in an email, on the phone, or during visits to your property.

Rule #2: Incorporate Fair Housing into Your Community’s SOP

Make compliance with fair housing an integral part of your community’s standard operating procedures. No doubt, you have numerous policies, practices, and procedures governing the marketing, leasing, maintenance, and other critical operations within your community. Many are based on business decisions, while others reflect legal requirements, such as landlord-tenant laws, health and safety codes, and other regulatory obligations.

Incorporating fair housing requirements serves both—it’s not only a legal requirement, but it’s a good business decision. Making your community available to any prospect who meets objective criteria to rent meets your legal obligations under fair housing laws. And by distinguishing your reputation as an equal housing provider, you’ll decrease the risk of being targeted for fair housing testing based on suspicions about discriminatory policies or practices.

Maintain a formal written fair housing policy, affirmatively stating that your community does not discriminate on the basis of race, color, religion, national origin, sex, disability, or familial status. Be sure to include any characteristics protected under state and local laws, such as sexual orientation, marital status, or source of income. Review your policies periodically, and revise them as necessary, to reflect changing rules or trends likely to be the subject of fair housing testing. Include your fair housing policy in your rental applications and leasing agreements, and post it in your office, alongside the fair housing poster required under HUD regulations. 

Coach’s Tip: HUD’s fair housing poster affirms that your community does business in accordance with the federal fair housing law. The poster is available on HUD’s website at https://www.hud.gov/sites/documents/FAIR_HOUSING_POSTER_ENG.PDF.

Rule #3: Watch What You Say in Your Advertising

Pay particular attention to your advertising and marketing policies to avoid triggering a fair housing investigation. Fair housing law bans discriminatory statements, including advertising, whether online or in other forms of media, so you should make sure your website, ads, brochures, and other media—whether in print or online—reflect your fair housing policy.

Fair housing organizations are actively monitoring online advertising for discriminatory statements, so you should avoid questionable phrases or buzzwords that suggest a preference for or against prospective renters based on characteristics protected under federal, state, or local law. For example, you shouldn’t use words or phrases that express a preference against members of protected groups—such as “no kids”—or a preference for others—such as “perfect for singles.” Federal fair housing law prohibits housing providers from denying or limiting housing to families with children under age 18, including refusing to negotiate, making discriminatory statements, and publishing discriminatory advertisements based on familial status.

Example: In August 2019, HUD charged the owners and manager of a Colorado condo community with refusing to rent to persons under 35 years of age in violation of the FHA, which prohibits discrimination based on familial status. According to HUD’s charge, the condo management team allegedly refused to rent a unit to a fair housing tester who claimed to have a 4-year-old child.

The case came to HUD’s attention when the Denver Metro Fair Housing Center filed a complaint alleging that the owners of the condominium complex discriminated against families with children when they posted ads in a local newspaper. HUD’s charge alleges that the ads described the complex as a “private, restricted adult … community” where renters must be 35 years or older. The charge further alleges that the condominium management team refused to rent a unit to a fair housing tester who claimed to have a 4-year-old child. The charge will be heard by a U.S. administrative law judge unless any party elects for the case to be heard in federal court.

Example: In April 2019, the owner of a Maine rental property and its rental agent agreed to pay $18,000 to settle allegations that they denied housing to families with children. The case came to HUD’s attention when Pine Tree Legal Assistance, Inc., filed a complaint accusing the owner and rental agent of discrimination based on familial status by refusing to negotiate with fair housing testers posing as families with children, posting discriminatory advertisements indicating that children weren’t allowed, and making discriminatory statements to fair housing testers.

“It’s hard enough for families to find places to live that meet their needs without being denied suitable housing because they have children,” Anna María Farías, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity, said in a statement. “HUD is committed to working to ensure that housing providers comply with their Fair Housing Act obligation to treat all applicants the same, including families with children.”

Rule #4: Ensure Consistency in the Leasing Office

Focusing attention on the initial stages of the leasing process may also help you pass muster if your community is ever the subject of fair housing testing. At communities across the country, fair housing enforcement officials and advocacy groups are dispatching testers to check for differences in the way prospects are treated—in phone calls, emails, and site visits—based on protected class. Of course, differences don’t always mean discrimination, but it’s easy to jump to the conclusion that they do. That’s why it’s so important to avoid even the appearance of discriminatory intent in the way that prospects are treated.

Testing is often focused on differences in the information provided to prospects about the availability of units, so it’s important to ensure that leasing agents have accurate, up-to-date information about vacancies. The FHA makes it unlawful to discriminate against applicants for housing because of their race, color, national origin, religion, sex, familial status, or disability, including by providing different and false information about terms, conditions, and availability of rental properties.

Example: HUD recently approved a settlement between Housing Rights Center (HRC), a fair housing advocacy organization in Los Angeles, and a Virginia-based real estate investment trust company to resolve allegations that the company’s rental practices discriminated against applicants based on their race.

The case came to HUD’s attention when HRC filed a complaint alleging that the company, which operates numerous properties in the Los Angeles area, repeatedly provided more information about available units to white HRC fair housing testers who posed as prospective tenants than to black HRC testers. The company denied the allegations of racial discrimination but agreed to settle the case.

Under the settlement, the company agreed to pay $20,000 to the fair housing organization. In addition, its management and leasing staff who work with tenants at the subject property will attend fair housing training.

“Denying a rental application because of someone’s race not only robs them of a place to call home, it is also unlawful,” Anna María Farías, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity, said in a statement. “Hopefully today’s settlement will convince other housing providers of the importance of meeting their obligation to comply with the nation’s fair housing laws.”

Similarly, be sure to give prospects the same information about the terms and conditions of tenancy, such as screening criteria, rental terms, security deposits and fees, and any other relevant information. Quoting more stringent lease terms or higher rental payments to prospects based on a protected characteristic is a violation of fair housing law.

Testers also may be looking for signs of unlawful steering—that is, guiding, directing, or discouraging prospects from living in your community or certain parts of the community based on a protected characteristic. For example, it’s a violation of fair housing law to tell Hispanic prospects that they would not be happy living in your community—or showing them only units in undesirable locations.

Example: In July 2019, HUD approved a $10,000 settlement between a California fair housing group and the agents and mortgage company for a California townhome community to resolve allegations of discrimination against African-American home seekers.

The case came to HUD’s attention when the Fair Housing Council of Riverside County (FHCRC) filed a complaint alleging that fair housing tests it conducted showed that real estate agents treated testers posing as African-American home seekers less favorably than testers posing as white home seekers. Specifically, FHCRC alleged that its tests showed that African-American testers were told that there were no homes available when there were and were required to meet tougher prequalification requirements than white testers. The community and its agents denied having engaged in any discriminatory behavior.

“A person’s race should never be a factor in determining whether they have the opportunity to obtain the housing of their choice,” Anna María Farías, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity, said in a statement. “Today’s settlement represents HUD’s ongoing commitment to ensuring that individuals in positions to affect access to housing meet their obligation to comply with the Fair Housing Act.”

Rule #5: Provide Fair Housing Training to All Employees

All your employees, from your leasing staff to service workers in your maintenance, housekeeping, and landscaping operations, should receive periodic fair housing training. Although most testing efforts are addressed to your leasing office, interactions with any employee who interacts with the public could lead to a discrimination complaint, which in turn could trigger a fair housing test.

The training should cover the fundamentals of fair housing, including who is protected under federal law as well as any applicable state and local laws. It should also explain your community’s policies and what employees can and can’t do under fair housing law. Reinforce the importance of keeping personal biases out of the workplace and treating everyone at the community with courtesy and professionalism. Make sure employees understand the chain of command so they know where to go for help or to report any fair housing concerns or observations.

Managers should monitor how the leasing staff, particularly new employees, interacts with prospects on the phone, in site visits, and in Internet communications. Consider an open-door policy for management staff, so managers can hear what’s going on in the office—and encourage them to periodically sit in on phone calls or meetings with prospects and to tag along on tours.

Managers should reinforce good habits in employees, so good management means checking up from time to time on sales presentations, tours, applications, and so on, to see what staff members are doing. And it’s a good idea to have all employees sign an acknowledgement saying that they agree to abide by fair housing laws and that they understand that they may be monitored and recorded for training and compliance purposes.

Coach’s Tip: Our experts warn that you shouldn’t allow new hires to interact with the public without at least a basic understanding of fair housing law. Otherwise, they may inadvertently make well-intentioned, but inappropriate comments when answering the phone or meeting prospects. For example, an inexperienced employee could be overly curious about the nature of a prospect’s disability or cultural differences reflected in the prospect’s accent or appearance—just the type of conduct that could draw the attention of fair housing testers. For more information, see the Coach’s September 2019 lesson, “Fair Housing Boot Camp: Basic Training for New Hires.”

Rule #6: Shop Your Property

Shopping yourself—either by internal means or by hiring an outside shopping service—is one of the best ways to ensure that you won’t be caught off-guard from the results of a fair housing test. It’s an effective tool to monitor whether your employees are complying with fair housing laws and to identify any weaknesses—either in an employee’s performance or in the effectiveness of your training program.

You can do it informally, by asking people you know to pose as rental prospects, but many communities hire outside shopping services to contact the leasing office to monitor sales and marketing as well as fair housing issues.

Whatever means you use, it’s important to follow up to determine the root cause of any deficiencies detected during the shop. There could be a number of reasons why a leasing consultant may respond inappropriately to a shopper’s question. If it’s because the employee truly acted improperly, you should respond with disciplinary action. If the employee simply misunderstood fair housing requirements, you’ll know that the employee needs additional training.

Alternatively, the results of a shopping test may reveal a larger problem, for example, that your policy or training on a particular issue is unclear or incorrect. If that’s the case, you’ll have an opportunity to rectify the problem on your own—rather than having to address it after the fact if it surfaces for the first time during a fair housing test.

Rule #7: Keep Good Records

Good record keeping is important so you can respond accurately to complaints if, despite your best efforts, fair housing testing raises questions about seemingly discriminatory behavior. Retain records of all contacts, even if they don’t result in the rental of a unit or follow-up on initial inquiries. Keep copies of phone logs, guest cards, unit availability records, application forms and supporting documents, screening results, and any other document related to the application process.

It’s also important to keep good records to document when and how your community keeps track of available units. There’s a risk of a discrimination claim any time a prospect is told that there are no units available within a community. And it’s hard to defend against such claims if it turns out that the information was faulty, or if a prospect is turned away on the same day as another prospect was told that a unit was available. To ensure accurate, consistent responses to inquiries about available units, establish a process to document when units become available, and make sure everyone on your staff has up-to-date information.

Coach’s Tip: Keep your written records for as long as possible, so you can use them to defend yourself if you’re sued. Fair housing complainants have up to two years after the discrimination occurs to file in federal court or up to one year to file with HUD. And some prospects or testers may have up to six years to file a civil rights lawsuit. So it’s a good idea to check with your attorney before discarding old records.

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

1. Make sure that the rental agreement really applies to your situation.  The MHCO rental agreement comes in two flavors: (a) The month-to-month (or “periodic”) rental agreement, and (b) the lease (or fixed term) agreement.  The difference is that the month-to-month agreement runs for the number of days in the current month.  In the absence of termination by landlord or tenant, the periodic tenancy just “rolls over” month to month.  Regardless of which agreement is used, landlords renting or leasing spaces to residents in mobile home parks may not terminate them without cause.  However, a lease for at least two years carries a distinct advantage in that the park documents, i.e. the lease agreement and the park rules, may be automatically updated at the end of each lease term.  While there are certain limitations on the landlord’s right to impose new park documents on the resident, it is clearly much easier to do under a lease than a monthly rental agreement.[2]  Also, landlords using a fixed terms lease agreement must expressly incorporate any rent increase provisions into the written agreement.  The rent increase statute, ORS 90.600, applies only to periodic (e.g. month-to-month) tenancies and not fixed term tenancies.  If the home located upon the space is a recreational vehicle rather than a manufactured home, landlords should not use the standard mobile home space rental agreement.  The reason is that the mobile home park section of the landlord-tenant law does not apply to recreational vehicles.[3]  When renting space for a recreational vehicle, landlords should use an appropriate MHCO RV rental form.

1. Make sure that the rental agreement is signed by all adult tenants who will occupy the space.  This not only financially obligates them under the agreement, but it makes it easier to enforce violations against rules offenders.  Do not permit occupancy of a home until the rental agreement has been fully signed by everyone.  Trying to get signatures after-the-fact can be difficult, if not impossible.

1. Make sure that the Statement of Policy, Rules, and Rental Agreement are given to the resident and properly receipted for.  Occasionally, residents deny receiving one or more of these documents.  However, the signed receipt by the resident is legal evidence of delivery of these documents.  ORS 90.510(9) provides that a signed receipt is a defense to a claim against the landlord for the failure to deliver these documents.

1. Similarly, landlords should make sure that the rights they summarize in the Statement of Policy accurately reflect their rental agreement and rules.  When using the MHCO forms this is not a problem.  It could be, however, when different forms from different sources are used, and the Statement of Policy provides that the resident has (or does not have) certain rights that are inconsistent with the terms found in the rental agreement or rules. The Statement of Policy is not intended to be a binding legal document - it is supposed to merely summarize the resident’s rights and duties that are found in the rental agreement or rules.

1. Landlords should be sure to fully understand their rights and responsibilities given under their rental agreement form.  Not knowing your rights can result in not enforcing violations, which can lead to a waiver of those rights.[4]

1. One of the more important provisions of the rental agreement form is the one which prohibits assignment, subletting or transfer of possession of the agreement or space without the landlord’s prior written consent.  Landlords should make sure that when a resident vacates, leaving a guest or visitor at the space, immediate action is taken to either terminate the tenancy or require that the occupant promptly apply for tenancy by filling out all required documentation.  Do not accept rent from the occupant, the ex-tenant, or on the occupant’s behalf, until the issue has been thoroughly resolved.

1. Be aware that the fire insurance provision in the MHCO form does not apply unless it is specifically checked:  It requires that the resident must maintain a homeowner's policy of insurance that includes coverage for fire in an amount sufficient to replace the home, and permits the landlord to request a current copy of the policy.

1. Similarly, landlords should be sure to have the resident initial those portions of the rental agreement which require them to do so.  There are several such places found in the sections dealing with (a) sale of the home and (b) the resident’s legal obligations under the tenancy.  When these sections are not properly initialed, there remains an argument that it is not binding.  Although such an argument would not likely carry the day, it can be avoided entirely by simply making sure that when the agreement is signed, all internal provisions are properly completed, checked and initialed where appropriate.

1. The landlord’s rights upon a resident’s resale are very important and need to be fully understood by both parties.  One such section of the resale portion of the rental agreement provides that in the event the resident (or their predecessors) has/have made any improvements or alterations to the interior or exterior of the home which did not conform to all applicable local, state and federal building codes or ordinances in existence at the time the work was performed, the landlord has the right to require, as a condition of consent to the sale, that such improvement or alteration be brought up to all applicable local, state and federal building and construction standards in existence at the time of the sale.  When homes have been substantially remodeled, especially where electrical or plumbing systems are involved, this provision may be useful for the landlord to enforce in order to make sure that the proper building codes are followed.

1. Disputes are an inevitable part of being a landlord.  MHCO believes that assigning fault is less important that securing a workable resolution.  Landlords should be aware that Oregon law requires them to have an informal dispute resolution process in their rental agreement.[5]   The MHCO form provides that in the event of any dispute regarding the interpretation or enforcement of the rental agreement or the rules and regulations, either party shall have the right to have the matter handled through the alternative dispute resolution (“ADR”) process set forth in the attached MHCO Addendum, which is incorporated into the agreement.  If a resident request some form of informal dispute resolution, landlords should promptly respond in doing so.

[1] ORS 90.245 Provides prohibits the following provisions in a rental agreement: (a) Agreement to waive or forgo rights or remedies under the landlord-tenant law; (b) Agreements authorizing any person to confess judgment on a claim arising out of the rental agreement; or (c) Agreements relieving or limiting a landlord’s liability arising as a result of his or her willful misconduct or negligence or agreements requiring the tenant to indemnify the landlord for that liability or any costs connected therewith.  Any provision prohibited in ORS 90.245 is unenforceable. If a landlord deliberately uses a rental agreement containing provisions known by the landlord to be prohibited and attempts to enforce such provisions, the tenant may recover, in addition to the actual damages, an amount up to three months’ rent.

ORS 90.135 provides that “(1)f the court, as a matter of law, finds (a) A rental agreement or any provision thereof was unconscionable when made, the court may refuse to enforce the agreement, enforce the remainder of the agreement without the unconscionable provision, or limit the application of any unconscionable provision to avoid an unconscionable result****”

[2] See, ORS 90.540, 90.545, and 90.610(3) – (8).

[3] See, ORS 90.505 and 90.100(23).

[4] See, ORS 90.415.

[5] ORS 90.610(2).

Senate Bill 586 becomes law on January 1, 2020. It amends several landlord-tenant laws, but for purpose of this article, we will focus on the new mediation laws it enacted.

Participation. If any landlord or tenant initiate a request for mediation, participation is mandatory. 

Types of Disputes Subject to Mediation. Generally, they relate to landlord or tenant compliance with the rental agreement or with the provisions of  ORS Chapter 90 (Oregon’s Residential Landlord-Tenant Laws). Specifically, they may include the following: 

• Landlord or tenant conduct within the facility; and
• The modification of a rule or regulation under ORS90.610.

Types of Disputes Excluded From Mediation.Unless all parties agree otherwise, nopartymayinitiatemediationfor:

• Facility closures consistent with ORS90.645 or 90.671;
• Facility sales consistent with ORS 90.842 to 90.850;
• Rent increases consistent with ORS 90.600;
• Rent payments or amounts owed;
• Tenant violations alleged in termination notices given under ORS 90.394 (Nonpayment of Rent), and non-curable notices under 90.396 (24-Hour Notices) or 90.630(8) (3-Strike Notices);
• Unauthorized person in possession under ORS 90.403;
• Unless initiated by the victim, dispute involving allegations of domestic violence, sexual assault or stalking or a dispute between the victim and the alleged perpetrator; and
• Disputes arising after the termination of the tenancy, including under ORS 90.425 (Personal Property Abandonment), 90.675 (Manufactured Home Abandonment) or 105.161 (Writs of Execution).

Parks Required to Have a Mediation Policy.It must include the following:  

• The process and format to initiate mediation;
• The names and contact information, including thephone number and website address, for mediation services available through the referral program provided by the Housing and Community Services Department established under ORS 446.543 (2) and any other no-cost mediation service acceptable to thelandlord;
• Information explaining the following requirements:
  • It may be initiated by the landlord or tenant contacting the Housing and Community Services Department in their required format;
  • It may not resolve any matters except by the agreement of all parties; [Note: we interpret this to mean that neither party can be compelled to reach agreement on any matter against their consent. However, we do not interpret this to mean that both parties must agree in advance as to which topics will go to mediation (assuming they are not otherwise beyond the scope of the law)].
  • All communications from all parties are held strictly confidential and may not be used in any legal proceedings. 
  • Mediation may be used toresolve:
    • Disputes between the landlord and one or more tenants,initiated by any party; and 
    • Disputes between any two or more tenants, initiated only by the landlord.
  • A party may designate any person, including a non-attorney, to represent their interests, provided that the designee must have the authority to bind that party to any resolution of thedispute;
  • Must comply with any other provisions as the Housing and Community Services Department may require byrule; and
  • Parties must participate in mediation (a) by making a good faith effort to schedule mediation within 30 days after it is initiated, (b) attending and participating in mediation and (c) cooperating with reasonable requests of the mediator.

MHCO Form No. 4 (Mediation Policy).  This form summarizes Senate Bill 586, and should be given to all new residents after January 1, 2020.  A landlord may unilaterally amend a rental agreement or facility rules and regulationstoSB 586.  PCQ Comment: MHCO has a form (No. 4) available to its members to make the unilateral amendment for existing residents. If your current policy conflicts with the new law, or you simply want to update it, we suggest sending the unilateral amendment to current residents. For new residents, Form 4 should become a part of their rental agreement, rules, and statement of policy.

Pending Claims.After mediation has been initiated and while it is on going,any statute of limitations related to the dispute is suspended (aka “tolled”). Additionally, after the mediation has been initiated, a party may not file a legal action related to the dispute, including an action for possession under ORS105.110 (“FED”).

Continuing Duties During Mediation. The tenant must continue paying their rent. However, receipt of such payment is not subject to landlord waiver under ORS 90.412(2) so long as it is refunded (if appropriate) within 10 days following the conclusion ofmediation.

Miscellaneous.  SB 586 does not require any party to:

• Reachanagreementonanyof the issues submitted to mediation;
• Participate in more than one mediation session or participate for an unreasonable lengthoftimeinasession;or
• Waive or forgo any rights or remedies or the use of any other available informal dispute resolutionprocess.
• A mediator in the mandatory mediation must notify the Housing and Community Services Department as to whether the dispute was resolved - but may not provide the department with the contents of any resolution;
• If a party refuses to participate in good faith in a requested mediation or uses mediation to harass another party, the other party:
  • Has a defense to a claim related to the subject of the dispute for which mediation was sought;and
  • Is entitled to damages of one month’s rent against that party.

PCQ Note:Although unrelated to mediation, SB 586 also provides that the Housing and Community Services Department shall award grants to persons to provide legal representation to low-income facility tenants in addressing disputes involving legal matters arising under ORS Chapter 90;

Answer. RS 90.680(6)(b) provides as follows:

The landlord may not unreasonably reject a prospective purchaser as a tenant. Reasonable cause for rejection includes, but is not limited to, failure of the prospective purchaser to meet the landlords conditions for approval as provided in ORS 90.510 (Statement of policy) (5)(i) or failure of the prospective purchasers references to respond to the landlords timely request for verification within the time allowed for acceptance or rejection under paragraph (a) of this subsection. Except as provided in paragraph (c) of this subsection, the landlord shall furnish to the seller and purchaser a written statement of the reasons for the rejection.

What this means is that the only prohibition is against unreasonable rejections. That, of course, is in the eye of the beholder. But whatever criteria you have, it must be applied consistently to all prospective applicants.

However, note that besides situations in which the prospective tenant fails to timely respond, the source of relevant screening criteria is to come from your Statement of Policy. So check that to see what criteria you have.

Similarly, Oregon law requires that you must inform your current resident in the rental agreement as to what criteria you will use, so check that, as well. In other words, you cannot make up screening criteria on the fly.

The MHCO rental and lease agreements have a number of criteria set out, and as long as you confine yourself to them you should be in good shape. You will note that they are general in nature, and do not set limits on the age or type of criminal convictions.

In checking with John VanLandingham, he reminds me that ORS 90.303 currently provides that a "landlord cannot consider arrests (unless the charge is still pending), but can consider convictions if the conviction relates to conduct relevant to being a tenant, which includes most everything. In consulting with screening companies, we were told that most don't report crimes older than 5 or 7 years."

There is a move afoot to apply limitations on criminal records in hiring. See the discussion on the Internet relating to "Ban the Box," here.

Answer: Domestic violence is a defense to eviction, but only under the proper circumstances. I have set out the law in its entirety below. As you can see, the law presumes there has been a violent act for which the landlord is evicting everyonein the space, i.e. the villain and the victim. The domestic violence law says you cannot evict the victim for the violent act. But it also says the villain and the victim are still responsible for rent. It also requires a valid third-party affirmation to the event.

In short, based on your question, it does not sound as if the domestic violence statute will provide a defense to an action for nonpayment of rent. You should tell the victim that you do not believe the domestic violence law applies in these circumstances (i.e. nonpayment of rent) and that if her attorney believes otherwise, he must call you immediately and explain why. Is she is a serial late pay for which you have to issue multiple non-payment of rent notices, you might consider a 3-strikes notice under ORS 90.630(8).

DOMESTIC VIOLENCE, SEXUAL ASSAULT OR STALKING

90.445 Termination of tenant committing criminal act of physical violence. (1) If a tenant perpetrates a criminal act of physical violence related to domestic violence, sexual assault or stalking against a household member who is a tenant, after delivery of at least 24 hours' written notice specifying the act or omission constituting the cause and specifying the date and time of the termination, the landlord may:

(a) Terminate the rental agreement of the perpetrating tenant, but may not terminate the rental agreement of the other tenants; and

(b) If the perpetrator of the criminal act of physical violence related to domestic violence, sexual assault or stalking continues to occupy the premises after the termination date and time specified in the notice, seek a court order under ORS 105.128 to remove the perpetrator from the premises and terminate the perpetrator's tenancy without seeking a return of possession from the remaining tenants.

(2) A landlord that terminates the tenancy of a perpetrator under this section may not require the remaining tenants to pay additional rent or an additional deposit or fee due to exclusion of the perpetrator.

(3) The perpetrator is jointly liable with any other tenants of the dwelling unit for rent or damages to the premises incurred prior to the later of the date the perpetrator vacates the premises or the termination date specified in the notice.

(4) The landlord's burden of proof in a removal action sought under this section is by a preponderance of the evidence. [2007 c.508 _3]

90.449 Landlord discrimination against victim; exception; tenant defenses and remedies. (1) A landlord may not terminate or fail to renew a tenancy, serve a notice to terminate a tenancy, bring or threaten to bring an action for possession, increase rent, decrease services or refuse to enter into a rental agreement:

(a) Because a tenant or applicant is, or has been, a victim of domestic violence, sexual assault or stalking.

(b) Because of a violation of the rental agreement or a provision of this chapter, if the violation consists of an incident of domestic violence, sexual assault or stalking committed against the tenant or applicant.

(c) Because of criminal activity relating to domestic violence, sexual assault or stalking in which the tenant or applicant is the victim, or of any police or emergency response related to domestic violence, sexual assault or stalking in which the tenant or applicant is the victim.

(2) A landlord may not impose different rules, conditions or standards or selectively enforce rules, conditions or standards against a tenant or applicant on the basis that the tenant or applicant is or has been a victim of domestic violence, sexual assault or stalking.

(3) Notwithstanding subsections (1) and (2) of this section, a landlord may terminate the tenancy of a victim of domestic violence, sexual assault or stalking if the landlord has previously given the tenant a written warning regarding the conduct of the perpetrator relating to domestic violence, sexual assault or stalking and:

(a) The tenant permits or consents to the perpetrator's presence on the premises and the perpetrator is an actual and imminent threat to the safety of persons on the premises other than the victim; or

(b) The perpetrator is an unauthorized occupant and the tenant permits or consents to the perpetrator living in the dwelling unit without the permission of the landlord.

(4) If a landlord violates this section:

(a) A tenant or applicant may recover up to two months' periodic rent or twice the actual damages sustained by the tenant or applicant, whichever is greater;

(b) The tenant has a defense to an action for possession by the landlord; and

(c) The applicant may obtain injunctive relief to gain possession of the dwelling unit.

(5) Notwithstanding ORS 105.137 (4), if a tenant asserts a successful defense under subsection (4) of this section to an action for possession, the tenant is not entitled to prevailing party fees, attorney fees or costs and disbursements if the landlord:

(a) Did not know, and did not have reasonable cause to know, at the time of commencing the action that a violation or incident on which the action was based was related to domestic violence, sexual assault or stalking; and

(b) Promptly dismissed tenants other than the perpetrator from the action upon becoming aware that the violation or incident on which the action was based was related to domestic violence, sexual assault or stalking. [2007 c.508 _4; 2011 c.42 _9]

90.453 Termination by tenant who is victim of domestic violence, sexual assault or stalking; verification statement. (1) As used in this section:

(a) "Immediate family member" means, with regard to a tenant who is a victim of domestic violence, sexual assault or stalking, any of the following who is not a perpetrator of the domestic violence, sexual assault or stalking against the tenant:

(A) An adult person related by blood, adoption, marriage or domestic partnership, as defined in ORS 106.310, or as defined or described in similar law in another jurisdiction;

(B) A cohabitant in an intimate relationship;

(C) An unmarried parent of a joint child; or

(D) A child, grandchild, foster child, ward or guardian of the victim or of anyone listed in subparagraph (A), (B) or (C) of this paragraph.

(b) "Qualified third party" means a person that has had individual contact with the tenant and is a law enforcement officer, attorney or licensed health professional or is a victim's advocate at a victim services provider.

(c) "Verification" means:

(A) A copy of a valid order of protection issued by a court pursuant to ORS 30.866, 107.095 (1)(c), 107.716, 107.718 or 163.738 or any other federal, state, local or tribal court order that restrains a person from contact with the tenant;

(B) A copy of a federal agency or state, local or tribal police report regarding an act of domestic violence, sexual assault or stalking against the tenant;

(C) A copy of a conviction of any person for an act of domestic violence, sexual assault or stalking against the tenant; or

(D) A statement substantially in the form set forth in subsection (3) of this section.

(d) "Victim services provider" means:

(A) A nonprofit agency or program receiving moneys administered by the Department of Human Services or the Department of Justice that offers safety planning, counseling, support or advocacy to victims of domestic violence, sexual assault or stalking; or

(B) A prosecution-based victim assistance program or unit.

(2)(a) If a tenant gives a landlord at least 14 days' written notice, and the notice so requests, the landlord shall release the tenant and any immediate family member of the tenant from the rental agreement.

(b) The notice given by the tenant must specify the release date and must list the names of any immediate family members to be released in addition to the tenant.

(c) The notice must be accompanied by verification that the tenant:

(A) Is protected by a valid order of protection; or

(B) Has been the victim of domestic violence, sexual assault or stalking within the 90 days preceding the date of the notice. For purposes of this subparagraph, any time the perpetrator was incarcerated or residing more than 100 miles from the victim's home does not count as part of the 90-day period.

(3) A verification statement must be signed by the tenant and the qualified third party and be in substantially the following form:

______________________________________________________________________________

QUALIFIED THIRD PARTY

VERIFICATION

______________________

Name of qualified third party

______________________

Name of tenant

PART 1. STATEMENT BY TENANT

I, ________(Name of tenant), do hereby state as follows:

(A) I or a minor member of my household have been a victim of domestic violence, sexual assault or stalking, as those terms are defined in ORS 90.100.

(B) The most recent incident(s) that I rely on in support of this statement occurred on the following date(s):_________.

___The time since the most recent incident took place is less than 90 days; or

___The time since the most recent incident took place is less than 90 days if periods when the perpetrator was incarcerated or was living more than 100 miles from my home are not counted. The perpetrator was incarcerated from ____________ to____________. The perpetrator lived more than 100 miles from my home from ___________ to___________.

(C) I hereby declare that the above statement is true to the best of my knowledge and belief, and that I understand it is made for use as evidence in court and is subject to penalty for perjury.

______________________

(Signature of tenant)

Date: ________

PART 2. STATEMENT BY QUALIFIED THIRD PARTY

I, ________(Name of qualified third party), do hereby verify as follows:

(A) I am a law enforcement officer, attorney or licensed health professional or a victim's advocate with a victims services provider, as defined in ORS 90.453.

(B) My name, business address and business telephone are as follows:

___________________________

___________________________

___________________________

(C) The person who signed the statement above has informed me that the person or a minor member of the person's household is a victim of domestic violence, sexual assault or stalking, based on incidents that occurred on the dates listed above.

(D) I reasonably believe the statement of the person above that the person or a minor member of the person's household is a victim of domestic violence, sexual assault or stalking, as those terms are defined in ORS 90.100. I understand that the person who made the statement may use this document as a basis for gaining a release from the rental agreement with the person's landlord.

I hereby declare that the above statement is true to the best of my knowledge and belief, and that I understand it is made for use as evidence in court and is subject to penalty for perjury.

______________________

(Signature of qualified third party

making this statement)

Date: ________

______________________________________________________________________________

(4) A tenant and any immediate family member who is released from a rental agreement pursuant to subsection (2) of this section:

(a) Is not liable for rent or damages to the dwelling unit incurred after the release date; and

(b) Is not subject to any fee solely because of termination of the rental agreement.

(5) Notwithstanding the release from a rental agreement of a tenant who is a victim of domestic violence, sexual assault or stalking and any tenant who is an immediate family member of that tenant, other tenants remain subject to the rental agreement.

(6) A landlord may not disclose any information provided by a tenant under this section to a third party unless the disclosure is:

(a) Consented to in writing by the tenant;

(b) Required for use in an eviction proceeding;

(c) Made to a qualified third party; or

(d) Required by law.

(7) The provision of a verification statement under subsection (2) of this section does not waive the confidential or privileged nature of a communication between the victim of domestic violence, sexual assault or stalking and a qualified third party. [2003 c.378 _4; 2007 c.508 _9; 2011 c.42 _9a]

90.456 Other tenants remaining in dwelling unit following tenant termination or exclusion due to domestic violence, sexual assault or stalking. Notwithstanding the release of a tenant who is a victim of domestic violence, sexual assault or stalking, and any immediate family members of that tenant, from a rental agreement under ORS 90.453 or the exclusion of a perpetrator of domestic violence, sexual assault or stalking as provided in ORS 90.459 or 105.128, if there are any remaining tenants of the dwelling unit, the tenancy shall continue for those tenants. Any fee, security deposit or prepaid rent paid by the victim, perpetrator or other tenants shall be applied, accounted for or refunded by the landlord following termination of the tenancy and delivery of possession by the remaining tenants as provided in ORS 90.300 and 90.302. [2003 c.378 _6; 2007 c.508 _10; 2007 c.508 _11; 2011 c.42 _9b]

90.459 Change of locks at request of tenant who is victim of domestic violence, sexual assault or stalking. (1) A tenant may give actual notice to the landlord that the tenant is a victim of domestic violence, sexual assault or stalking and may request that the locks to the dwelling unit be changed. A tenant is not required to provide verification of the domestic violence, sexual assault or stalking to initiate the changing of the locks.

(2) A landlord who receives a request under subsection (1) of this section shall promptly change the locks to the tenant's dwelling unit at the tenant's expense or shall give the tenant permission to change the locks. If a landlord fails to promptly act, the tenant may change the locks without the landlord's permission. If the tenant changes the locks, the tenant shall give a key to the new locks to the landlord.

(3) If the perpetrator of the domestic violence, sexual assault or stalking is a tenant in the same dwelling unit as the victim:

(a) Before the landlord or tenant changes the locks under this section, the tenant must provide the landlord with a copy of an order issued by a court pursuant to ORS 107.716 or 107.718 or any other federal, state, local or tribal court that orders the perpetrator to move out of the dwelling unit.

(b) The landlord has no duty under the rental agreement or by law to allow the perpetrator access to the dwelling unit or provide keys to the perpetrator, during the term of the court order or after expiration of the court order, or to provide the perpetrator access to the perpetrator's personal property within the dwelling unit. Notwithstanding ORS 90.425, 90.435 or 90.675, if a landlord complies completely and in good faith with this section, the landlord is not liable to a perpetrator excluded from the dwelling unit.

(c) The perpetrator is jointly liable with any other tenant of the dwelling unit for rent or damages to the dwelling unit incurred prior to the date the perpetrator was excluded from the dwelling unit.

(d) Except as provided in subsection (2) of this section, the landlord may not require the tenant to pay additional rent or an additional deposit or fee because of the exclusion of the perpetrator.

(e) The perpetrator's tenancy terminates by operation of law upon an order described in paragraph (a) of this subsection becoming a final order. [2003 c.378 _5; 2007 c.508 _11]