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Good evening everyone. This story just broke in "The Oregonian" this evening. We have been talking about this since the February 2016 Legislative Session. Clearly this is a brutal reality that we all will be facing in 2017. If you were not concerned - you certainly should be now. In all likelihood we will have a long, vicious legislative fight on our hands. MHCO will definitely be in the trenches and will need all of you to be involved.

By Dana Tims | The Oregonian/OregonLive 
Email the author | Follow on Twitter 
on September 13, 2016 at 12:45 PM, updated September 13, 2016 at 6:38 PM
House Speaker Tina Kotek, signaling fresh urgency for tackling Oregon's housing crisis, said she will push next year to end no-cause evictions, lift the state's ban on rent-control laws and ban all rent increases above a "reasonable" percentage for the foreseeable future. 

Kotek laid out those policy goals in an address Monday night to the Oregon Opportunity Network, a supportive advocacy group that lobbies for affordable housing and renter protections. 

But Kotek, according to a transcript of her remarks, said she fully expects the proposals will spark controversy. 

"Frankly, it means things are going to get uncomfortable," the North Portland Democrat told the gathering of housing advocates. "Discomfort and determination are necessary when dealing with a crisis. We all need to be up to the task." 


Kotek and House Democrats had considered pushing further, before deciding to wait to try policy ideas such as extending notice periods for no-cause lease terminations. 

At the time, Kotek told The Oregonian/OregonLive she was warning lawmakers, "you're coming back in 2017 and we're going to talk about no-cause notices and evictions. We need to level the playing field for tenants." 

She then, she said Monday, things have only gotten worse, both in Portland and across the state. Rents have continued to rise, even as builders add thousands of units to address a longstanding shortage of supply. Demand has further been stoked by affluent workers, some arriving from out of state, willing to pay a premium to rent in high-end buildings. 

"Whole apartment buildings are seeing rents go up by 20 percent, or 30 percent, or more," she said. "Evictions have skyrocketed as some owners make way for new tenants with bigger salaries, or evict entire buildings with plans to renovate and join the luxury apartment market." 

Kotek explicitly called for lifting Oregon's ban on letting local governments pass rent-control ordinances, calling the practice "rent stabilization." 

Rent control is a controversial tool that lets local or state governments impose a price ceiling. 

"We can no longer avoid this discussion," she added. "We need to prevent property owners from making excessive profit and protect tenants from economic eviction and displacement." 

She also promised to fight for a statewide ban on "rent increases above a reasonable percentage until the housing crisis subsides." 

"Frankly, it means things are going to get uncomfortable," House Speaker Tina Kotek said. Kotek's office said the specifics of what constitutes a "reasonable percentage" or how long such a measure might be in effect will continue to be refined between now and the January start of the 2017 legislative session. 

Some immediately took issue with Kotek's housing initiatives, arguing such steps would make it more costly for builders to meet the state's housing demand. 

"It's almost textbook that any form of rent control ultimately harms consumers, as well as landlords," said Eric Fruits, an economist and editor of Portland State University's Center for Real Estate quarterly reports. "It may benefit some in the short term, but in the longer term, there will be fewer units available to rent, which will only make matters worse." 

Instead, Fruits said, the free market should be allowed to work, with higher prices sending signals to developers that more units are needed. 

Affordable-housing advocates disagreed, saying a surge in evictions of lower-income people is serious enough to demand a policy solution. 

"We are seeing signification numbers of folks having to move farther and farther out from the metro area to find affordable housing," said Rev. Joseph Santos-Lyons, executive director of the Asian Pacific American Network of Oregon. "I talked with one member last night who can't even find a place in Gresham. Places long thought to be affordable for renters and first-time buyers are disappearing." 

Santos-Lyons said he'd like to see Kotek's call for a temporary cap on statewide rent increases made permanent. 

"The average family could certainly understand that something like a 3 percent increase would be reasonable," he said. "But as it is, what we're seeing is unfettered speculation." Katrina Holland, interim director of the Community Alliance of Tenants, said her office just learned that rents in one Southwest Portland apartment complex are scheduled to increase by 350 percent. 

"This is clearly something that we need to address," she said. "It's time to act." 
-- Dana Tims 
 

Question: A home was purchased by a local dealer from a resident who had not paid rent for several months. The dealer then sold the home to another person who applied for tenancy and passed the screening criteria. The landlord wants the past due rent ($900) paid before permitting applicant to move into the home. Can the landlord go after the dealer to pay the past due rent? Can the landlord keep the applicant from moving in until the $900 is paid? Should the landlord have given some notice to the existing tenant, the dealer, and/or the prospective tenant, regarding how the unpaid rent should be handled? What about other expenses the tenant who sold the home ran up, such as utilities, late fees, maintenance clean up expenses, etc.? What do you suggest as far as notices to the dealer stating the amount of money owed? The dealer is not the lien holder.

Answer: Landlords should become intimately familiar with ORS 90.680, and then make sure their rules and rental agreements conform to what is allowed. Set forth below is a summary of those portions of the statute that address your questions:

o If the prospective purchaser of a manufactured dwelling or floating home desires to leave the dwelling or home on the rented space and become a tenant, the landlord may require the following:

o That a tenant give not more than 10 days' notice in writing prior to the sale of the dwelling or home on a rented space;

o That prior to the sale, the prospective purchaser submit to the landlord a complete and accurate written application for occupancy of the dwelling or home as a tenant after the sale is finalized;

o That a prospective purchaser may not occupy the dwelling or home until after the prospective purchaser is accepted by the landlord as a tenant;

o That a tenant give notice to any lienholder, prospective purchaser or person licensed to sell dwellings or homes of the requirements of the resale requirements [Emphasis mine - PCQ];

o If the sale is not by a lienholder, that the prospective purchaser pay in full all rents, fees, deposits or charges owed by the tenant prior to the landlord's acceptance of the prospective purchaser as a tenant [Emphasis mine];

o If the landlord's rules and/or rental agreement requires prospective purchasers to submit an application for occupancy as a tenant, at the time that the landlord gives the prospective purchaser an application the landlord shall also give the prospective purchaser copies of the statement of policy, the rental agreement and the facility rules and regulations, including any conditions imposed on a subsequent sale ;

o The following conditions apply if a landlord receives an application for tenancy from a prospective purchaser:

o The landlord shall accept or reject the prospective purchaser's application within seven days following the day the landlord receives a complete and accurate written application ;

o An application is not complete until the prospective purchaser pays any required applicant screening charge and provides the landlord with all information and documentation, including any financial data and references, required by the landlord;

o The landlord may not unreasonably reject a prospective purchaser as a tenant. Reasonable cause for rejection includes, but is not limited to:

o Failure of the prospective purchaser to meet the landlord's conditions for approval;

o Failure of the prospective purchaser's references to respond to the landlord's timely request for verification within the time allowed for acceptance or rejection;

o In most cases, the landlord must furnish to the seller and purchaser a written statement of the reasons for any rejection ;

o The landlord may give the tenant selling the home a notice to repair the home [e.g. for damage or deterioration] under ORS 90.632. The landlord may also give any prospective purchaser a copy of that notice.

o The landlord may require as a condition of tenancy that a prospective purchaser who desires to leave the dwelling or home on the rented space and become a tenant must comply with the repair notice within the allowed period under ORS 90.632.

o If the tenancy has been terminated for failure to timely complete the repairs under ORS 90.632, a prospective purchaser does not have a right to leave the dwelling or home on the rented space and become a tenant.

Obviously, the statute was drafted with tenant/purchasers in mind. However, as long as the home remains on the space, the landlord has complete control over the situation. In your case, I suspect the delinquent tenant made no effort to notify the landlord of his planned sale to the dealer. However, that does not prevent him from imposing these requirements on the dealer if he wants to put a tenant in the park.

Going forward, it might be advisable for all landlords who have faced this situation before, to prepare a summary of requirements to give dealers when they purchase homes from tenants already sited in the park. They may want to expressly address this in their rules, so tenants cannot say they didn't know. The written summary to dealers should clearly state that if a departing tenant owes monies to the landlord, repayment will be required before occupancy of the home will be permitted by a new resident. [A more difficult question that is not addressed by the statute, ORS 90.680, is whether the landlord may prevent the dealer from removing the home without paying the past due sums. I suspect the answer may be Yes" a landlord may do so

Disparate impact holds that certain practices in employment, housing, etc., may be considered discriminatory under the Act, if they have a disproportionately "adverse impact" on certain members of a protected class, i.e. those falling into the following groups: Race, color, religion, sex, disability, familial status or national origin.  The simplest explanation of how disparate impact works is by the following example: 

A landlord may be found to have discriminated against a prospective tenant, not because of an intentional discriminatory act, such as rejecting him or her based upon race or religion, but unintentionally, because the landlord relied upon a perfectly legal basis, except that it had a disproportionately adverse impact on members of a protected class.  Proof of the “disproportional impact” is usually based upon some statistical correlation showing that a certain class of protected persons are impacted more than others. In other words, unintentional discrimination can be found to be a violation of the Act.

According to the Memo (footnotes omitted): 

Across the United States, African Americans and Hispanics are arrested, convicted and incarcerated at rates disproportionate to their share of the general population. Consequently, criminal records-based barriers to housing are likely to have a disproportionate impact on minority home seekers. While having a criminal record is not a protected characteristic under the Fair Housing Act, criminal history-based restrictions on housing opportunities violate the Act if, without justification, their burden falls more often on renters or other housing market participants of one race or national origin over another (i.e., discriminatory effects liability). Additionally, intentional discrimination in violation of the Act occurs if a housing provider treats individuals with comparable criminal history differently because of their race, national origin or other protected characteristic (i.e., disparate treatment liability).

The purpose of the Memo is to issue guidance, mostly by way of examples and prior case law, in how the use of criminal history during the tenant-screening process, may, and may not, trigger a disparate impact result. 

MHCO has closely reviewed the Memo and will be providing further guidance shortly. In the meantime, this article is a “heads-up” to landlords and managers regarding the use of criminal background checks in light of the Memo. It is preliminary only, and not intended as “legal advice”. MHCO members should consult their own legal counsel for advice relating to their particular situation. 

Summary of Thoughts and Suggestions.  Here are some tips based upon information from the Memo: 

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

1. 2.    Ultimately, members should plan on making adjustments in their rules and application process.  MHCO will elaborate on this further in a future article.

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

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

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

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

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

1. 1. a.    How long ago was the conviction? (Convictions over 6-7 years old, with no further convictions, in most cases should probably not be used as the basis for a denial (excluding registered sex offenders, or those convicted for violent crimes).

1. 1. b.    What has the person been doing since release?

1. 1. c.    Has the person been convicted once, or on multiple occasions?

1. 1. d.    What was the nature and severity of the crime? 

1. 1. 8.    Note that according to the Memo, a refusal to rent to an applicant who has a conviction for one or more drug crimes involving the manufacture or distribution (not mere possession) of a federally defined controlled substance is immune from a disparate impact claim. In other words, a landlord or manager may legally base the refusal to rent to a prospective tenant based upon his or her conviction for manufacture or distribution will not result in a violation of the Act, based upon disparate impact. Per the Memo: “Section 807(b)(4) of the Fair Housing Act provides that the Act does not prohibit ‘conduct against a person because such person has been convicted … of the illegal manufacture or distribution of a controlled substance as defined in section 102 of the Controlled Substances Act (21 U.S.C. 802).’”

1. 1. 9.    ORS 90.303 (Evaluation of Applicant) addresses some of the same issues as in the Memo, but not all. And where there is similarity, Oregon law does not go as far as the Memo on the issue of criminal records and disparate impact. Oregon’s statute provides:

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

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

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

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

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

     (a) A drug-related crime;

     (b) A person crime;

     (c) A sex offense;

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

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

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

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

1. 1. 10.    Readers should not assume that compliance with ORS 90.303 means that a denial of tenancy could not result in a disparate impact claim.  In other words, landlords and managers should be extra-cautious in this minefield, since where federal law is more restrictive (i.e. burdensome on landlords), it will likely pre-empt state law.  

Here are some considerations to keep in mind:

1. 1. a.    The Memo and ORS 90.303 both prohibit screening applicants for arrests, regardless of the conduct that led to the arrest;
   2. b.    ORS 90.303 says that an arrest which has not been dismissed, but is still pending (i.e. a conviction is still possible) may be considered in tenant screening. The HUD Memo does not address this issue – so we don’t know what the feds would say. Accordingly, it may be prudent to take a more balanced approach in these situations. For example, rather than having a blanket policy that a tenant will automatically be rejected if their charge is still pending, landlords and managers should evaluate the matter based upon (a) When the matter will be resolved, e.g. a week, a month, or a year? (b) What was the charge? (c) If convicted, would the applicant automatically be denied?  As noted above, the whole issue of criminal background information is an element of the application process that need not be fully vetted, if, regardless of the crime, its severity or recency, the person would fail the application process on other grounds. If so, there is no need to rely upon the community’s criminal background policy to vet an applicant. However, a word of caution here: Be prudent when selecting a basis for denial. Using a weak reason, versus a stronger one, can be viewed as pretextual if the applicant is a member of a protected class. In other words, beware of using a credit basis for denial if it is “iffy” and exclude the criminal background basis. In these cases, landlords and managers should consult legal counsel; it may be best to use both bases. 
   3. c.    ORS 90.303 says that a landlord may consider a conviction for certain conduct, generally relating to threats of violence, drugs, sex, or property damage, which would indicate risks to fellow tenants or the landlord. However, the HUD Memo is broader and more subtle (i.e. it demands an evaluation beyond a one-size-fits-all rejection policy). In short, do not rely solely on ORS 90.303, to the exclusion of the more balanced approach demanded by the Memo.
   4. d.    Unlike the HUD Memo, ORS 90.303 does not address how long ago the conviction occurred, or require an evaluation of what the applicant had been doing since the conviction. (i.e. evidence of rehabilitation). The General Landlord-Tenant Coalition could not reach agreement on whether to use a five or seven year standard in the statute, nor whether multiple convictions should be dealt with differently than single ones. Accordingly, our statute is silent on this. Footnote 34 of the Memo cites to the following authority, which mentions six to seven years: 

“(S)ee, Megan C. Kurlychek et al., Scarlet Letters and Recidivism: Does an Old Criminal Record Predict Future Offending?, 5 Criminology and Pub. Pol’y 483 (2006) (reporting that after six or seven years without reoffending, the risk of new offenses by persons with a prior criminal history begins to approximate the risk of new offenses among persons with no criminal record).”

Conclusion.  Landlords and managers could be forgiven for feeling they are caught in a dilemma. If they follow Oregon law, it may not be enough – but at least the statutes are black and white. And while it may be sufficient to follow federal law, today that requires a “disparate impact” analysis, which, at best, is a shifting and nuanced set of “guidelines”. Perhaps most unsettling, now a good faith effort to comply with the tenant application process is not enough. Unintentional discrimination, now known under the more benign title, “disparate impact”, is more of a concept than a law, since it does not depend upon one’s overt actions,  - however well intended - but upon the long term “consequences” of those actions based upon inferred and empirical statistics derived from academic writings, analysis, surveys, footnotes, and demographics. Is this something landlords and managers can or should be expected to fully appreciate and understand?  The best we can do today is to keep alert to the issue. MHCO will have more on this minefield in coming articles.

History

The Civil Rights Act of 1968 enacted The Fair Housing Act ("FHA") to prohibit housing discrimination based on race, color, religion, sex or national origin. The FHA was amended in 1988 to expand its coverage to prohibit discrimination based upon disability or family status, meaning the presence of a child under the age of 18 and pregnant women. Because the creation of families as a protected class clashed with the operation of retirement or adult communities, the 1988 amendments included exemptions for housing developments that qualified as housing for persons over the age of 55. Because there was an inherent conflict between protected family status and the exemption for older persons, Congress responded with The Housing for Older Persons Act of 1995 ("HOPA")* which fine tuned the exemptions and is now the definitive authority for owners of such housing. (You should also be aware that municipalities can have ordinances prohibiting discrimination for categories broader than the Civil Rights Act. Examples of common ordinances gaining popularity are discrimination in housing on the basis of HIV/AIDS status or sexual orientation. Such ordinances are not addressed in this article.)

Occupancy Requirement to Qualify for Exemption

HOPA maintained the requirement that at least 80% of exempt housing must have one occupant who is 55 years of age or older. It also still required that the exempt housing publish and follow policies and procedures that demonstrate an intent to be housing for persons 55 and older. Significant in terms of capital costs, HOPA eliminated the requirement that 55 and older housing had to maintain "significant facilities and services" designed for the elderly. (Communities that are occupied solely by persons who are 62 or older are also exempt from the prohibition against family discrimination under Section 100.303.)

The "Wiggle Room" Factor

At first blush, the 80% requirement appears to give a property owner some "wiggle room" to comply with the exemption. HOPA specifically allows a 55 and older community to be "exempt" from the preference for families if, after September 13, 1988, 80% of the units are occupied by at least one person age 55 years or older. Units occupied by employees of the housing facility or community who are under age 55 do not count against the 80% as long as the employee's perform substantial duties related to the management or maintenance of the community. Likewise, units occupied by persons who are disabled and require a reasonable accommodation, also do not count against the 80%.

However, the 80% requirement can also be a property owners' pitfall if it is achieved improperly. The 80% requirement does not mean that the property owner can manipulate the remaining 20% of units occupied by persons under the age of 55. The 80% occupancy requirement is coupled with an additional requirement that the facility or community adheres to policies and procedures that demonstrate the intent to be a 55 or older facility. A manager cannot merely choose to rent to "good" non-seniors or families just because the facility is over 80% senior.

One provision of HOPA which, on the surface, appears troublesome is Section 100.305(h) which provides that each housing facility may determine the age restriction for units that are not occupied by at least one person 55 years of age or older. On its face, this provision appears to allow a community to set any age requirement it wishes for the twenty percent (20%) of spaces which are not required to be occupied by a person 55 years of age or older, including requiring the occupants of the remaining twenty percent (20%) of spaces to be adults. However, this would appear to be contrary to the general intent of the FHA to prohibit discrimination on the basis of "family status." A more likely interpretation is that the housing provider need not apply any age restrictions on occupancy of the remaining twenty percent (20%) of rental units. This interpretation seems likely, not only in view of the general intent of the FHA, but in view of Section 100.306(d) which provides that a housing facility or community may allow occupancy by families with children as long as it meets the intent requirements of Sections 100.305 and 100.306 (a).

An argument could well be made that a community must allow up to twenty percent (20%) of the spaces to be occupied by persons who do not otherwise satisfy the community's minimum age requirements. The problem is that a park which "uses up" its twenty percent (20%) allotment may find itself below the 80% requirement if a space which was previously occupied by a person 55 years of age or older ceases to be so occupied. This could occur as a result of an older tenant dying or moving out of the community.

It has been our experience that HUD has, from time to time, interpreted the "twenty percent" allowance as a "fudge factor" in order to avoid hardship where, for example, an older tenant dies, leaving a widow who does not satisfy the community's minimum age requirements. This interpretation was bolstered by the requirement that the housing be intended for persons 55 years of age or older and that the properties have rules that limit residency to persons meeting the age requirements. Deliberately allowing persons under age 55 to move into the community seems contrary to this intention.

**Tip: In many states (including California) the law requires that mobilehome park owners uniformly enforce all published rules. To allow some households to avoid the requirement could run afoul of the such laws leaving the door open for a disgruntled tenant to sue on a claim that the management is not uniformly enforcing it own rules.

Published Procedures and Policies of Intent

In addition to requiring that at least 80% of the occupied units be occupied by at least one person who is 55 years of age or older, HOPA requires that the housing be "intended and operated" for persons 55 years of age or older, and that the housing facility "publish and adhere to policies and procedures that demonstrate its intent" to qualify for the 55 or older exemption. Section 100.306(a) sets forth a non-exclusive list of relevant factors in determining whether the park "demonstrates" this "intent":

(1) The manner in which the housing facility is described to prospective residents;(2) Any advertising designed to attract prospective residents;(3) Lease provisions;(4) Written rules and regulations;(5) The maintenance and consistent application of relevant procedures;(6) Actual practices; and(7) Public posting in common areas of statements describing the facility as housing for persons 55 years of age or older.

These requirements bolster the "common sense" approach to a community demonstrating its intent to be housing for older persons. Specifically, without limitation, the park's residency documents need to clearly state the age restrictions on residency, and the age restrictions need to be consistently enforced.

Unscrupulous attempts by property owners to manipulate the intent to remain senior housing have resulted in adverse judgments. In a 2003 federal case in California, Housing Rights Center et al. v. Galaxy Apartments, et al., the apartment complex and management company was sued for allegedly telling an expectant mother that it would not accept families with children because it was a "seniors only" complex. The Housing Rights Center sent "testers" to the building and learned that childless adult testers of all ages were accepted and only testers with children or who were expecting children were told that the complex was seniors only. Obviously, the apartment owner was not complying with the "intent" of the over 55 exemption and was ordered to pay the plaintiffs $51,000 and enter into a two year fair housing training program.

Some states require that housing intended and operated for occupancy by persons 55 years of age or older register with state agencies. You should consult your legal counsel for the applicable registration and renewal process in your state.

Age Verification

HOPA provides specific guidelines for "age verification". To protect your property, these procedures should be followed to the point that, at any given time in the past, you should be able to demonstrate, the percentage of units that were occupied by at least one person age 55 or older.

Section 100.307(d) provides that the following documents are considered "reliable" documentation of the age of the occupants:

(1) Driver's license;(2) Birth certificate;(3) Passport;(4) Immigration card;(5) Military identification;(6) Any other state, local, national, or international official documents containing a birth date of comparable reliability or;(7) A certification in a lease, application, affidavit, or other document signed by an adult member of the household asserting that at least one person in the unit is 55 years of age or older.

This last provision is useful in those cases where tenants who are believed to be over 55 years of age fail or refuse to provide proof of age to the park by allowing any other adult member of the household to sign a statement to the effect that the person in question is, in fact, at least 55 years of age.

**Tip: Make it a policy to obtain a written application for tenancy from every household and keep those applications for the length of the tenancy.

Section 100.307(g) further provides that: "If the occupants of a particular dwelling unit refuse to comply with the age verification procedures, the housing facility or community may, if it has sufficient evidence, consider the unit to be occupied by at least one person 55 years of age or older." This section goes on to provide that such evidence may include government records or documents, such as a census; prior forms or applications; or a statement from an individual who has personal knowledge of the age of the occupants. In the latter case, the individual's statement must set forth the basis for such knowledge. Compliance with this provision most probably would be met by a park employee statement as to their opinion of the age of a tenant, based upon the tenant's appearance and, if applicable, the apparent age of the tenant's adult children.

A typical pitfall for owners of such properties is the HOPA requirement that the age verification information must be updated at least every two years, pursuant to Section 100.307(c).

**Tip: In addition to keeping the tenant's application, the management should consider developing a form which it distributes to all spaces at least once every two years, asking residents to confirm the names and ages of all persons who are currently residing in the home. This is probably good policy in any case, since a record of what adults are actually occupying a home is useful in other situations (e.g., naming all adult occupants in an unlawful detainer complaint).

Conclusion

While there is no guaranteed insulation from lawsuits, a property owner or landlord is well advised to have their policies and procedures in writing and reviewed by competent legal counsel. All levels of a property owners' management should be instructed to adhere strictly to those written policies and procedures. With competent advice, you should be able to avoid needless and expensive litigation which only detracts from your eventual retirement.

*/The Housing for Older Persons Act of 1995 is codified in 24 CFR 100.300 et seq. The Code of Federal Regulations can be viewed on line. One such site is the National Archives and Records Administration found at www.gpoaccess.gov/cfr

Robert S. Coldren is a founding partner of the law firm of Hart, King & Coldren. For over 20 years he has represented various entities as they relate to the manufactured housing industry.

But when all is said and done, the one thing that takes most of the community manager's time is handling guideline violations. How do you, as an extremely busy person, do this with only a minimum amount of time invested? How do you handle residents as a fragile yet necessary part of your business and still get everything else done without making them feel that they are an imposition to you? How do you notify and discuss a guidelines violation with a resident without starting World War III? And, most importantly, how do you facilitate correction of outstanding violations in a timely manner.

Steps Toward Resolution

As with anything, there are no easy answers to these questions. Resolving problems must start before there is a problem. That means starting with the administrative side of your community. For a first step, look at the document you use for your community guidelines. Is it clearly written? Are the guidelines reasonable? Are they enforceable?

The second step is the orientation process. It is imperative that as a community manager, you take time to discuss certain items with residents after they have been approved. The lease, the terms of the rental agreement, and the specific requirements and provisions contained in the guidelines are high on the list of items to discuss. Is this a time-consuming process? Most definitely. And is there an alternative? None that are really acceptable. New residents will probably sign a statement that says they received the guidelines, have read them and agree to abide by them, even if they haven'tread them.

This is the start of a major problem for you as a community manager. They will most likely not go home and read the guidelines and, therefore, won't call you with any questions, because they can't possibly have any. This is the beginning of a major problem for you as a community manager. Your first realization that there is a problem should be when you see them in violation of one or more of the guidelines. When they receive a notice, a phone call, or a visit from you, one of their first comments is almost sure to be, "No one told me I couldn'tdo that," followed by an incredulous look of disbelief.

As a community manager, you are now in the position of not only enforcing your guidelines, but defending and explaining them as well. This is not an enviable position,

because rarely do such interactions end quickly or peacefully. Residents feel insulted, defensive and that they must somehow come out on top in a contest of wills. A community manager that comes on too strongly, that threatens eviction over the littlest thing, or that appears to be unreasonable will not gain cooperation from this resident, now or ever.

The Nightmare Begins

Now you've begun a nightmare of a resident relations problem, and it's sure to affect resident retention. The simple act of discussing guidelines during the orientation process can usually eliminate most of this grief. Hand-in-hand with the discussion, the resident needs to acknowledge his responsibilities and agree to abide by the terms explained in the guidelines.

The acknowledgement was for years obtained in the form of a separate statement that the new resident signed.

This statement went something like: "The undersigned agrees that he has read and understands all requirements as presented in the guidelines, and agrees to adhere to the terms contained therein during the time he is a resident of this community."

A copy of the guidelines was then given to the resident for future reference. In reality, community managers usually cut corners in the presentation and discussion of the lease and the guidelines. The resident usually makes it eminently clear that he is trying to move, is in a hurry, and doesn'thave time for a lot of paperwork. What a shame for everyone. This is a resident who is headed for misunderstandings and a community manager who is headed for problems.

When discussing guidelines with a new resident, take time to talk about each and every term and provision. Then, request that the resident, and all adult members of the family, either initial or sign each page of the guidelines.

Laid Out in Black & White

When a resident violates one of the guidelines and you have those initialed pages, you have the ability to turn a potentially contentious situation into a routine notification process. It happens because you now are able to simply send a basic form letter that saying "It appears that you may have decided to alter your lifestyle in such a way that it no longer is aligned with the guidelines for this community. At the time you joined us as a resident, we discussed the guidelines that set acceptable parameters of behavior and responsibility for resident and management alike who live in (community name). Please call the office so that we may discuss your decision to change your lifestyle with you." Then, staple a copy of the initialed page with the violated guideline(s) currently being violated.

What happens is the realization on the part of the resident that he is caught dead to rights. There is no wiggle room here. There is no need for him to try to defend his actions or to tell you that he didn'tknow he was violating a guideline. And, there is no need for him to feel like he is backed into a corner and has to become aggressive or belligerent. Your notice simply acknowledges that he has made a choice, and asks for him to take time to discuss it with you.

Remember, the best resident relations program can be compared to a round room: If you don't back a resident into a corner where he has to defend himself you can truly have a productive conversation, mutual respect, and a meeting of the minds. If you force him to lose face; if you turn this type of situation into a confrontation where the battle lines are drawn; or if you place a large amount of importance on the "winning" of every disagreement, you've lost the resident relations game before you even started.

Resolve those guideline violations that frequently happen by using peer pressure, rewards, public recognition, and, once in a while, fear. By using all

these techniques and more, you can truly enforce your guidelines and build your resident relations program to new heights.

Yours will be the community run by a manager with a reputation for being fair, honest, and consistent. The time and emotional energy you spend on guideline violations will be greatly reduced, and the time you do spend in the future will be much more pleasant.

Where The Problems Lie

Which of your community guide-lines are violated the most often? What problems do you need to eliminate in order to better meet the goals of your community owner or to have a more professionally operated community?

Among these are reducing receivables; out-of-compliance clotheslines; the building of decks that are required as part of the initial installation but are still not done 60 days later; installation of skirting that is supposed to be done by a third party and remains undone; residents who ride bicycles on the community streets without paying attention to motorists; and residents who "forget" the streets have a speed limit and are not part of the Indianapolis Motor Speedway.

History

The Civil Rights Act of 1968 enacted The Fair Housing Act ("FHA") to prohibit housing discrimination based on race, color, religion, sex, or national origin. The FHA was amended in 1988 to expand its coverage to prohibit discrimination based on disability or family status, meaning the presence of a child under the age of 18 and pregnant women. Because the creation of families as a protected class clashed with the operation of retirement or adult communities, the 1988 amendments included exemptions for housing developments that qualified as housing for persons over the age of 55. Because there was an inherent conflict between protected family status and the exemption for older persons, Congress responded with The Housing For Older Persons Act of 1995 ("HOPA") which fine tuned the exemptions and is now the definitive authority for owners of such housing. (You should also be aware that municipalities can have ordinances prohibiting discrimination for categories broader than the Civil Rights Act. Examples of common ordinances gaining popularity are discrimination in housing on the basis of HIV/AIDS status, sexual orientation. Such ordinances are not addressed in this article.)

Occupancy Requirement to Qualify for Exemption

HOPA maintained the requirement that at least 80% of exempt housing must have one occupant who is 55 years of age or older. It also still required that the exempt hosing publish and follow policies and procedures that demonstrate an intent to be housing for persons 55 and older. Significant in terms of capital costs, HOPA eliminated the requirement that 55 and older hosing had to maintain "significant facilities and services" designed for the elderly. (Communities that are occupied solely by persons who are 62 and older are also exempt from the prohibition against family discrimination under Section 100.303.)

"Wiggle Room" Factor

At first blush, the 80% requirement appears to give a property owner some "wiggle room" to comply with the exemption. HOPA specifically allows a 55 and older community to be "exempt" from the preference for families if, after September 13, 1988, 80% of the units are occupied by at least one person age 55 years or older. Units occupied by employees of the housing facility or community who are under the age 55 do not count against the 80% as long as the employees perform substantial duties related to the management or maintenance of the community. Likewise, units occupied by persons who are disabled and require a reasonable accommodation, also do not count against the 80%.

However, the 80% requirement can also be a property owners' pitfall if it is achieved improperly. The 80% requirement does not mean that the property owner can manipulate the remaining 20% of units occupied by persons under the age of 55. The 80% occupancy requirement is coupled with an additional requirement that the facility or community adheres to policies and procedures that demonstrate the intent to be a 55 or older facility. A manager cannot merely choose to rent to "good" non-seniors or families just because the facility is over 80% senior.

One provision of HOPA which, on the surface, appears troublesome is Section 100.305(h) which provides that each housing facility may determine the age restriction for units that are not occupied by at least one person 55 years of age or older. On its face, this provision appears to allow a community to set any age requirement it wishes for the twenty percent (20%) of spaces which are not required to be occupied by a person 55 years of age or older, including requiring the occupants of the remaining twenty percent (20%) of spaces to be adults. However, this would appear to be contrary to the general intent of the FHA to prohibit discrimination on the basis of "family status". A more likely interpretation is that the housing provider need not apply any age restriction on occupancy of the remaining twenty percent (20%) of rental units. This interpretation seems likely, not only in view of the general intent of the FHA, but in view of Section 100.306(d) which provides that a housing facility or community may allow occupancy by families with children as long as it meets the intent requirements of Sections 100.305 and 100.306(a).

An argument could well be made that a community must allow up to twenty percent (20%) of the spaces to be occupied by persons who do not otherwise satisfy the community's minimum age requirements. The problem is that a park which "uses up" its twenty percent (20%) allotment may find itself below the 80% requirement if a space which was previously occupied by a person 55 years of age or older ceases to be so occupied. This could occur as a result of an older tenant dying or moving out of the community.

It has been our experience that HUD has, from time to time, interpreted the "twenty percent" allowance as a "fudge factor" in order to avoid hardship where, for example, an older tenant dies, leaving a widow who does not satisfy the community's minimum age requirements. This interpretation was bolstered by the requirement that the housing be intended for persons 55 years of age or older and that the properties have rules that limit residency to persons meeting the age requirements. Deliberately allowing persons under the age of 55 to move into the community seems contrary to this intention.

**Tip: In many states the law requires that mobile home parks owners uniformly enforce all published rules. To allow some households to avoid the requirement could run afoul of such laws leaving the door open for a disgruntled tenant to sue on a claim that the management is not uniformly enforcing its own rules.

Published Procedures & Policies of Intent

In addition to requiring that at least 80% of the occupied units be occupied by at least one person who is 55 years of age or older, HOPA requires that the housing be "intended and operated" for person 55 years of age or older, and that the housing facility "publish and adhere to policies and procedures that demonstrate its intent" to qualify for the 55 or older exemption. Section 100.306(a) sets forth a non-exclusive list or relevant factors in determining whether the park "demonstrates" this "intent":

(1) The manner in which the housing facility is described to prospective residents;
(2) And advertising designed to attract prospective residents;
(3) Lease provisions;
(4) Written rules and regulations;
(5) The maintenance and consistent application or relevant procedures;
(6) Actual practices; and
(7) Public posting in common areas of statements describing the facility as housing for persons 55 years of age or older;

These requirements bolster the "common sense" approach to a community demonstrating its intent to be housing for older persons. Specifically, without limitation, the parks' residency documents need to clearly state the age restrictions on residency, and the age restrictions need to be consistently enforced.

Unscrupulous attempts by property owners to manipulate the intent to remain senior housing have resulted in adverse judgments. In a 2003 federal case in California, Housing Rights Center et al. v. Galaxy Apartments, et al., the apartment complex and management company was sued for allegedly telling an expectant mother that it would not accept families with children because it was a "seniors only" complex. The Housing Rights Center sent "testers" to the building and learned that childless adult testers of all ages were accepted and only testers with children or who were expecting children were told that the complex was seniors only. Obviously, the apartment owner was not complying with the "intent" of the over 55 exemption and was ordered to pay the plaintiffs $51,000 and enter into a two year fair housing training program.

Some states require that housing intended and operated for occupancy by persons 55 years of age or older register with state agencies. You should consult your legal counsel for the applicable registration and renewal process in your state.

Age Verification

HOPA provides specific guidelines for "age verification". To protect your property, these procedures should be followed to the point that, at any given time in the past, you should be able to demonstrate, the percentage of units that were occupied by at least one person age 55 or older.

Section 100.307(d) provides that the following documents are considered "reliable" documentation of the age of the occupants:

(1) Driver's license;
(2) Birth Certificate;
(3) Passport;
(4) Immigration card;
(5) Military identification;
(6) Any other state, local, national, or international official documents containing a birth date of comparable reliability, or
(7) A certification in a lease, application, affidavit, or other document signed by an adult member of the household asserting that at least one person in the unit is 55 years of age or older.

This last provision is useful in those cases where tenants who are believed to be over 55 years of age fail or refuse to provide proof of age to the park by allowing any other adult member of the household to sign a statement to the effect that the person in question is, in fact, at least 55 years of age.

**Tip: Make it a policy to obtain a written application for tenancy from every household and keep those applications for the length of the tenancy.

Section 100.307(g) further provides that: "If the occupants of a particular dwelling unit fail to comply with the age verification procedures, the housing facility or community may, if it has sufficient evidence, consider the unit to be occupied by at least one person 55 years of age or older." This section goes on to provide that such evidence may include government records or documents, such as a census; prior forms or applications; or a statement from an individual who has personal knowledge of the age of the occupants. In the latter case, the individual's statement must set forth the basis for such knowledge. Compliance with this provision most probably would be met by a park employee statement as to their opinion of the age of a tenant, based upon the tenant's appearance and, if applicable, the apparent age of the tenant's adult children.

A typical pitfall for owners of such properties is the HOPA requirement that the age verification information must be updated at least every two years, pursuant to Section 100.307(c).

**Tip: In addition to keeping the tenant's application, the management should consider developing a form which it distributes to all spaces at least once every two years, asking residents to confirm the names and ages of all persons who are currently residing in the home. This is probably good policy in any case, since a record of what adults are actually occupying a home is useful in other situations (e.g., naming all adults occupants in an unlawful detainer complaint.)

MHCO has a number of forms specifically designed for use in a "55 and Older Community". Form are available for MHCO members at MHCO.ORG

Reprinted from MHCO "Community Update" March/April 2005

The Basic Rule for Liability Avoidance in a Mobilehome Park 

It is the parents’ responsibility, not management’s, to decide ability to swim and access privileges for minors. Access, hours, and supervision restrictions are illegal under the Federal Fair Housing Amend- ments Act of 1988 (FHAA).1 While narrowly drawn rules may differentially impact children (persons under 18 years of age), these are not advised. The “default setting” is best: the law requires that the parents be vested with exclusive discretion to decide, control and live with their choices for kid’s access and supervision issues. Likewise, scour the rules and regulations (and now, internal management policies, manuals, agreements and memoranda) to eliminate any rule which mentions “children.” Use of the term “children” is a trigger word, no different than use of any other label for a person in a protected class. The Department of Housing and Urban Development (HUD) treats children as “small adults” for purposes of scrutinizing rules.

The Federal Fair Housing Amendments Act of 1988 (FHAA) created a new protected class of “familial status”. In California, the federal courts have addressed this requirements by ruling that “all age” communities may not discriminate against children, no more than management can discriminate against any other protected class.

Federal Requirements and Over-Regulation 

Let’s face it; some parents are not responsible. According to the Centers for Disease Control and Prevention, of all children one to four years old who died from an unin- tentional injury, almost 30% died from drowning. Fatal drowning remains the second-leading cause of unintentional injury-related death for children ages one to 14 years. The same report reveals that “the fatal drowning rate of African American children ages 5 to 14 is 3.1 times that of white children in the same age range.”

1. E.g., United States v. Plaza Mobile Estates, 273 F.Supp.2d 1084 (C.D. Cal. 2003); Bischoff v. Brittain, No. 2:14-cv-01970-KJM-CKD, United States District Court, E.D. California (May, 2016).

Mobilehome park swimming pools are deemed public, and re- quire fencing, postings and related equipment. In years past, it was believed that parkowners could require adult supervision in the swimming pool area, but it is for the parents to decide and control.

State Requirements and Conflict with the FHAA and the FEHA

California, meanwhile, promulgated modifications to Title 24, but apparently did not clear their proposals with any lawyer or the children’s rights lobby. The state mandated sign includes language mandated by Title 24 of the California Code of Regulations, as follows:

“WARNING: NO LIFEGUARD ON DUTY Children under the age of 14 shall not use pool without a parent or adult guardian in attendance.”

This language is a prima facie violation of the FHAA protections against discrimination on the basis of familial rights.2 Posting this sign places every operator of a Title 22 swimming pool (that’s us parkowners) in violation of the FHAA. If posted, any aggrieved family member may sue just because it is posted (enforced or not). Since posting this sign exposes a parkowner to liability, what should the parkowner do? First, offer to post the sign which would be consistent with the FHAA:

“WARNING: NO LIFEGUARD ON DUTY Children under the age of 14 should not use pool without a parent or adult guardian in attendance; management recommends no one swim alone.”

Despite entreaties made for clarification to resolve this conflict, to both the Department of Housing and Community Development (HUD) and the Department of Fair Employment and Housing (DFEH), there has been no response. This problem does not lie in an older persons (55+) park, by the way. This is because the “older persons” park is exempt from the familial status requirements. Since a parkowner may entirely exclude children due to the effect of the 55+ regulation, allowing kids at all is a benefit that is not required (total exclusions, pool hours, supervision are all allowable restrictions) all permissible in the “older persons” community at this time.

2 . In striking down the legal requirement for signage as a discrimination defense, the central district judge held that " . . . there is nothing magical about the age of 18 or 14 years old if defendants' concerns are for the protection of the health and safety of the children or other residents in using recreational facilities or the swimming pool or riding bicycles. Such concerns could be addressed with the use of rules. Moreover, rather than being connected to such ages, bicycle and pool safety would be better served with a proficiency requirement." U.S. v. Plaza Mobile Estates. 

In many counties, the illicit requirement is not applicable until capital renovation of the pool area. But if not, what do you do if the county representative refuses to consent to the suggested modification? Do you refuse to comply with state law in order to comply with the FHAA, or do you comply with the state mandate and violate the FHAA? As of this time, you must seek out counsel, pay them, obtain advice, and follow it.

Management Communications Can Violate the FHAA

In a housing case decided in Northern California in May, 2016, the landlord was called out for discrimination against children in an all age facility. In Bischoff v. Brittain,3 the on site management received training, including a “Resident Relations Training,” at seminars pro- vided by independent experts. A “Brief Recap of Notes” document summarizes several meetings and was distributed to the managers. The document stated that as to handling unsupervised children:

1. If you have a young child not being supervised, walk the child home and speak with whoever is in charge.

2. Have your supervisor write a letter after you speak with the person in the apartment, which will alert whoever opens the mail, that you are worried over the child’s safety-you are now showing safety concerns and are not attacking their parenting skills or being discriminatory.

1. If nothing changes and the child is once again outside un- supervised, notify your super- visor who will now contact so- cial services and/or the police. 

2. If nothing still changes, we will then consider eviction and note the reasoning on their notice. 


The landlord’s property director said the document is “simply a statement of suggested guidelines for the managers’ reference and discretionary application to unsupervised young children.” However, the court found that the reasoning violates “familial status” rights. The director relied on a mistaken understanding that “young children require regular adult super- vision.” She felt that management should “encourage [...] parents and guardians to exercise such supervision for the safety of their young children and for the benefit of other residents.” She believed that “such supervision is necessary so that young children who are tenant residents “will not be at risk of injuring themselves” or other residents, or “engaging in disruptive or destructive activities.”

“In an effort to promote such supervision and discourage parent-guardian neglect, we developed internal suggested guidelines for managers to use in their discretion as circumstances might war- rant.”

3. U.S.Dist.E.D.Ca. April 29, 2016, Decided; May 2, 2016, No. 2:14-cv-01970-KJM-CKD, 2016 U.S. Dist. LEXIS 58280.

The guidelines do not pass muster, said the court. While intended to protect the safety and well-being of young children in need of supervision, to encourage parents or guardians to provide that needed supervision, and to limit disturbances to other residents, they also allow differential treatment. It is no help that the guidelines serve the concomitant business purpose of protecting against liability that might arise from injuries to such young children.

The court found that the landlord’s policies “[...] toward unsupervised young children inherently treats children differently than adults by limiting when they may use the common areas of the complex to times when they are supervised by an adult.” The guidelines also treat parents of young children differently by subjecting them to certain consequences if their children are found unsupervised. Adult-only households may use the complex without limitation and warnings or facing eviction for violating the adult supervision guidelines. Be- cause children are subjected to explicitly differential treatment there was a validly claimed discrimination based on the face of the guide- lines.

The landlord claimed the guide- lines are not discriminatory: they are not a formalized, mandatory “policy” or rental provision; they only limit young children to the ex- tent the children are unsupervised; they apply only to young children; they have nondiscriminatory justifications; and they originated from a “neutral” source (educational sources). The court replied that the landlord did not understand the law: “[...]to establish a prima facie case of facial discrimination, a plaintiff must show only that the defendant subjects a protected group to explicitly differential treatment”4. But the landlord did not dispute that it treated unsupervised young children and their parents differently than adults sans children.

The guidelines were violations even if just “[l]imiting the use of privileges and facilities [which] is a violation of [§ 3604(b)].” The court also found it irrelevant that the guidelines distilled “neutral” information. The courts have held that “all-age” park rules which: (i) treat kids differently; (ii) are not based on a “compelling business necessity” and (iii) did not represent the “least restrictive intrusions” on familial status rights in promoting a health and safety interest, violate the law.

Any age restrictive rules which treat children, (and thus, families with children), differently and less favorably than adults-only house- holds violate the law. Period. In other words, no matter how ad- ministered, the rules were invalid as drafted. Even if never enforced, such rules may lead to a resident’s belief about allowable restrictions in use of the facilities. And now, the right to sue extends to internal policies handed down to on site personnel.

4. Citing Community House, Inc. v. City of Boise (9th Cir. 2007) 490 F.3d 1041 at 1050.

Safeguards Against Harm? 

Well-meant intentions are no defense, said the court. The court noted that the landlord submitted no evidence that managers were told to apply the policy only if a young child’s safety was threatened, or that managers in practice applied the policy in such a way. Land- lord also said, diluting the safety defense, that one of the “primary goals” of the guidelines is to limit disturbances to other residents by children, which “likely encompasses situations beyond those in which a child’s safety is legitimately threatened.” Peace and quiet is not a licit basis for the special treatment of children. Broad exclusionary policies without very particular narrowly tailored terms will be struck down. No cases specify what those narrow, least intrusive regulations might look like. And, it is submitted that seeking to develop children-specific rules is so fraught with difficulty and exposure as not to be worth the time and effort. Again, let the parents and guardians decide.

Eliminate the Exposure You May Have: 

Scour on-site management directives, policy handbooks, instructions, procedures manuals, emails. In other words, audit your intermediate level of management documentation; the entire body of memorialized supervision instructions, policies and requirements that apply to on site management. Do your employment agreements contain your fair housing policy? Do your agreements prohibit discriminatory statements, actions, conduct, communications, jokes, or notices? None of these documents is privileged from the prying eye of the plaintiff class counsel. It may be time to update these documents.

Remember: requiring adult supervision is NOT allowed in all age parks. 

An adult supervision requirement is outlawed by several decisions citing United States v. Plaza Mo- bile Estates: it is the parents, not management, who act as the “gate- keepers” of the facilities including swimming pool access and usage of facilities in “all age” communities. Requiring any form of super- vision constitutes a violation of the FHAA.

The FHAA Examples of Improper Rules to Update 

Rules and regulations in “all age” communities which discriminate include the following. If your rules contain any of the following restrictions, or any rules similar to them, it is strongly advised that a legal advisor conversant with the FHAA (and implementing regulations and judicial and administrative interpretations) be promptly consulted.

• “Residents and visitors under the age of eighteen (18) years old are not permitted to use the saunas [or] jet pool at any time;” 

• “Residents and visitors under the age of fourteen (14) years old are not permitted to use the saunas or jet pool (spa) at any time;” 

• “Use of the spa is prohibited to children under eighteen (18) years old;” 
“Use of the pool by children fourteen (14) years old and un- der requires accompaniment by a resident;” 

• “Parent of resident child or resident host must accompany 
children at all times in the pool or pool area;”
• “No one under the age of four-
teen (14) years old is allowed • to use the Jacuzzi;”
• “Guests and residents under the age of eighteen (18) years
old are permitted to use the swimming pool and sun deck from the hours of 10:00 a.m. to 2:00 p.m. only and must be accompanied by an adult park resident;”
• “Parent or responsible adult must accompany all children under fourteen (14) years old at all times [in the swimming pool and/or pool area];”
• “Minors under 16 years old are not permitted in the therapeutic pool;”
• “At 2:00 p.m. children are to be out of the pool area;”
• “All children must be accompanied by an adult to use the pool;”
• Children under the age of fourteen (14) years old shall not be allowed to ride a bicycle on the park streets without the accompaniment of an adult registered to the mobilehome in which they reside;
• Children under the age of eight (8) years old must be confined to a play area in the rear fenced yard of the family residence;
• “Children under 18 years old must be accompanied by a parent when they are in the swimming pool;”
• Children shall not be allowed to play on park streets, or in any other common areas;
• Residents under the age of eighteen (18) years old shall not be permitted to use the recreation building (clubhouse) or any other recreational facilities without the accompaniment of an adult registered to the mobilehome in which they reside;
• Residents under the age of eighteen (18) years old must be accompanied by the registered resident adult from the same household in order to use any of the recreational facilities or recreational building (club- house);
• Residents and visitors under the age of eighteen (18) years old may use the swimming pool and sun deck during the hours of 10:00 a.m. to 12:00 p.m. (noon) every day. Residents and visitors under the age of eighteen (18) years old are not permitted around the pool or sun deck after 12:00 noon;
• Residents and visitors under the age of eighteen (18) years old are not permitted to use the saunas or the therapeutic jet pool at any time; 

• Children under the age of four- teen (14) years old must be ac- companied by a registered resident adult to be allowed to ride a bicycle in the park streets; 

• The adult resident host must accompany all guests of their mobilehome who use the recreation building (clubhouse) or any of the recreational facilities of the park; 

• Children under the age of fourteen (14) years old must be ac- companied by the registered resident adult from the same household in order to use any of the recreational facilities or recreational building (club- house); 

• When using the clubhouse, persons under ten (10) years old must be accompanied by an adult resident; use of the billiards room was restricted to residents over eighteen (18) years old; 

• Use of the spa was prohibited to children under eighteen (18) years old; 

• Use of the pool by children fourteen (14) years old and under required accompaniment by a resident; 

• Bicycle riding by anyone is prohibited unless accompanied by adult resident parent or adult host; 

• Parent of resident child or resident host must accompany children at all times in the pool or pool area;
• Guests and residents under the age of eighteen (18) years old are permitted to use the swimming pool and sun deck from the hours of 9.00 a.m. to 12 noon only and must be accompanied by the parent or resident child or resident host;
• No one under the age of eighteen (18) years old is permitted in the billiard room at any time;
• No one under the age of four- teen (14) years old is allowed to use the Jacuzzi;
• At 2:00 p.m. children are to be out of the pool area;
• Children are not to walk around the park without adult supervision;
• Minors under 16 years old are not permitted in the therapeutic pool;
• For safety, children are not to ride bicycles, roller skates, skateboards, play in the street, play in RV storage, car wash, or wander around the park;
• Children under 8 years old shall be confined to a play area in the rear fenced yard of the family residence;

Age restrictive rules are “facially” discriminatory when they treat children, and thus, families with children, differently and less favor- ably than adults-only households. In other words, no matter how ad- ministered, the rules were invalid as drafted. Even if never enforced, such rules may lead to a resident’s belief about allowable restrictions in use of the facilities.

The FFHA 

In 1988, Congress amended the Federal Fair Housing Act (“FFHA”) to prohibit not just discrimination on the basis of race, color, sex, religion, disability or national origin, but also included “familial status” discrimination. “Familial status” is defined as “one or more individuals (who have not attained the age of 18 years) being domiciled with ... a parent or another person having legal custody of such individual or individuals.” Among other provisions, it is unlawful:

“To discriminate against any persons in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of ... familial status ...”

Thus, in an all-age community, restrictions on access or use of common facilities and amenities based on age of a child (“familial status”) is a violation of the FHAA, absent “compelling business necessity.” 5 Any such rule must be proved to be the “least restrictive means” to achieving a health and safety justification. What does this legalese mean to the parkowner in practical terms? A full blown trial, risks of heavy penalties, damages and attorney’s fees and costs. This is because there is no bright line test for any age-restrictive regulation: the law is bereft of any standards

or guidance to make a reasonable, predictable risk-assessment or likelihood of success. Each case de- pends on the facts and surrounding circumstances. In other words, each case is a “test-case.” In sum, the penalties are so severe that prudent counsel would admonish all to eliminate age-restrictive rules and regulations.

“Children” are as protected as any other protected class. Thus, a simple way to test a rule for FHAA compliance is this: insert any other protected class in the place of “children” when testing a rule and regulation. For example, a common past rule (and no longer a valid one) is “all children under 14 years of age must be accompanied by an adult resident when in the pool area.” How does this sound: “All Methodists must be accompanied by an adult resident. . .” Obviously, such a rule would violate the FHAA.

It is also a violation of the FHAA to express to agents, brokers, employees, prospective sellers, or renters a preference for certain types of ten- ants. Another issue is the use of selective advertisements, or denying information about housing opportunities to particular segments of the housing market because of their race, color, religion, sex, handicap, familial status, or national origin. It is a violation to place ads that specify a preference for: “mature ten- ants,” stating an aversion to “families with children, teenagers in the building; advertisements stating no more than “one child,” or stating that the parkowner does not “rent to children.” “Adult Community” at the entrance to a non-exempt com- munity also violates the FHAA. Use of the word “adult” without in- dicating it is housing for older per- sons, constitutes a violation of the

FHAA. There are no such things as “adult” mobilehome parks, and use of the phrase is deemed to chill family applicants from applying for tenancy in them.

The court held that these rules were not based on “compelling business necessity” and did not represent the “least restrictive” intrusions on “familial status” rights in promoting a health and safety interest. Having held that these rules were unlawful, the issues remaining for trial in the Plaza Mobile Estates case included damages, punitive damages, civil penalties, injunctive relief and attorney’s fees and costs for the private plaintiffs. While the action was brought as a class claim (in which all of possibly thousands of affected tenants could have been included in damages awards), class certification efforts were defeated, allowing only the named parties to seek damages.

The court’s comments regarding the invalidation of these rules is telling and troubling. The court stated that the age restrictive rules were “facially” discriminatory. In other words, no matter how ad- ministered, the rules were invalid as drafted. Even if never enforced such rules might dissuade a prospective applicant from applying for tenancy.

What Can We Do to Avoid This Mine Field? 

Even in the absence of specific rules and the ability to craft them, educational materials may help parents understand common risks associated with the very youth. When educational information is provided as an adjunct to an activity rather than a rule restricting an activity, the chance of a claim of discriminatory preference is less likely to be made. For example, when a parkowner offers such educational material from organizations who seek better protection of children (e.g., police departments, charitable organizations, etc.), the parkowner is providing a service - disseminating information and facts - not discriminating against children. 6

Conclusion 

All the parkowner wants is to know what the law is! What we do know is that certain rules are not permissible. Does it make any practical sense to promulgate new regula- tions affecting treatment of children? No.

The best policy for the all-age park is to have no references to children, child, adult, or other words which suggest differential treatment be-tween adults and children. The de- cisions affecting the young are for the parents to decide on.

Even with neutral rules and regulations, the enforcement of the rules needs to be considered. Does your manager have different attitudes, tone, manner or demeanor in general in dealing with kids and their parents? There is no room for derogatory comments, insults, or force beyond the same level applied to parents and other childless adults. Our mantra: Professional- ism. First and always! ◆

5. Some cases phrase the test differently (least restrictive, narrowly tailored, not speculative, etc.), but the reader is best advised to apply the standards applicable to the most stringent precedents in effect at this time, until variations on the articulation of the proper test for rules is made judicially and clear through further appellate court development. This is what plaintiff lawyers do. They will make the claim that the rules do not pass muster under the most difficult of possible tests. If you wish to preclude court tests of your rules, they will be drafted based on clearing the highest possible legal hurdles.

6. For example, educational material exist which explain that young children have peripheral vision which is two-thirds that of an adult; they have difficulty determining the source of sounds; traffic noises and sirens may be confusing; they may not understand that an automobile may seriously hurt or kill them; most children cannot understand a complex chain of events; children believe that all grownups will look out for them; they think that if they can see an adult driving a car toward them, the driver must be able to see them; children often mix fantasy with reality - they may give themselves superhuman powers and do not understand that a moving vehicle can hurt them; they have difficulty judging the speed and distance of oncoming vehicles.

Terry R. Dowdall, Esq. has specialized in manufactured home communities’ law since 1978. Mr. Dowdall can be reached at Dowdall Law Offices, APC Orange County office; 284 North Glassell Street, 1st Floor, Orange, CA 92866; 714.532.2222 phone; 714.532.3238 fax. email: trd@dowdalllaw. net; www.dowdalllaw. com.

This article is reprinted from WMA "Reporter", July 2016.  MHCO would like to express our deep appreciation to WMA for their permission to reprint this informative article.

The Justice Department announced that the owners and property managers of a 15-unit apartment community have agreed to pay $40,000 to settle allegations that they failed to stop disability-related harassment of a resident’s daughter by neighbors and then refused to renew their lease because of her disability and that of her daughter.

The Backstory: The case involved a mother and daughter who moved into the community in 2013. Both allegedly had disabilities: The mother had cerebral palsy and a vision impairment, and her 21-year-old daughter was born with Down Syndrome. A family friend helped the family by arranging their housing, taking care of their finances, communicating with others on their behalf, and running errands for them.

While moving in, the mother said they were subjected to offensive comments and gestures by at least three other residents. Among other things, the neighbors allegedly called the daughter “mentally retarded,” and said, “You don’t belong here…you belong in an institution.” Allegedly, the neighbors said much the same thing in complaints to the owner.  

A few days later, the friend said she emailed the owner, explaining that the daughter had a few rough evenings, crying loudly, but that the mother had calmed her down; she also defended the girl against the neighbors’ accusations by saying that she was a great kid and an honor student. Soon after, the friend said that the owner called her; allegedly, he said his policy was not to get involved in neighbor disputes and told them to develop a “plan” to deal with noise complaints about the daughter.

In the months that followed, the friend said she repeatedly complained to the owner and the building manager about continued harassment by the neighbors, one of whom allegedly followed them around making offensive comments and and telling them that they couldn’t use common areas. Allegedly, the mother called police, who warned the neighbor to stop the harassment, but it continued throughout their tenancy, making the daughter afraid to leave the unit.

Eventually, the residents said that their lease wasn’t renewed, so they moved out at the end of the term.

The mother filed a HUD complaint, which triggered the Justice Department to file suit against the owner and manager for fair housing violations. The complaint accused them of disability discrimination by refusing to renew the lease because of the disabilities of the mother and daughter; demanding that they develop a “plan” to deal with the daughter’s disability-related behavior; and pressuring them to move. The complaint also accused them of failure to take prompt action to correct and end the neighbors’ disability-related harassment of the residents.

Though the owner and manager denied the allegations, the parties reached a settlement to resolve the matter. In addition to paying the $40,000 settlement, the community agreed to maintain nondiscrimination housing policies, advertise that they are equal opportunity housing providers, and provide fair housing training.

“No family should have to endure degrading insults and comments in the place they call home,” Gustavo Velasquez, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity, said in a statement. “Today’s settlement reflects HUD and the Justice Department’s ongoing commitment to taking appropriate action against individuals who violate the housing rights of persons with disabilities.”

Lessons Learned:

1.   Rethink “Don’t Get Involved” Policy: It would be exhausting to get involved in every dispute between neighbors, but you should pay close attention to any complaints involving offensive comments or harassment by or against anyone based on race, color, or any other characteristic protected under federal, state, and local law. Depending on the nature and severity of the complaint, you could face liability for harassment under fair housing law if you knew about the offensive conduct but failed to do anything to stop it.

2.   Make a Plan to Address Residents’ Harassment Complaints: Promptly address any complaints of discrimination or harassment based on a protected characteristic—regardless of whether it’s against an employee, an outside contractor, another resident, or other third party. Conduct an investigation and, if warranted, take adequate steps to stop the offending conduct. Get legal advice if necessary, and document what you’ve done to resolve the matter.

3.   Stay Tuned for Upcoming Regulations: HUD is currently in the process of finalizing proposed regulations on liability for harassment under fair housing law. Under the proposed regulations, a person may be directly liable for failure to fulfill a duty to take prompt action and end a discriminatory housing practice by a third party, where the person knew or should have known of the discriminatory conduct.

Meanwhile, veterans with disabilities are covered under current federal law. Among other things, fair housing law requires communities to respond properly to reasonable requests for accommodations or modifications that are necessary to meet the disability-related needs of veterans and returning servicemembers.

In this month’s lesson, we’ll explain how fair housing and other civil rights laws protect military servicemembers and returning veterans from discrimination and offer six rules to help you comply with your legal obligations. 

WHAT DOES THE LAW SAY?

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

Veterans with disabilities are covered under the FHA’s ban on disability discrimination. Under the FHA, it’s unlawful to exclude or otherwise discriminate against prospects, applicants, and residents because they, or someone associated with them, has a disability.

The FHA defines disability as a physical or mental impairment that substantially limits one or more major life activity. According to HUD regulations, “physical or mental impairment” includes any physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more specified body systems. So the definition covers both physical injuries—such as loss of a limb, traumatic brain injury (TBI), burns, and hearing loss—as well as mental or psychological disorders—such as post-traumatic stress disorder (PTSD) and depression.

The disability protections may apply even if the veteran doesn’t now have—or hasn’t ever had—a physical or mental impairment that substantially limits a life activity. The FHA’s definition of disability protects individuals who are “regarded as” having such an impairment. So a community could trigger a fair housing complaint for denying housing to a veteran based on preconceived notions about emotional problems faced by some veterans transitioning from military service to civilian life.

The FHA goes further to protect individuals with disabilities from discrimination by imposing affirmative duties to provide reasonable accommodations and modifications as necessary to allow veterans with disabilities to fully enjoy their dwellings. The law also includes accessibility requirements in the design and construction of covered multifamily communities.

Reasonable accommodations. The law requires communities to make reasonable accommodations to rules, policies, practices, or services to enable an individual with a disability to fully enjoy use of the property. HUD defines “reasonable accommodation” as a change, exception, or adjustment to a rule, policy, practice, or service that may be necessary for a person with a disability to have equal opportunity to use and enjoy a dwelling. Common examples include a request to keep an assistance animal in a community with a no-pet policy or a request for a reserved parking space in a community that doesn’t have assigned parking.

Reasonable modifications. The law requires owners to permit applicants or residents with a disability, at their expense, to make reasonable modifications to the housing if necessary to afford them full enjoyment of the premises. Under the FHA, a “reasonable modification” is a structural change made to existing premises, occupied or to be occupied by a person with a disability, to afford that person full enjoyment of the premises. Communities must consider requests for reasonable modification not only to the interior of a unit, but also to lobbies, main entrances, and other public and common use areas of buildings. Examples include widening doorways to make rooms more accessible for people in wheelchairs, installing grab bars in bathrooms, lowering kitchen cabinets to a height suitable for people in wheelchairs, adding a ramp to make a primary entrance accessible, or altering a walkway to provide access to a public or common use area.

6 RULES TO COMPLY WITH LAWS PROTECTING

VETERANS AND MILITARY SERVICEMEMBERS

Rule #1: Comply with Applicable State and Local Law

Check whether your community is subject to state and local laws that prohibit housing discrimination against military servicemembers or veterans.

Currently, eight states have adopted some form of fair housing protections based on military status, though the laws vary in the language used and whom they cover. In New York, the law prohibits discrimination based on military status, while in Massachusetts, the law prohibits housing discrimination against an individual because “such person is a veteran or member of the armed forces.” In general, these laws prohibit discrimination against active duty members and veterans of the armed forces, reserves, or state National Guard.

In some states, fair housing protections for veterans are tied to the nature of their discharge. In Illinois, the list of protected characteristics under the state’s human rights law includes military status as well as “unfavorable discharge from military service,” which generally applies to individuals who have been separated from the service with less than an honorable discharge, but it excludes those with a dishonorable discharge. In contrast, Washington’s fair housing law protects military status, but only honorably discharged veterans. The law in Rhode Island bans discrimination based on “military status as a veteran with an honorable discharge or an honorable or general administrative discharge,” or “servicemember in the armed forces.”

In the absence of statewide protections, there may be local laws protecting military status. Though Texas doesn’t list military status as a protected class, the law in San Antonio bans discrimination based an individual’s veteran’s status.

If subject to state or local laws banning discrimination based on military or veteran status, then you’ll need to review your policies and procedures to ensure compliance with legal requirements. It’s a good idea to ask your attorney about the specifics of the laws in your state and local area because of variations in the language used.

Coach’s Tip: Stay on top of proposed changes to antidiscrimination laws on the state and local level. In California, for example, the state legislators have approved a bill to ban housing discrimination based on veteran or military status; the measure was sent to the governor on Sept. 20, 2019. You should be able to get updates on what’s happening on the state and local level from your attorney or your local apartment association.

States with Laws Banning Discrimination Based on Military or Veteran Status

•      Connecticut
•      Illinois
•      Massachusetts
•      New Jersey
•      New York
•      Ohio
•      Rhode Island
•      Washington

Rule #2: Recognize Fair Housing Protections for Veterans with Disabilities

Regardless of whether military status is protected under applicable state or local law, federal fair housing law bans discrimination against veterans with disabilities. Under the FHA, disability means a physical or mental impairment that substantially limits one or more major life activities. In sum, the law protects anyone with a physical or mental impairment that’s serious enough to substantially affect activities of central importance to daily life—even if it isn’t obvious or apparent.

Recent veterans report high rates of service-connected disabilities (that is, disabilities that were incurred in, or aggravated during, military service), according to the Equal Employment Opportunity Commission. About 29 percent of recent veterans report having a service-connected disability, as compared to about 13 percent of all veterans. Common injuries incurred by these veterans include missing limbs, burns, spinal cord injuries, PTSD, hearing loss, traumatic brain injuries, and other impairments. Other veterans leave service due to injuries or conditions that aren’t considered service connected.

Nevertheless, fair housing law doesn’t prevent communities from responding to actual incidents of dangerous or violent behavior by a resident, even if he has a disability. According to federal guidelines, the FHA doesn’t protect an individual whose tenancy would constitute a direct threat to the health and safety of other individuals or result in substantial physical damage to the property of others unless the threat can be eliminated or significantly reduced by reasonable accommodation.

TIME OUT!

What Is Traumatic Brain Injury?

Traumatic brain injury (TBI) is a significant health issue that affects servicemembers and veterans during times of both peace and war. The high rate of TBI and blast-related concussion events resulting from current combat operations directly affects the health and safety of individual servicemembers and subsequently the level of unit readiness and troop retention. The impacts of TBI are felt within each branch of the service and throughout both the Department of Defense (DoD) and the Department of Veterans Affairs (VA) health care systems.

In the VA, TBI has become a major focus, second only to recognition of the need for increased resources to provide health care and vocational retraining for individuals with a diagnosis of TBI, as they transition to veteran status. Veterans may suffer TBIs throughout their lifespan, with the largest increase as the veterans enter into their 70s and 80s; these injuries are often caused by falls and result in high levels of disability.

Active duty and reserve servicemembers are at increased risk for suffering a TBI compared to their civilian peers. This is a result of several factors, including the specific demographics of the military; in general, young men between the ages of 18 to 24 are at greatest risk for TBI. Many operational and training activities, which are routine in the military, are physically demanding and even potentially dangerous. Military servicemembers are increasingly deployed to areas where they’re at risk for experiencing blast exposures from improvised explosive devices (IEDs), suicide bombers, land mines, mortar rounds and rocket-propelled grenades. These and other combat-related activities put our military servicemembers at increased risk for suffering a TBI.

Source: Defense and Veterans Brain Injury Center (DVBIC)

Rule #3: Consider Reasonable Modification Requests by Veterans with Disabilities

Carefully consider requests by veterans with disabilities for reasonable modifications. Under the FHA, it’s unlawful to refuse to permit, at the expense of a person with a disability, reasonable modifications of existing premises as necessary to afford him or her full enjoyment of the premises.

The law requires you to consider modification requests by a current or prospective resident to make structural changes to the interior or exterior of units and to common and public use areas when there’s an identifiable relationship between the requested modification and the individual’s disability. For example, it would be unlawful to refuse to permit the installation of a ramp by a veteran who uses a wheelchair due to loss of a limb or other mobility impairment.

Before granting a request for a reasonable modification, you may require a description of the proposed modifications. You may also require the resident to obtain any building permits and that the work be performed in a workmanlike manner. You may not insist that a particular contractor perform the work.

Rule #4: Consider Reasonable Accommodation Requests by Veterans with Disabilities

If a veteran qualifies as an individual with a disability, then you may be required to grant a request for a reasonable accommodation in rules, policies, practices, or services as necessary to allow him an equal opportunity to fully enjoy his dwelling.

Requests for reasonable accommodations often involve assistance animals or parking, but communities may face a wide range of disability-related accommodation requests for exceptions to rules and policies. Examples include requests for live-in aides, transfers to different units, early lease termination, and allowing a cosigner on the lease. In general, communities are responsible for paying the costs associated with a reasonable accommodation as long as it doesn’t pose an undue financial and administrative burden.

It may be challenging to handle accommodation requests when the disability isn’t obvious. If the nature of the disability isn’t apparent, federal guidelines permit you to ask for reliable disability-related information to verify that the person meets the FHA’s definition of disability—that is, has a physical or mental impairment that substantially limits one or more major life activities. Likewise, you’re allowed to ask for more information if there’s no identifiable disability-related need for the requested accommodation.

You can’t reject an accommodation request simply because it imposes some financial costs on the community. Before rejecting a request because you think it’s too costly, you should compare the cost of the requested accommodation and your financial resources against the benefits to the disabled resident, and whether there are other, less expensive alternative accommodations that would effectively meet the resident’s disability-related needs.

Example: In 2015, a court ordered a California community to transfer a veteran with disabilities and his family to a more expensive unit—and to let them stay there until the end of the lease—as a reasonable accommodation for his disability.

The resident was an Army combat veteran who was diagnosed with PTSD. Due to ongoing construction near his unit, the veteran asked the community to transfer his family to another unit away from the noise as a reasonable accommodation due to his disability. According to the veteran, the construction noise triggered nightmares, anxiety, and other symptoms because it reminded him of gunfire, explosions, and screaming, making him feel as if he were in a war zone.

Allegedly, the community didn't dispute that he had a disability-related need to be relocated during the construction, but the parties disagreed whether he could pay his current rent to live in a more expensive available unit. The community offered to move the family to another unit at his current rent but wanted them to move back when the construction was completed.

The resident rejected the offer, asking for a court order to let them stay until their lease ended five months later. He argued that the construction noise had already caused significant distress, so letting them stay until their lease ended would offer a reprieve from his PTSD triggered by the construction.

The court granted his request, ruling that the cost of moving the family to the more expensive unit during the construction was a reasonable accommodation that wouldn’t cause an undue financial burden on the community. And the increased financial burden to let them stay there through the end of their lease was minimal [Holland v. The Related Companies, July 2015].

Rule #5: Don’t Reject Disability-Related Requests for Assistance Animals

Pay particular attention to reasonable accommodation requests for an exception to your pet policies to allow a veteran to keep an assistance animal because of a disability.

Fair housing law doesn’t prevent you from having a pet policy—as long as you don’t use it to keep out assistance animals. Some communities ban pets altogether, while others place limits on the number, type, size, or weight of pets and impose conditions such as extra fees, pet deposits, or additional rent charges. Whatever your policy on pets, it’s unlawful to deny an exception for an assistance animal needed by an individual with a disability to fully use and enjoy the community.

Example: In July 2019, HUD charged a Maine community and one of its agents with discrimination for denying a veteran with disabilities the right to keep his assistance animal. In his HUD complaint, the veteran alleged that he called the community in response to an ad on Craigslist. When he told the agent that he had a disability-related need to live with his assistance dog, according to the veteran, the agent allegedly responded, “absolutely not,” and said she regretted allowing a prior tenant to live with his assistance dog because other tenants then wanted to get pet dogs.

“No person with a disability should be denied the accommodation they need, especially individuals who served in the Armed Forces to defend our freedom,” Anna María Farías, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity, said in a statement. “HUD will continue to work to ensure that housing providers meet their obligation to comply with this nation’s fair housing laws.”

Rule #6: Comply with Other Federal Laws Protecting Military Servicemembers and Veterans

Apart from your obligations under fair housing law, communities should know about—and comply with—two important federal laws protecting military servicemembers and returning veterans:

Servicemembers Civil Relief Act. The Servicemembers Civil Relief Act (SCRA), formerly known as the Soldiers’ and Sailors’ Civil Relief Act, is a federal law that provides protections for military members as they enter active duty. It covers issues such as rental agreements, security deposits, prepaid rent, eviction, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosure, civil judicial proceedings, automobile leases, life insurance, health insurance, and income tax payments.

Among other things, the SCRA allows servicemembers to terminate, without penalty, leases and rental agreements before or during active military service under certain circumstances. The SCRA also bars communities from evicting military members or their dependents from their principal residence during the period of their active military service without a court order. Complying with the SCRA should be at the top of community concerns when it comes to dealing with military servicemembers. Failure to do so can lead to civil penalties or damages—even criminal liability.

Example: In March 2019, a Virginia-based property management company and related entities agreed to pay up to $1.59 million to resolve allegations that they violated the SCRA by obtaining unlawful court judgments against military residents and by charging improper lease termination fees, according to the Justice Department. The settlement is the largest ever obtained by the department against a landlord or property management company for violations of the SCRA.

The complaint alleged that from 2006 to 2017, the company obtained at least 152 default judgments against 127 SCRA-protected servicemembers by failing to disclose their military service to the court or by falsely stating that they weren’t in the military.

Under the SCRA, if a landlord files a civil lawsuit against a tenant and the tenant doesn’t appear, the landlord must file an affidavit with the court stating whether the tenant is in the military before seeking a judgment. If the tenant is in military service, the court typically can’t enter judgment until it appoints an attorney to represent the tenant, and the court must postpone the proceedings for at least 90 days. Landlords and lenders can verify an individual’s military status by searching the Defense Manpower Data Center’s free publicly available website or by reviewing their files to see if there are applications, military leave and earnings statements, or military orders indicating military status.

The complaint also alleged that the company imposed unlawful charges against servicemembers who attempted to terminate their leases early in order to comply with military orders. The SCRA allows military tenants to terminate a residential lease early if the servicemember receives deployment or permanent change of station orders or enters military service during the term of the lease. If a tenant terminates a lease pursuant to the SCRA, the landlord may not impose any early termination fee.

The Uniformed Services Employment and Reemployment Rights Act of 1994. In their role as employers, communities must comply with the Uniformed Services Employment and Reemployment Rights Act (USERRA), which prohibits employment practices that discriminate because of an individual's past, current, or future military status, service, or obligation.

In general, USERRA seeks to ensure that servicemembers are entitled to return to their civilian employment upon completion of their military service. Servicemembers should be reinstated with the seniority, status, and rate of pay that they would have obtained had they remained continuously employed by their civilian employer. In addition, USERRA provides protection for veterans with disabilities, requiring employers to make reasonable efforts to accommodate the disability.

• Fair Housing Act: 42 USC §3601 et seq.
• Servicemembers Civil Relief Act of 2003: 50 USC App. §501 et seq.
• Uniformed Services Employment and Reemployment Rights Act of 1994: 38 USC §4301 et seq.

Answer: In a guest blog dated March 13, 2015, Jo Becker, Educational/Outreach Specialist for the Fair Housing Council of Oregon (“FHCO”) posted an article for the Willamette Valley MLS titled: “Screening without Social Security Numbers: There are Options!”  The post is set out in full at this link.

What I’ve set forth below is a summary of Ms. Becker’s points, with some editorial comment of my own.  First and foremost, this is not to be used as legal advice, as everyone’s factual situation is different.

Mr. Obama’s controversial (my word, not hers) amnesty program will result in approximately 4 million U.S. residents who are undocumented, coming into the United States.  Although they will have an opportunity to apply for work permits and social security numbers, many may still not have SSNs when seeking housing.

In pointing  out that “…the Fair Housing Act and Oregon law apply to everyone present in the US, regardless of immigration status” Ms. Becker suggests that there are alternatives to screening other than requiring proof of a SSN.  Though she recognizes the “importance of thorough tenant screening,” she states that:

 “…criminal history information can be acquired without an SSN and, of course, current and past landlords can provide rental history and references. Applicants may be able to provide other information such as proof of “x” number of recent months’ paid utility bills, rent, or other regular monthly bills that can show a pattern of timely payment.”

However, regardless of a landlord or manager’s willingness to rent or lease space to all who qualify, the litmus in screening is really what the screening company requires.  Ms. Becker suggests that rather than issuing a “flat no,” landlords and managers say to the applicant “show me what you can.”[1]   She states that:

“…your screening company should be able to give you an informed estimate about how much time and money an evaluation could cost.  Costs may vary so shop your screening company.  Once you have a cost estimate, inform the consumer and, if you wish and do so consistently, you may then pass this cost on to them if they want to continue with the application.”

This suggestion makes the following assumptions: (a) That the applicant actually has some reliable identifying information sufficient to permit the a company to complete the screening process; (b) The company is capable of completing the screening process – even for an increased fee – that does not rely upon a SSN; and (c) That the screening report will provide equally reliable information as if the applicant had tendered a SSN. 

Ms. Becker notes that an alternative to a SSN is an ITIN (Individual Taxpayer Identification Number). Here is what the IRS says about ITINs:

• ITINs are for federal tax reporting only, and are not intended to serve any other purpose. IRS issues ITINs to help individuals comply with the U.S. tax laws, and to provide a means to efficiently process and account for tax returns and payments for those not eligible for Social Security Numbers (SSNs). 
• If you do not have a SSN and are not eligible to obtain a SSN, but you have a requirement to furnish a federal tax identification number or file a federal income tax return, you must apply for an ITIN.
• By law, an alien individual cannot have both an ITIN and a SSN.
• For more information, go to link here.

Based upon the above, this leads me to believe – or at least suspect – that the use of an ITIN is really only appropriate if the individual has a federal income tax reporting obligation and is unable to obtain a SSN.  So the question landlords and managers should ask their screening company is whether it can even use the ITIN for purposes of tenant screening.  If the company can do so, and the background check can be accomplished with a comparable level of accuracy as with a SSN, then the following rules should apply:

1. If applicants do not have a SSN, but do have an ITIN, their application should be processed.
2. Make sure that the use of the ITIN in lieu of the SSN is applied evenly and consistently to ALL applicants.

If your screening company does not use the ITIN for tenant screening, are you legally required to find one that does?  I will leave that question to your own attorney.  As for me, if I could pass on the added cost, if any, to the applicant [as Ms. Becker’s article suggests], and the company can provide equally reliable and prompt service, I would personally consider doing so.  

However, Ms. Becker notes in her article that:

“After having consulted with screening companies and the credit bureaus, it does not appear that this will allow a credit report to be pulled in the same way that an SSN does.”  [Underscore mine.]

That statement does not sound like a ringing endorsement by Ms. Backer of her own suggestion that landlords use an ITIN in lieu of the SSN.  In any event, it’s worth a try.

So setting the ITIN issue aside, the FHCO’s position is that:

“…a refusal to review alternative documentation when a SSN is not available will have a negative and disparate impact on individuals whose national origin is not the US, thereby having a disparate impact on that protected class.  Therefore, a policy or practice of not accepting applicants because they do not have a SSN is not appropriate.  That said, we feel that passing on actual additional costs of screening in a situation like this as a legitimate business expense that could be passed on to the applicant. [Underscore mine.]

Here is where Ms. Becker and I part company.  What she is saying is that: (a) Since members ostensibly of a protected class [e.g. Mr. Obama’s four million invitees - who will be given an opportunity to apply for SSNs] will be adversely affected; (b) By insisting exclusively on the SSN as the sole screening tool, it indirectly singles them out, and that’s discriminatory.  That is what she means when she says it creates a “disparate impact.”  So even if a manager or landlord has no intent to discriminate – i.e. they are applying the SSN requirement to ALL applicants, it is the FHCO’s position that such a screening practice is a violation of the Federal and State Fair Housing Laws.

There is one problem with the above quote: Disparate impact theory has never been validated by the U.S. Supreme Court.  There are many legal scholars who maintain that the Fair Housing Act (“FHA”) was only intend to be applied to prevent intentional discrimination. 

After several false starts, on January 21 of this year, the case of Texas Dept. of Housing vs. The Inclusive Communities Project, was heard by the Supreme Court. In a Forbes article (“Disparate-Impact Theory Finally Gets Its Test At Supreme Court“) published the following oral argument on the day of the hearing, writer Daniel Fisher, stated that the case:

“…represents a long-awaited test of disparate impact, which critics say allows the federal government — or allied non-profit groups like Inclusive Communities — to sue businesses and housing authorities for committing racial discrimination not because an identified person discriminated but because the racial outcome was skewed one way or another.”

In other words, the issue finally before the Court is whether the FHA can be used to produce racial outcomes when there is no proof of intent to discriminate. [2]   

Conclusion. Although I disagree that landlords and managers are today engaging in illegal discrimination via disparate impact, when they rely exclusively upon SSNs as a screening tool, there are some take-aways from the Becker article I do endorse:

• The FHCO believes that landlords and managers should review “alternative documentation” protocols, rather than just saying “No” whenever an applicant seeks to rent or lease a space without a SSN.  I have no problem with that, and suggest park owners develop such protocols. 
• However, the protocols must produce a reasonably equivalent [i.e. timely and reliable], result as when using a SSN. 
• If there are companies out there that can produce such results without SSNs– even if more costly – they should be seriously vetted. According to Ms. Becker, the cost, as of today, can be passed on to the applicant, should he or she choose to proceed. 
• Note that Ms. Becker is not saying that park owners and managers must use alternative procedures, even if they are bad or unreliable.  She is only saying that, if available, alternatives should be considered. I repeat: Landlords and managers should not initially “screen” [i.e. reject] all tenant applicants based solely on the fact they do not have a SSN.[3] You want to see if there is an alternative screening protocol.
• If (a) valid alternative screening tools exist, and (b) they are equally applied, there should be no legal basis for a claim of discrimination if the tenant applicant does not pass that screening protocol.
• Whether screening out all tenant applicants based upon their not having a SSN would result in a “disparate impact” against members of a protected class and therefor violate the FHA, will have to wait until the U. S. Supreme Court issues its decision.

In the meantime, landlords and managers may want to investigate various screening companies today, to learn whether there are other suitable substitutes to using the SSN as a screening tool.  If there are, and they prove reliable, these alternatives should be included on a written list and provided to tenant applicants preferably upon first face-to-face contact.[4]  Remember to be consistent and apply this approach across the board to ALL tenant applicants. To be absolutely safe, I would even go so far as to say that the list – if one can be developed – should be given to all applicants with the rest of the park’s paperwork. In other words, don’t ask the applicant if they have a SSN, and if they do not, then refuse to give them an application. If there are comparable alternatives that a screening company will accept, then you may use one of them.    

[1] I respectfully submit that “show me what you can” is an insufficient and slightly misleading approach to the issue, as it is too open-ended.  It implies that the applicant need only produce what they can.  I suggest that the proper approach is to ask:  “Show me the best documentation you have of your identity.” If the applicant produces a valid birth certificate or a valid driver’s license, it may suffice for the screening company. If he or she produces a library card as the “best evidence,” there may be some difficulty in its suitability for use by the screening company.

[2] I wrote a blog post explaining disparate impact late last year, before the case was argued. It can be found here.

[3] There is a slightly comparable analogy with medical marijuana. As long as it is a federally “controlled substance” landlords may – in my opinion – have a policy against its on-site use, cultivation, manufacture, or sale; they do not have to allow its on-site use as a “reasonable accommodation.”  But having a no-medical marijuana policy does not mean landlords may “screen” tenant applicants, based upon whether they simply have a medical marijuana card.  

[4] I say “face-to-face contact”, as I don’t recommend engaging in a discussion of screening issues with applicants over the phone. There is too much chance there is a tester on the other end of the line. You want to be consistent in giving all applicants the same paperwork when they arrive.