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The SAFE Act has received a lot of attention lately by park owners, but did you know that it’s really only one law of many state and federal lending regulations you are required to comply with when selling homes on contract?

The SAFE Act requires you, the park owner, to either use a licensed Mortgage Loan Originator such as Blackhawk Capital Group or obtain your own origination licensing in order to sell your park homes on installment contracts. However, the greater issue is that obtaining those licenses for most companies is really a small step towards being fully compliant when acting as a creditor. Below are just a few of the other regulations that you need to follow as a creditor.

1) The Dodd–Frank Wall Street Reform and Consumer Protection Act (DFA) established the Consumer Financial Protection Bureau (CFPB) as an independent entity housed within the Federal Reserve Board (FRB). The newly created CFPB is the primary regulator for non-depository lenders with the broad authority to write rules to protect consumers, a.k.a. “borrowers”, from unfair or deceptive financial products, acts or practices. The CFPB will be collecting, investigating and responding to borrower complaints which can be easily submitted from the comfort of a resident’s home via the CFPB’s website.

The CFPB will be in charge of the major consumer protection laws including RESPA, TILA, HOEPA, HMDA, SAFE, Fair Credit, Interstate Land Sales Full Disclosure Act; Telemarketing and Consumer Fraud and Abuse Prevention Act; Inspector General Act; Privacy Act; Alternative Mortgage Transaction Parity Act (AMTPA); Electronic Fund Transfer Act (EFTA); Equal Credit Opportunity Act (ECOA); Expedited Funds Availability Act; Fair Credit Billing Act; Fair Credit Reporting Act (FCRA); Fair Debt Collection Practices Act; Federal Deposit Insurance Act (FDIA); Federal Financial Institutions Examination Council Act; Federal Trade Commission Act; Gramm-Leach Bliley Act (GLB) and more.

This would naturally imply that if you’re investigated because of a consumer’s complaint stemming from a denial of credit or foreclosure, the CFPB could easily extend the investigation to include an examination of all your lending practices.

2) The Mortgage Disclosure Improvement Act (MDIA) requires creditors to wait 7 business days after the delivery of the initial Truth in Lending Disclosure Statement before you can close the loan. In addition, if the APR changes by more than a specified tolerance from initial disclosure you’ll need to allow the borrower 3 additional business days. However, waiting periods can be shortened or waived if the extension of credit is necessary to meet a personal financial emergency. To shorten the waiver period, borrowers must prepare a signed and dated written statement, signed by all borrowers involved, detailing the specific emergency and requesting a waiver of the waiting period.

3) The Fair Credit Reporting Act (FCRA) places disclosure obligations on users of consumer reports and to ensure fair, timely, and accurate reporting of credit information. This means that you are required to notify the borrower when an adverse action is taken on the basis of such reports, such as if you deny someone a loan or offer them a smaller loan than what they applied for. In addition, you must identify the company that provided the report, so that the accuracy and completeness of the report may be verified or contested by the borrower. We recommend that you provide separate notices to each borrower to protect yourself from violating their privacy. There are additional criteria for those of you that furnish information to credit agencies that will land on a borrower’s credit report.

4) The Truth in Lending Act (TILA) applies to each individual or business that offers or extends credit more than 5 times for transactions secured by a dwelling in the preceding calendar year. There are many applicable areas within TILA depending on how your loans are structured so we’ll discuss the act in a few general areas only.

• TILA limits the amount of fees that can be charged on certain transactions without additional requirements and it limits when those fees can be charged for all transactions.

• TILA mandates early disclosure of a creditor’s identity, amount financed, itemization of amount financed, APR, finance charges, total of payments, payment schedule, prepayment penalties and late payment fees.

• Creditors are liable for violation of the disclosure requirements, regardless of whether the borrower was harmed by the nondisclosure.

5) Equal Credit Opportunity Act (ECOA) prohibits discrimination of race, color, religion, national origin, sex, marital status, age, or receipt of public assistance. Park owners may consider a borrower’s immigration status in order to ensure the borrower will be in the country long enough to repay the loan. You may not ask borrowers if they receive child support or alimony payments unless you notify them that they need only to provide this information if it will be used in determining their ability to repay. We encourage park owners to create written loan guidelines with clear underwriting standards to avoid violating fair credit laws. If you make an exception to your loan guidelines, be sure to properly document the reason for the exception and add it to the borrower’s file.

6) The Red Flags Rule requires creditors to implement a written Identity Theft Prevention Program to detect the warning signs of identity theft. There are four major components necessary to be compliant with the Red Flags Rule.

• First - be able to identify patterns, practices, and activity that signal identity theft.

• Second - incorporate business practices that will detect identity theft, “Red Flags”. Park owners using our loan processing service can rest assured knowing all borrowers are run through a red flag checklist which is provided after the completion of our underwriting process.

• Third - detailed response for any red flags detected by red flags.

• Fourth - your program must be updated periodically to reflect any changes or additional information you’ve discovered that will help reduce identity theft.

As you may have heard, Blackhawk Capital Group has developed a comprehensive, customizable loan processing solution to meet the needs of manufactured housing community professionals selling homes on retail installment contracts. Our goal is to provide you with a full compliance solution so that you can continue doing what you do best without having to learn all of the lending laws. You continue to be the lender and after the loan closes, you also continue to service your own notes. We simply facilitate the part of the transaction that requires a licensed mortgage loan originator. We facilitate the delivery of every form and disclosure that you will need to ensure you are compliant with the lending laws in your state. Currently, we are providing loan processing services in 11 states including Oregon, Washington, California, Utah, Idaho, Nevada, Arizona, Florida, Colorado, Maryland and New Mexico.

Our standard fee per loan is $895; however, we are proud to offer MHCO member communities a discounted rate of $800. To take advantage of this discount please email kmonte@bhcapitalgroup.com and be sure to include in your email that you’re a member of MHCO.

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

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

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

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

WHAT DOES THE LAW SAY?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

7 RULES FOR BEING PREPARED FOR FAIR HOUSING TESTERS

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

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

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

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

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

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

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

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

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

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

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

Rule #3: Watch What You Say in Your Advertising

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

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

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

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

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

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

Rule #4: Ensure Consistency in the Leasing Office

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

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

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

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

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

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

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

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

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

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

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

Rule #5: Provide Fair Housing Training to All Employees

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

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

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

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

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

Rule #6: Shop Your Property

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

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

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

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

Rule #7: Keep Good Records

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

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

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

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

The SAFE Act has received a lot of attention lately by park owners, but did you know that it's really only one law of many state and federal lending regulations you are required to comply with when selling homes on contract?

The SAFE Act requires you, the park owner, to either use a licensed Mortgage Loan Originator such as Blackhawk Capital Group or obtain your own origination licensing in order to sell your park homes on installment contracts. However, the greater issue is that obtaining those licenses for most companies is really a small step towards being fully compliant when acting as a creditor. Below are just a few of the other regulations that you need to follow as a creditor.

1) The Dodd - Frank Wall Street Reform and Consumer Protection Act (DFA) established the Consumer Financial Protection Bureau (CFPB) as an independent entity housed within the Federal Reserve Board (FRB). The newly created CFPB is the primary regulator for non-depository lenders with the broad authority to write rules to protect consumers, a.k.a. "borrowers", from unfair or deceptive financial products, acts or practices. The CFPB will be collecting, investigating and responding to borrower complaints which can be easily submitted from the comfort of a resident's home via the CFPB's website.

The CFPB will be in charge of the major consumer protection laws including RESPA, TILA, HOEPA, HMDA, SAFE, Fair Credit, Interstate Land Sales Full Disclosure Act; Telemarketing and Consumer Fraud and Abuse Prevention Act; Inspector General Act; Privacy Act; Alternative Mortgage Transaction Parity Act (AMTPA); Electronic Fund Transfer Act (EFTA); Equal Credit Opportunity Act (ECOA); Expedited Funds Availability Act; Fair Credit Billing Act; Fair Credit Reporting Act (FCRA); Fair Debt Collection Practices Act; Federal Deposit Insurance Act (FDIA); Federal Financial Institutions Examination Council Act; Federal Trade Commission Act; Gramm-Leach Bliley Act (GLB) and more.

This would naturally imply that if you're investigated because of a consumer's complaint stemming from a denial of credit or foreclosure, the CFPB could easily extend the investigation to include an examination of all your lending practices.

2) The Mortgage Disclosure Improvement Act (MDIA) requires creditors to wait 7 business days after the delivery of the initial Truth in Lending Disclosure Statement before you can close the loan. In addition, if the APR changes by more than a specified tolerance from initial disclosure you'll need to allow the borrower 3 additional business days. However, waiting periods can be shortened or waived if the extension of credit is necessary to meet a personal financial emergency. To shorten the waiver period, borrowers must prepare a signed and dated written statement, signed by all borrowers involved, detailing the specific emergency and requesting a waiver of the waiting period.

3) The Fair Credit Reporting Act (FCRA) places disclosure obligations on users of consumer reports and to ensure fair, timely, and accurate reporting of credit information. This means that you are required to notify the borrower when an adverse action is taken on the basis of such reports, such as if you deny someone a loan or offer them a smaller loan than what they applied for. In addition, you must identify the company that provided the report, so that the accuracy and completeness of the report may be verified or contested by the borrower. We recommend that you provide separate notices to each borrower to protect yourself from violating their privacy. There are additional criteria for those of you that furnish information to credit agencies that will land on a borrower's credit report.

4) The Truth in Lending Act (TILA) applies to each individual or business that offers or extends credit more than 5 times for transactions secured by a dwelling in the preceding calendar year. There are many applicable areas within TILA depending on how your loans are structured so we'll discuss the act in a few general areas only.

- TILA limits the amount of fees that can be charged on certain transactions without additional requirements and it limits when those fees can be charged for all transactions.

- TILA mandates early disclosure of a creditor's identity, amount financed, itemization of amount financed, APR, finance charges, total of payments, payment schedule, prepayment penalties and late payment fees.

- Creditors are liable for violation of the disclosure requirements, regardless of whether the borrower was harmed by the nondisclosure.

5) Equal Credit Opportunity Act (ECOA) prohibits discrimination of race, color, religion, national origin, sex, marital status, age, or receipt of public assistance. Park owners may consider a borrower's immigration status in order to ensure the borrower will be in the country long enough to repay the loan. You may not ask borrowers if they receive child support or alimony payments unless you notify them that they need only to provide this information if it will be used in determining their ability to repay. We encourage park owners to create written loan guidelines with clear underwriting standards to avoid violating fair credit laws. If you make an exception to your loan guidelines, be sure to properly document the reason for the exception and add it to the borrower's file.

6) The Red Flags Rule requires creditors to implement a written Identity Theft Prevention Program to detect the warning signs of identity theft. There are four major components necessary to be compliant with the Red Flags Rule.

- First - be able to identify patterns, practices, and activity that signal identity theft.

- Second - incorporate business practices that will detect identity theft, "Red Flags". Park owners using our loan processing service can rest assured knowing all borrowers are run through a red flag checklist which is provided after the completion of our underwriting process.

- Third - detailed response for any red flags detected by red flags.

- Fourth - your program must be updated periodically to reflect any changes or additional information you've discovered that will help reduce identity theft.

As you may have heard, Blackhawk Capital Group has developed a comprehensive, customizable loan processing solution to meet the needs of manufactured housing community professionals selling homes on retail installment contracts. Our goal is to provide you with a full compliance solution so that you can continue doing what you do best without having to learn all of the lending laws. You continue to be the lender and after the loan closes, you also continue to service your own notes. We simply facilitate the part of the transaction that requires a licensed mortgage loan originator. We facilitate the delivery of every form and disclosure that you will need to ensure you are compliant with the lending laws in your state. Currently, we are providing loan processing services in 11 states including Oregon, Washington, California, Utah, Idaho, Nevada, Arizona, Florida, Colorado, Maryland and New Mexico.

Our standard fee per loan is $895; however, we are proud to offer MHCO member communities a discounted rate of $800. To take advantage of this discount please email kmonte@bhcapitalgroup.com and be sure to include in your email that you're a member of MHCO.

1. "Pick Your Shot" Never pick a fight you don't think you can win. And if you decide to fight, make sure you get in your best shot. By this I mean the following: (a) Just because a tenant has violated one of the park rules, don't think the first thing you must do is file a 30-day notice to terminate. If you file the notice, you've got to stick with it. If the tenant fails to make the correction within the 30-day period, you may have no choice but to file for eviction. Most lawyers want to go to court in an eviction proceeding with a file showing that the landlord or manager has "walked the extra mile" in trying to work with the tenant. Judges and juries can be naturally sympathetic to tenants. It bodes better for landlords when the evidence suggests that the tenant was either ignoring the landlord, or intentionally trying to aggravate the situation by breaking the rules. Landlords and managers should strive to have at least two - if not more - polite reminder notices sent to the tenant. The reminder does not have to give the tenant 30 days to come into compliance. If a week is reasonable, give a week. If compliance doesn'toccur within that time, send a second reminder, giving another week. If compliance occurs, but the violation reoccurs, give another reminder. The more paper in the file, the better the landlord's chances of prevailing in court. (b) Once you decide to file for eviction, make it your best shot. For example, if the tenant has broken three of the rules, only select the most serious ones. And if the violation is something that can be verified by photographs, take some. Make sure that the photos accurately depict the conditions constituting the violation as of the date immediately preceding the date of the 30-day notice. When the 30 days has expired, immediately take another set of pictures that prove the violation was not cured. Never take the pictures on the 29th or 30th days. Take them on first day after expiration of the 30 days. Also, if the matter does go to court and the violation still exists, take pictures immediately before trial. (c) If the case is capable of being resolved prior to filing, or even prior to court, give it serious consideration. For example, say the tenant cured the violation on the 35th day after receiving a 30-day notice - and has pictures to prove it. It is doubtful that a judge will evict them, even if they were technically outside of the 30-day compliance period. Consider dismissing the case if the tenant will pay the filing fees.

2. Draft All Default Notices Carefully In the vernacular of lawyers, the notice is "jurisdictional" - that is, it is the basis upon which the court will or will not exercise jurisdiction by hearing the case. If a 30-day notice is defective, say because it gave the tenant 29 days to comply instead of 30, the court cannot hear the merits of the case. You could have the best case in the world, and would have won in court without question - but it will make no difference if the notice is defective. The court has no alternative but to dismiss the complaint. If the tenant was represented by an attorney who filed an answer or other legal document on behalf of the tenant, it is probable that you will have to pay his/her attorney fees. Accordingly, if in doubt, have your attorney review the notice before it goes out... especially if the tenant is one that will likely refuse to comply and force you into court.

3. don't be Afraid to Dismiss If the notice is obviously defective, there is a high likelihood that the other attorney will recognize it. If so, consider dismissing the case as soon as possible. It will serve no purpose - except to pad the other attorney's pocket book - by continuing the fight in court. Sometimes it is better to simply start over. Dismiss the case, send out a corrected notice, and if the tenant fails to comply, file another eviction. Although Oregon law does not require that landlords use an attorney to file evictions, it is always a good idea in those cases in which you know the tenant is already represented, or will seek legal representation before trial. In such cases, landlords should consider having their attorney at least review the background facts and notice before the eviction is filed.

4. Maintenance Violations These are one of the most prevalent and difficult of tenant violations. There are several reasons. Frequently, the violation, say continually storing "junk" on the space in plain view from the street, is really a matter of degree. For example, while a barbecue and picnic chairs, neatly covered, may not be a problem, if they are old wooden chairs, a dilapidated table, a broken down barbecue, and an old air conditioner, all covered with a torn canvass tarp held in place by firewood, it will pose a problem. Unfortunately, it is frequently such cases that gets into court - the tenant arguing that the problem is not as bad as the landlord maintains. Also, landlords must be careful about consistent treatment. It makes little sense to go to court against one tenant with a poorly maintained space, if there are a dozen others whose spaces are just as bad. In such cases, where the landlord (or perhaps the predecessor landlord) has been lax in enforcing maintenance violations, it is wise to first send out a park-wide notice to all tenants that the maintenance rules will be enforced. The notice should request that all tenants clean up their spaces, if necessary. Give everyone 30, 45, or 60 days to comply, during which time the manager should work with the worst offenders. Managers should take careful notes, documenting their efforts to secure compliance.

5. Select & Keep Good Managers Not only is this good for the landlord, but it is good for tenant relations, as well. There are exceptions. Some tenants will attempt to demonize even the best managers. Unfortunately, the reverse can be equally true. But generally, good managers will get along with their tenants. This will go a long way in keeping peace in the park. But being a good manager is not simply being liked by the tenants. Good managers will enforce the rules in an even-handed and fair manner. They will be cordial with tenants and always attempt to communicate a rules violation first with a visit or phone call. Such efforts should always be documented for the file. Evictions can be won or lost depending upon whether the managers are likeable. My experience has been that when a dispute gets into court, the tenant, along with his/her witnesses, will attempt to place blame on the conduct of the manager. For this reason, the history of any case that finds its way to court should be replete with documentation that the manager attempted to work with the tenant. The judge and/or jury should be convinced that the eviction was a last resort, and that the manager did everything humanly possible to secure the tenant's compliance before the case was ever filed.

Do employees know our management direction and is it consistently implemented? We all should have our structure to accomplish goals of our management direction. Mentioned in this article are suggestions that are critical to our businesses, service to our residents, retention of employees, and to stay out of court.

I'm sure you're already a dedicated successful business person. Even with the busy schedules we have today, is it worth your time and money to be an more effective park owner. These suggestions I will present are proven to work: in one park, for example, there have been only three management teams in the last thirty years, each staying ten years. A dedicated staff have stayed and performed very well for five to nineteen years. They have eighty five residents who have been living in the park for ten or more years with fifteen residents being at the park for twenty or more years. Survey results show resident satisfaction as "happy" and they would recommend the park to family and friends.

A good management team is the biggest factor to success of our businesses.

Many find that the use of a professional property management company is critical. It can be risky to operate your park without a full and complete knowledge of all current laws and trends. You must ask yourself if you have that knowledge or the time to do re-search necessary to effectively run your park.

Our business is far too complicated for us to know all aspects of a changing environment. Whether it is local politics, timely and correct response to personnel and resident issues, or help with business strategies, it is very complicated and costly to make un-informed decisions. It's difficult to be effective at all things at all times. (Keep in mind that your WMA local representative is an important source of information regarding local laws and regulations.)

Just as property managers have specialists; our businesses should have specialists within our parks with specific responsibilities. Without specific assignments no one will feel responsible for tasks.

As a reminder, the following suggestions may be helpful in managing your business.

"Park within a Park" Rental Homes

Today, many of us have come to rely upon park rentals to maintain profitability and cash flow. If this is the case for your business, someone in your organization must have your rental business as their first responsibility. Prospective renters have to be found and vetted, and decisions made based on the data collected. Do you want to be the collector of all this information? Probably not.

Knowing the reasons why people choose your park is also import-ant. It's good to be aware of the reasons people move in or out. What motivated them to select your park? Using a questionnaire to find out this information will help reveal trends that may help you to manage your rentals more effectively. How can you know your rental business if you don't have data to support decisions and the future for your rental business?

When selling or refinancing a park, buyers and lenders can make informed decisions if you are well documented. Financing can be difficult when rentals are big part of your revenue and expenses. It is a confidence builder for your loan representative and their loan committee if a solid case can be made that you are managing your rental business well.

Develop a "work-order" process, so renters can let you know if something needs to be repaired. Their satisfaction will keep turn-over low.

Know your Inventory

Knowing your inventory is a key factor in projecting your future rental business and cash needs. With up to date information, you will know what each home needs in order to be ready for rental.

Homes need to be safe and acceptable to be rented. If you have a few rentals, it is easy to know the specifics of each home. If you have fifty homes rented and ten needing work, organized and specific data is needed to know which home should be scheduled first for refurbishing.

Curb appeal is a first and lasting impression. People will form opinions about your business based on what they see first.

Consider a color pallet for homes to be painted. (I'm sure we have all seen resident or manager se-lections that are less attractive than we would like them to be.) Keeping a consistent color pallet across your park will have an aesthetically pleasing effect. If you do this, there will be no surprises when you visit your park.

Keep an Eye on Past Due Rents

Our life blood is collecting rents. Monitoring the past due amounts, identifying chronic slow payers, issuing three and sixty day notices, and being a bill collector is a critical aspect of park management. Telephone calls and letters need to be sent, followed up, and timely action needs to be taken to collect rent.

Collection communication takes a special type of person. The per-son responsible for collection may or may not have the personality to collect from people they see every day. If not, see if someone else in your organization would be a better fit.

Managing our Managers and Staff

Once people have been found, hired, and trained, keeping them around is very important. Employees leaving is costly and de-moralizing. It's important to let employees know what is expected of them, and inspect their work. Document their work tasks, and have periodic reviews. This may seem like a lot of work, but the benefits to your business will be great.

One of a manager's important tasks is to be visible to residents and staff. They must be aware of the local politics, changes to city laws and what new issues are the current hot topics. They are your eyes and ears to what is being talked about by your residents.

The following are some ideas to consider when you want loyalty from employees:

-Paid vacation

-Health Insurance, full or partial payment by park

-Give managers permission to take a "resident to lunch" or to do something they feel will help resident satisfaction

-Allow your manager to grant limited "personal time" for doctors appointments and family issues

-Allow law mandated sick days

-Surprise "half day off ". It doesn'tcost much, and will buy productivity when they come back

-"All Hands" quarterly luncheon to review past performance and plans for the near short term

-For special efforts and major projects completed, give paid days off, or gift certificates to take their family out for dinner

It is not the size of thank you, it is the recognition. don't we all like the recognition from work that we can share with family and friends?

Let employees know "your way" of handling resident questions, resident requests, and complaints.

Homes Being Vandalized

Have you had thefts or vandalism to resident homes, yard, and car, park facilities, or had equipment being stolen? It's important to make sure that your staff members are driving the park all day. Make them your eyes and ears for suspicious people or delivery trucks. Have managers develop a relationship with local police.

Train your Neighborhood Watch group and recognize their efforts with periodic coffee and cookies, or lunch.

Buy a used police car and rotate it around the interior and exterior of the park. In one park a resident bought the car for $1,000. It looks like an undercover police car and is working to scare petty thieves. Pit bulls, armed residents, and vigilantes are not suggested.

I know some of the suggestions will take a while to implement and some of these you won'tlike, however it's necessary to make the effort to do something that will be noticed by employees and residents.

You will find that if you have taken the time to do some of the things that were mentioned, the small stuff will come more easily.

MHCO would like to thank WMA (Western Manufactured Housing Communities Association) for this informative article. Thank you!

Vance DiMaria has been a managing partner of Casa Del Rey MHC in Hemet and a partner in other communities in California and Arizona. He can be reached at 949.378.8285 phone; 949.831.1514 fax; and email: jvdmaria@aol.com.

WHAT DOES THE LAW SAY?

Section 804(c) of the federal Fair Housing Act (FHA) makes it illegal “[t]o make, print, or publish, or cause to be made, printed, or published any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin.” Notice that the rule covers not just landlords who make discriminatory statements in ads but also those who publish them.

The U.S. Department of Housing and Urban Development (HUD) interprets the prohibition very broadly as applying to all kinds of ads, not just newspaper ads. Moreover, the offense isn’t discriminatory advertising but making discriminatory statements, which includes communications that you may not normally think of as advertising, such as:

• Spoken, written, and online statements—including words, phrases, pictures, symbols, and other graphic images—that send the message that housing isn’t available to particular groups because of race, color, religion, sex, handicap, familial status, or national origin (which we’ll refer to collectively as “protected characteristics”);
• Expressing to leasing agents, employees, prospects, or any other person a preference for or against any renter because of the renter’s protected characteristic; and/or
• Selecting media or locations for advertising that deny particular segments of the housing market information about housing opportunities based on a protected characteristic.

Example: “Loft Apartments. . . . For Adults 21 & Over.” A family with a young child sued the owner of a Pennsylvania luxury community that placed ads including this language in local newspapers. HUD joined the lawsuit. The federal court found the owner liable for discriminatory advertising and ordered it to pay $35,000 in damages [U.S. v. Joyce, 2010].

It’s Not What You Mean But What You Say

Unlike with most other forms of fair housing violations, liability for making discriminatory statements doesn’t require proof of discriminatory intent. What matters is not what you meant but whether the statement you actually made would suggest a preference to an “ordinary reader or listener.” Thus, innocent intentions are no defense to a violation.

Example: The Massachusetts landlord probably acted with the best of intentions in running a Craigslist ad stating that an apartment was “not deleaded, therefore it cannot be rented to families with children under six years old.” But whatever the landlord’s intentions were, the ad clearly communicated the message that the apartment was off limits to families with children. Result: The landlord had to shell out over $38,000 in damages [Massachusetts Attorney General’s Office, May 2013].

You also need to recognize that exclusion can take the form of not only discouraging but also encouraging groups of people. Thus, phrases like “ideal for singles” imply that married couples with children are unwelcome.

Beware of State Fair Housing Laws

Finally, keep in mind that federal requirements are just the baseline for compliance and that most states have adopted their own fair housing laws covering groups or characteristics that the FHA doesn’t list as protected, such as sexual orientation, gender identity, marital status, ancestry, age, military status, and source of income. Thus, for example, an ad that includes the phrase “No Section 8 vouchers” would violate the laws of states that ban discrimination on the basis of a person’s source of income.

7 RULES FOR AVOIDING DISCRIMINATORY ADVERTISING

The ban on making discriminatory statements applies to a broad range of advertising and marketing practices, but the basic rules don’t vary by medium. Stated differently, the formula for avoiding discrimination in traditional advertising is pretty much the same as it is for avoiding discrimination in internet advertising. Thus, HUD, fair housing groups, and victims continue to bring cases against landlords and publishers for discriminatory statements made in newspapers and other traditional media outlets.

Rule #1: Avoid Discriminatory Buzzwords

Landlords that use phrases like “Whites Only” or “No Wheelchairs” in their ads richly deserve the liability they incur. But unlike obscenity, people don’t intuitively recognize discriminatory advertising when they see it. If they did, the vast majority of landlords who do believe in fair housing principles and want to comply wouldn’t get into trouble because of their ads. Inadvertent liability is often the result of using certain buzzwords and phrases that send subtle messages of exclusion. They may include not only references to protected classes and characteristics but seemingly neutral words like “restricted,” “exclusive,” or “private.”

Descriptions of the neighborhood can also raise a red flag. In describing the community, stick to neutral terms, such as “desirable neighborhood” or “quiet streets,” and avoid words indicating which groups live in it.

Standard descriptions of a unit’s features that include otherwise taboo words, such as “walk-in closets” and “family room,” don’t violate fair housing law, as long as the advertisement doesn’t otherwise suggest a discriminatory preference, according to HUD. (See this table based on government guidelines from the State of Oklahoma.)

Rule #2: Market Property, Not People

The rule of thumb for avoiding discriminatory advertising is to market the property and its amenities, not the people you think should live in it. Vet every ad, slogan, and marketing piece you create with one question in mind: Will the prospects who look at this item feel welcome? In making this determination, set aside your own personal opinions and consider the view of the “ordinary reader or listener,” since this is the standard by which you’ll be judged if somebody files a fair housing complaint.

Compliance strategy: Because litigation is so expensive—even when you win—the primary goal should be to avoid it at all costs. Thus, if there’s even a question about whether ad language will cross the line, err on the side of caution by not including it.

Example: If it could have done things differently, an Ohio community would have probably chosen not to run an online ad suggesting that, “Our one bedroom apartments are a great bachelor pad for any single man looking to hook up.” The good news is that the community eventually won the lawsuit claiming that the ad discriminated on the basis of familial status and sex; the bad news is that it took the community over five years of litigation and tens if not hundreds of thousands in legal fees to ultimately prevail [Miami Valley Fair Housing Center, Inc. v. The Connor Group, December 2015].

DEEP DIVE

Exceptions Where Ads May Express Preferences

While the law generally bans statements that express a preference based on a protected characteristic, there are a few exceptions, including:

• Roommates: Ads stating a preference for members of a particular sex as a roommate in a shared-living arrangement;
• Senior housing: Ads excluding children in communities that qualify under the “housing for older persons” exception, which applies if:
  • HUD has determined the housing is specifically designed for and occupied by elderly persons under a federal, state, or local government program; or
  • The housing is occupied solely by persons 62 or older; or
  • It houses at least one person 55 or older in at least 80 percent of the occupied units, and adheres to a policy that demonstrates an intent to house persons who are 55 or older; and
• Accessible housing: Ads with information about the availability of accessible housing; and
• Affirmative advertising: Ads designed to attract persons to dwellings who would not ordinarily be expected to apply, when such efforts are part of an affirmative marketing program or undertaken to remedy the effects of prior discriminatory housing advertising or marketing.

Rule #3: Beware of Discriminatory Use of Human Models

Pay close attention to not just the words but the images contained in your ads and marketing materials. Be especially careful about using human models, whether via video, photograph, drawing, or other graphic techniques, to express preferences for or against different groups. The classic example is a picture or video that uses all white models to portray your residents. Whether you realize it or not, such an ad sends the message that people of color aren’t welcome in your community. Similarly, ads showing nothing but able-bodied people running, playing tennis, or engaging in other physical activities may send subtle exclusionary messages to persons with disabilities; failing to display kids may have the same effect on families with children.

Accordingly, HUD cautions that models used in display advertising campaigns “should be clearly definable as reasonably representing majority and minority groups in the metropolitan area, both sexes, and, when appropriate, families with children.” If used, models should also portray persons in an equal social setting and indicate to the general public that the housing is open to all without regard to race, color, religion, etc., HUD adds.

Landlords and their employees need to keep these principles in mind for not just professional shoots but handheld videos shot with a smartphone for posting to Facebook, Instagram, Zillow, or any other online site. There should be guidelines in place for vetting videos for potential fair housing risks before hitting the “send” button.   

Rule #4: Put the HUD EHO Logo in All Ads

There is one thing you should include in all of your advertising: the HUD equal housing opportunity (EHO) logotype, statement, or slogan. While not technically required under the FHA, these materials send the very opposite message conveyed by discriminatory ads, namely, that the property is available to all persons regardless of race, color, religion, sex, handicap, familial status, or national origin.

In addition to enhancing your reputation as an equal housing opportunity provider, including the logo may also serve to contradict any discriminatory messages your ads inadvertently send. One example is advertising for communities that have a religious name (such as “Roselawn Catholic Home”) or use of a religious symbol in an ad. According to HUD, these practices may indicate an illegal religious preference. But HUD also says that use of the religious name or symbol will be deemed acceptable if it’s paired with a disclaimer stating that the community doesn’t discriminate based on race, color, or any other characteristic protected under federal, state, or local law.

The logo examples here come from HUD’s fair housing advertising regulations that were officially rescinded as part of a large effort to eliminate advisory materials from official regulations, but which HUD still unofficially follows in implementing the law. The choice of logotype, statement, or slogan will vary depending on the type of media used (visual or auditory) and, in space advertising, the size of the advertisement. The rescinded regulations include a table for determining logo size in newspapers and other traditional print media:

For other ads, the EHO logo should be at least equal in size to the largest of the other logotypes; if no other logotypes are used, the type should be bold display face which is clearly visible.

Rule #5: Avoid Discriminatory Ad Placement  

Consider not just the content of your ads but where you place them. Explanation: Historically, landlords have been able to perpetuate segregation by deliberately advertising only in certain publications or outlets that minorities targeted for exclusion are known not to use. Examples include strategically placing billboard ads in predominately white neighborhoods and running newspaper ads in local publications read mostly by a white audience. The digital age and rise of websites that use sophisticated algorithms to target highly specific audiences have significantly increased the potential for landlords to engage in selective and manipulative ad placement strategies.

Of course, HUD and fair housing organizations are aware of these practices and scrutinize landlords’ marketing practices for evidence of discrimination.

HUD has also warned against relying exclusively on English-language media or media catering to the majority population in an area where non-English language or other minority media is also available.

Example: A group of 15 Latino residents sued the owners and operators of seven rental properties in Los Angeles for deliberately excluding Latinos by marketing newly vacated units primarily through websites directed at young, English-speaking, single, nondisabled people (such as Radpad, Hotpads, and Walk Score). The defendants denied the accusations and asked the federal court to toss the case without a trial. The court ruled that the residents had a legally valid claim and could take their case to trial [Martinez v. Optimus Props., LLC, March 2017].

Your best defense is a proactive strategy relying on the creation and implementation of a written marketing plan to ensure that your marketing campaign is as broad and inclusive as possible. Retain copies of the ads you place, along with detailed records of when and where you placed them. Documenting your efforts to reach a wide, diverse audience will help you defend yourself against claims of selective advertising; better yet, it may prevent such claims altogether.  

Coach’s Tip: One exception to the ban on selective ad placement allows for targeting a particular group as part of a broad, inclusive marketing campaign, provided that the landlord has a valid, nondiscriminatory reason for doing so. For example, it may be permissible to run ads in a Vietnamese language newspaper if large numbers of Vietnamese people settle into your community and surrounding area.

DEEP DIVE

Fair Housing & Facebook

In 2018, the National Fair Housing Alliance and other fair housing groups sued Facebook for “virtual redlining” by allowing housing advertisers to use its platform and lists of “excluded” groups to customize ads that families with children, women, and other protected classes wouldn’t be able to receive. The complaint also accused Facebook of giving housing advertisers the ability to exclude certain “interest” categories from receiving ads that are disability-based (such as people who are interested in disabled veterans or disabled parking permits) or national origin-based (such as people who are interested in English as a second language).

Facebook settled the suit in 2019 by agreeing to change its advertising platform. However, HUD wasn’t impressed with the solution and has filed its own lawsuit challenging Facebook’s advertising practices in federal court.

Meanwhile, a group of Facebook users have brought a class action against the social media giant contending that they were on the receiving end of housing advertisers’ discriminatory practices enabled by the use of the Facebook platform. In January 2021, a federal court rejected the claim for lack of specificity; however, the dismissal was “without prejudice.” Translation: The plaintiffs can still file an amended complaint.    

Rule #6: Keep Your Advertising Methods Consistent

Expansive campaigns targeting multiple markets can expose you to liability if your advertising methods are selective. So try to keep your campaigns consistent from market to market. For example, when using human models primarily in media that cater to one racial or national origin segment of the population, consider a complementary advertising campaign using models targeting other groups. Another example of selective marketing is using racially mixed models to advertise one property and not others. You also need to be careful when advertising in publications or other media directed at one particular sex or persons without children.

Rule #7: Beware of Discriminatory Advertising on Your Community Website

As a matter of fair housing compliance, your website is an extension of your advertising to the extent you use it to show the benefits of living in the community. Result: You need to be careful that the content you post—including words, photos, video, and other graphic images—don’t express preferences for or against any groups based on race, religion, sex, or other characteristics protected under federal, state, or local fair housing laws.

In general, the website should describe the community, its units, and amenities, but not the kind of people who should want to live there. Providing maps and directions can also express preferences if they include references to institutions or landmarks associated with certain racial, religious, ethnic, or other groups. Examples: Saying your community is within walking distance of:

• A church (signal to Christians)
• A black development (signal to blacks);
• A development known for its history of excluding minorities (signal to whites); or
• A community center dedicated to a particular nationality.

By: Dale Strom

Dale Strom is a second generation Manufactured Home Community landlord. He is a Board Member, past President and current Treasurer of MHCO and owns two manufactured home communities in Oregon.

This is the fifth of a multiple part series on a private owner of a Manufactured Home Community willingly attempting to sell that Community to an Association of tenants within that Community. Riverbend MHP is a 39 space community located within the city limits of Clatskanie, OR.

The fourth part of this series covered a period of time immediately after the tenants met with representatives from CASA to early October where both parties were anticipating to sign a purchase agreement on November 1. This period of time of will encompass almost 5 months.

The author is called by both CASA's Executive Director and the Development Manager. Obviously, there is something that isn't going according to schedule. Obviously, November 1 will come and go without the completion of the sale.

Before we get back to the phone call from CASA, a few details that occurred after September 1 were not mentioned in thefourth part of this series.

THE PAPERWORK PROCESS - The Cooperative requested an appraisal on Riverbend for the purpose of financing. An application for Capital Needs Assessment was required to fund the appraisal. Although this process was a few days late, this shouldn't delay the sale, if any, at all. The request for the appraisal was made on or around September 17. The completed appraisal was submitted to the State on October 16.

The appraisal, once completed, is the last and remaining document for the application process. The application then activates the underwriting process. When the State grants its approval of the underwritten application, it is then forwarded to the Oregon Housing Stability Council (HSC) for the final approval. So, who then gives the financing approval?

Grant agreements are then drafted and agreed to by CASA, the Cooperative and the Department of Justice for comments and approval of the funds needed to finance this purchase agreement. Once the agreement has gone through the many approvals and those signatures have been secured, the sale then gets the go ahead. The closing is all that remains. 

PARK OPERATIONS - Always in the back of my mind in the 4thquarter of each year is budgeting and my assessment for a need to increase the rent. Scheduled rent increases that I have asked of the tenants usually takes place on January 1. If the sale does not go through as expected, I will need to start in late September on implementing the increase.

All Oregon MHP landlords know that when they feel that they must increase their rents, that landlord will immediately turn to their Oregon Revised Statutes and go directly go to ORS 90.600. Those landlords will then be reminded that all tenants will need to be given a 90 day notification upon a landlords need for such an increase. In this case, I needed to get my notifications in the mail by September 26 to insure that the tenants did get their notices by September 30 in time for the January 1 implementation. (In Oregon, a tenant needs to be properly served via first class mail so that the notices are in their possession for the full 90 days before the rent is due).

My tenants were now aware that if I was still the owner of the community on January, their rents were now to be increased from $370 to $380 per month for the New Year. (Yes, that is the going rate of MHP rents in the small city). The request for the rent increase at the beginning of the year would become prophetic in more than one way.

Now we have an appraisal, capital needs assessment, an application, a submittal to the State for underwriting, approval by HSC for final approval, financing and finally approval by the Department of Justice, CASA and the Cooperative. And then we are ready for a closing on November 1. What could possibly go wrong???

Receiving the phone call from the Executive Director and Development Manager of CASA, they informed me that the events of their due diligence, application and approval process leading to a final sale was running behind their timeline. Their request was that we agree to and move back the closing date to March 1.

If you remember from the first part of this series, I wanted to sell this community for several reasons. I thought that the possible sale to the tenants would work for me because I was not going to exercise my 1031 option and I wanted to sell but didn't need to sell. The exemption of the State Capital Gains was another huge benefit that does not go ignored. I could wait when the purchasing party was ready.

I also mentioned in the first part of the series that my terms on selling would increase the Ernest Money by $10,000 per month for 2 months for any delay by the buyer for this sale.

CASA did want to delay the sale of the park back to March 1 because of delays of the process that the buyer needs to achieve in this process. It appears that the delay could possibly be with the Department of Justice. It has been suggested to me that the DOJ accomplishes its work on its timeline and doesn't have any kind of fast track program for this type of case. Whatever the delays were, the Ernest Money was increased by $20,000.

Then there is the case of my onsite manager. She has been there the entire 12 _ years that I have owned the community. She has spoken to me over the past 2 or more years about retirement and spending more time for herself and family. She does not want the responsibility of park management anymore. My agreement with my manager when I signed the Purchase Agreement was that she would work for me until November 1. This was extended another month, when the extension by CASA was requested. My manager still resides in the park and will continue to live there as a tenant. 

During this time, I have also been in frequent contact with the Coop board President and the Treasurer about the status of the park. This can lead to problems of a conflict of interest here although the best interest of the Community is most important to both parties. I continue to speak with the onsite manager regarding the status of the park. When it is necessary to speak with the 2 board members, usually the conversation will swerve into the current status of the park and how some issues need immediate attention. With all that has occurred since the formation of the board for the Cooperative, I can honestly say that I have had a great working relationship with both the President and the Treasurer. Also adding that they, in no way, have acted in my behalf to take care of any issues that I have a need to accomplish. I have seen this as phasing out my current manager and bring in the new ownership.

I do look forward to closing this deal in that we have been working on this sale for almost 5 months. Now I look at this delay from another standpoint. We are getting late in 2018. Pushing this sale back into 2019 will make tax planning much easier in that I have more time to do that planning. In addition, the rent increase will be implemented on schedule on January 1. It became prophetic in that the $380 rent is the amount that the Cooperative will start asking its members upon closing.

It remains to be seen if this rent in the long run can be sustained by the Cooperative or if an adjustment of the rent will need to be made.

Now that we are targeting the close sometime in the first quarter of 2019, I can now anticipate enjoying the Thanksgiving and Christmas holidays. But I also need to find the proper way to sell" the 2 park owned homes to the "occupants" (not a complete legal description of the habitants) of those homes.

Recently

Because, while Oregon permits the medical use of marijuana, the Federal Controlled Substances Act, 21 U.S.C. _ 801, et seq., says that it is illegal to manufacture, distribute, and possess marijuana, even when state law authorizes its use. Furthermore, federal law supersedes state law where there is a direct conflict between them. So, what does a landlord do when confronted by a card-carrying tenant claiming that he/she cannot be evicted for marijuana use and/or cultivation, because they have a legal right to do so under Oregon law. To second arrow in the tenant's quiver is the threat that "if you try to evict me, I will sue you under the federal Fair Housing laws that say you must grant me a reasonable accommodation [i.e. let me toke on the premises] because I have a "disability." Discussion. Clearly, this is a very complicated issue on several levels. Marijuana is a controlled substance under Federal Law, but under Oregon law, its use and cultivation in limited amounts are lawful with a medical marijuana card. The Oregon laws cover such things as grow-site registration; medical uses for marijuana; issuance of an identification card; and limitations on a cardholder's immunity from criminal laws involving marijuana. For those interested, the specific statutes should be consulted here. Based upon recent news reports, it appears that, subject to certain exceptions, there will be no effort by the federal Department of Justice to seek out and charge violators of the Controlled Substances Act in those states where the medical or recreational use of marijuana are legal. The Conundrum. In short, it appears that when it comes to enforcement of their rules and regulations, Oregon landlords are on their own; neither the feds, nor the state, will go after persons with lawfully issued medical marijuana cards. Furthermore, if a tenant has a valid card, then arguably he or she has some medical condition that has authorized its issuance. Is the landlord obligated under the Fair Housing laws to make a "reasonable accommodation" for their medical condition, and permit the tenant to continue their use or grow operation? If properly done, the answer may be "No." Here's why: In January 20, 2011, the U.S. Department of Housing and Urban Development ("HUD") issued a Memorandum, the subject of which was "Medical Use of Marijuana and Reasonable Accommodation in Federal Public and Assisted Housing." While the Memo was limited to federal public and assisted housing, it can be regarded as a helpful - though perhaps not a "final" resource - on the issue. It is very complete and helpful for all landlords. It can be found at this link. Here is what the Memo directs: Public housing agencies '_in states that have enacted laws legalizing the use of medical marijuana must therefore establish a standard and adopt written policy regarding whether or not to allow continued occupancy or assistance for residents who are medical marijuana users. The decision of whether or not to allow continued occupancy or assistance to medical marijuana users is the responsibility of PHAs, not of the Department." Thus, HUD appears to be leaving it up to the state public housing authorities to decide whether the refusal to permit on-premises use of medical marijuana constitutes a fair housing violation. Between the lines, it appears that HUD will not directly investigate such claims, leaving it up to public housing agencies on the state level. While HUD's pronouncement is directed toward "public housing" is would be hard to believe private housing would be treated any differently. Oregon fair housing law is "substantially equivalent" to federal fair housing law. So, generally speaking, on the issue of medical marijuana, as goes the federal law, so goes state law. However, in the 2010 case of Emerald Steel Fabricators, Inc. v. Bureau of Labor and Industries, the Oregon Supreme Court held that employers do not have a legal duty to allow employees to use medical marijuana on the job. This case addressed many unanswered questions on the use of medical marijuana in Oregon, both from an employment and housing perspective. Additionally, a subsequent article [found here] by the Fair Housing Council of Oregon is helpful for landlords from the view of private fair housing enforcement. Thus, it appears that in Oregon, on both the federal and state levels, enforcement agencies are [for the time being at least] taking a laissez-faire approach to the medical marijuana issue. This means that landlords have it within their control, with little fear of a fair housing/reasonable accommodation claim, to enact rules and regulations prohibiting the on-premises use of medical marijuana. However, the proscription should not be retroactive to tenants holding legal medical marijuana cards who have already signed their rental agreements or leases. Oregon Landlord-Tenant Laws. Oregon statutes permit landlords to enforce tenant violations of their rental agreements, rules, and general laws [not just the landlord-tenant laws]. It is my belief that the violation of a no medical marijuana policy would be enforceable on a going forward basis. The policy should not be retroactive - and it should so state. In summary, ORS 90.630 [Termination by Landlord] provides as follow: - After delivery of written notice, a landlord may terminate the rental agreement for cause and take possession in accordance with the state eviction laws [ORS 105.105 to 105.168], unless the tenant cures the violation. - Causes for termination are: _ Material violations of the rental agreement; _ Material violation by the tenant of his/her legal duties under [ORS 90.740]; _ Failure to pay rent. - The landlord's notice to the tenant must: _ Specify the acts and omissions constituting the violation; _ State that the rental agreement will terminate upon a designated date not less than 30 days after delivery of the notice; and _ If the violation may be cured under the law, so state and describe at least one possible remedy to cure it, designating the date by which the cure must occur. - If the violation described in the notice can be cured, and is cured by the designated date, the tenancy will not terminate; - If the tenant does not cure the violation, the rental agreement terminates as provided in the notice. - If the cause of a written notice relates to substantially the same act or omission that constituted a prior violation for which notice was given within the previous six months, the designated termination date must be not less than 20 days after delivery of the notice and no earlier than the designated termination date stated in the previously given notice. The tenant does not have a right to cure this subsequent violation. Miscellaneous Tips. Landlords, read the medical marijuana card! It must valid and current for Oregon. A California card, for example, would not suffice. [See, State v. Berrenger, 2010]. If there is no card, or no current card, the growing [not use] of marijuana may still be a violation of Oregon law. In such cases, issuance of a curable 30-day notice under ORS 90.630 may be appropriate. If other tenants are complaining about the odor [and many do], a landlord may consider looking to the "quiet enjoyment" provisions of the rental agreement, the rules, or the provisions in ORS 90.740(4)(i). Conclusion. Rental management companies and individual landlords in Oregon may wish to institute a written medical marijuana policy in their rules and/or rental agreements, dealing both with use and cultivation. Based upon current federal law, it does not appear to be a fair housing violation to prohibit medical marijuana in the landlord's rental agreement or rules. If such a policy exists, it should include management's right to decline a request for a reasonable accommodation. Remember, besides nonpayment of rent, there are only three ways to terminate a tenancy for cause: - Violation of the rental/lease agreement; - Violation of the rules; and - Violation of Oregon laws. This means that in Oregon, if a tenant engages in the legal use or cultivation of marijuana - i.e. with a valid card - doing so is not a violation of state law. If a landlord seeks to prevent such activity, the answer must then be found, if at all, in the rental agreement or the rules. Without an express prohibition contained in one of these documents, it may be difficult to bring an eviction action for legal marijuana use or cultivation - unless the tenant's conduct violates some other rule or provision in the rental agreement.

We all know that 80% or more of a community homesites must be occupied by at least one 55+ person, and that documented proof of age must be consistently required to qualify for 55+ status under HOPA. Let's not forget that the requirements also mandate the re-survey.

What do the Regulations say? "...The procedures described in paragraph (b) [routinely determining the occupancy of each unit, including the identification of whether at least one occupant of each unit is 55 years of age or older] ... must provide for regular updates, through surveys or other means, of the initial information supplied by the occupants of the housing facility or community. Such updates must take place once every two years ...."

For example, there were objections to the re-survey mandate on the grounds it was too burdensome. HUD stated that owners would not be unduly burdened by the update requirements since the information "will be readily available in the files."

This comment reflects that the survey requirement can be fulfilled by preparation of a summary of names and ages of the homeowners based on existing file information (assuming the files are up to date). One might annotate a rent roll with resident ages and satisfy the requirement. HUD emphasizes that "...the re-survey does not require that all supporting documents be collected again - only that the community confirm that those persons counted as occupying dwellings for purposes of meeting the 80% requirement are, in fact, still in occupancy."

It is also clear that the survey is a "summary" and not required to include underlying documentation (remember the POA must be obtained for approval of tenancy and kept in the resident's file): "[Only the overall survey summary is required to be available for review, not the supporting documentation. The word 'summary' has been added to this section").

Compilation of the "Summary"

In review of the files to compile the required "summary," it is possible that some files may be missing POA (Proof of Age) documentation. Missing POA reflects inconsistent conformance to a required age verification policy. This can be fatal to defending a "55+" status. Yet, there are plausible reasons why POA may be absent. Perhaps a resident's tenancy commenced before the date of enactment of the Fair Housing Amendments Act of 1988 (September 12, 1988): this was the last date to "grandfather" underage residents excluded from the calculation of the 80-20 requirement; perhaps the Xerox copier did not work on the day identification was checked; perhaps the applicant's age was so obvious that documentation was overlooked; perhaps the POA was misplaced. None of these explanations will "wash" with fair housing enforcers. Now is the time for review of this information. Supplementing resident files may bolster a defense of the "55+" status by proving the 80-20 ratio, but cannot substitute for consistent conformance to a policy of seeking POA documentation. HUD's requirements are crystal clear: "The housing facility or community must establish and maintain appropriate policies to require that occupants comply with the age verification procedures required by this section."

Should you seek missing POA information?

Yes. In a large scale review of resident files by fair housing enforcers, the main objective for review of proof of age may be to establish the 80-20 ratio: Proof of age in the file may itself be seen as evidence of adherence to collection of required data: even after-acquired information reflects, at least, compliance with the 2-year survey requirement. Proof of age includes

the following: driver's license (an expired or out-of-state license seems 'ok'), birth certificate, passport, immigration card, military identification, any other state, local, national, or international official documents containing a birth date of "comparable reliability." This may include birth certificates, baptismal or marriage documents, perhaps, and other public records.

What if the tenant refuses to provide proof of age?

New purchaser: Of course, refusal to supply proof of age when applying for tenancy is a basis for denying a tenancy application. The regulations also allow for a declaration from a member of the household over 18 years of age, stating that at least one person in the homesite is at least 55 years of age. This after-acquired information is permissible for the survey, but again does not bolster evidence of conformance to proof of age documentation required for tenancy approval.

HUD provides a skeletal sample of certification. This can also be used as part of the tenancy application alone or better yet as a backup to production of proof of age. The sample reads as follows: "I, (name), am 18 years of age or older and a member of the household that resides at (housing facility or community), (unit number or designation). I hereby certify that I have personal knowledge of the ages of the occupants of this household and that at least one occupant is 55 years of age or older." Actual proof of age should be obtained at the application stage to avoid false reporting - no defense to a failure to achieve the 80-20 ration.

The regs also allow for other proof of age if an existing resident refuses to provide it. HUD states that "[I]f the occupants ... refuse to comply with the age verification procedures, the [management] may, if it has sufficient evidence, consider the unit to be occupied by at least one person 55 years of age or older. Such evidence may include: (1) Government records or documents, such as a local household census; (2) Prior forms or applications; or (3) A statement from an individual who has personal knowledge of the age of the occupants. The individual's statement must set forth the basis for such knowledge and be signed under the penalty of perjury."

Thus, the survey could be supplemented by including a sworn declaration or affidavit by any person with personal knowledge of the age of the resident's age. In past cases where proof of age was critically important, private investigation of public records to obtain that information has been conducted to provide such knowledge. Remember however, that obtaining proof of age "after the fact" shows compliance with the 2-year survey requirement, but does not substitute for a consistent practice of securing the required information at the time of processing the tenancy application.

HUD gives the following example as acceptable: "the owner of a mobile home park where the residents own the coach but rent the land requires a statement of whether at least one occupant is 55 years of age or older before any sublease or new rental." In other words, the qualification procedure can be instituted within the application process itself. HUD states such an example ("All new leases, new purchase agreements, or new applications contain a provision directly above the signatory line for leases, asserting that at least one occupant or the swelling will be 55 years of age or older. In addition the community surveys all current residents for their occupancy status in compliance with the 55 - or-older requirements"). Actual proof of age should always be required with submission of the tenancy application as well.

Conclusion

The continuing survey requirement is mandatory. Whether failure to comply will be fatal to the assertion of "older persons" status is unknown, but this survey requirement is part of the "intent" prong of operating an "older persons" community. In sum, it is time to compile the summary for your park.

(Reprinted with permission from MHI)

Do you operate a 55 & Older Community?

Do you have the necessary MHCO Forms for 55 & Older Communities?

MHCO has the Resources You Need!

If you are one of the many members of MHCO who own and operate a 55 & Older manufactured home community - MHCO has the resources you need to keep that community compliant with current HUD rules.

• Addendum to the Rent/Lease Agreement for Age 55 & Older Communities (MHCO Form 71A)
• 55 & Older Community - Occupation Determination and Age Verification (MHCO Form 71B)
• 55 & Older Community HUD Verification of Occupancy Survey (MHCO Form 71C)

These are excellent tools to use in the effective management of your 55 & Older community. Get the most out of your MHCO membership by purchasing and using MHCO Forms. 

Answers:  One caveat: The answers below are based upon some quick basic research and should not be relied upon as a complete legal answer to a complicated issue. You should verify the information with your own legal counsel.

1. Is it illegal to require an SSN on a rental application?  No, it is not illegal to “require” an SSN on a rental application provided every application requires an SSN. Only requiring SSNs from certain applicants likely would run afoul of Fair Housing Laws if the group requested may be a protected class. The take-away is (as I have said repeatedly in the past) if you are going to require it, you must require it of everyone, regardless of protected class.  You cannot pick and choose who must provide their SSN number. 

2. Is it a violation of the Fair Housing Laws to deny an applicant because they do not have an SSN?  This is a grey area. While it is not explicitly illegal to deny an applicant because they do not possess an SSN, if denials seem to only occur to certain groups of people, it could trigger a Fair Housing complaint. 

The Fair Housing Act prohibits discrimination against certain protected classes, one of which is national origin. The Fair Housing Council of Oregon (FHCO) encourages landlords to consider documentation other than SSNs, if possible:

“It is our agency’s position that the refusal to review alternative documentation when a Social Security Number is not available will have a negative and disparate impact[1]on individuals whose national origin is not the United States, thereby having a disparate impact on that protected class.” 

A disparate impact may arise when negative outcomes affect a particular protected class, even though they are not a product of explicit discriminatory intent. A recent example cited by the FHCO was an apartment complex in Beaverton which prohibited the cooking of curry on the premises. The prohibition was arguably without specific discriminatory intent because it was based on the difficulty of reliably cleaning apartments where curry had been frequently cooked (it was compared to the impact of tobacco smoke). However, because only certain groups of people, mostly Indian, were likely to cook curry with any frequency in their homes, the rule had a discriminatory impact on people of a particular national origin.[2]

FHCO advocates that landlords consider accepting alternate forms of identification (e.g., ITIN) if they, or their screening companies, can obtain similar, reliable information regarding rental risk as they would be able to with an SSN. This may take the form of asking for more assurances from a potential renter, including references to former landlords to show rental history, utility bills to show timely payments, etc. The FHCO also acknowledges that additional screening steps to compensate for a lack of SSN may have an increased cost, and that increased cost may be passed on to the applicant. [Query: But doesn’t that, in itself, create a disparate impact?! ~PCQ]

Although an ITIN cannot be used in place of an SSN for pulling a credit report, however, people with ITINs can build and maintain credit. Credit bureaus may be able to provide a report based on other identifying information (name, date of birth, employment history) however it may not be as accurate as one tied to an SSN, or the credit bureau may not reliably be able to pull together information for a full credit report without the SSN. It appears that methods of pulling a credit report online will not allow an ITIN to be used, but a consumer may write to the credit bureaus and attempt to pull their own credit report with their other identifying information. FHCO admits that at this time tenant screening companies likely cannot gather credit information without an SSN.

In short, currently it is not explicitly illegal to require an SSN for a rental application, nor is it explicitly illegal to deny an applicant because they do not have an SSN. However, a landlord may expose themselves to potential FHA liability if their facially neutral rules end up having an unintended (i.e., “disparate “) impact on a particular identifiable group (i.e., a “protected class”). 

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Oregon’s BOLI states that while you do have the right to select the tenants you want, refusals:

“…to rent cannot be based on a protected class. The protected classes include race/color, religion, sex, physical or mental disability, marital status, national origin, and familial status. All applicants must be given the same rental requirements and judged by the same standards.”[3]

Specifically, regarding Social Security Numbers, the FHCO suggests not outright denying for lack of SSN, but instead saying: “show me what you can” and then seeing if the documentation provided and the information that can be gleaned by the screening company is sufficient to give the landlord enough data to accept or deny an application.

For more information:

• http://fhco.org/index.php/discrimination-in-oregon/protected-classes/national-origin/screening-options

• https://www.multifamilypro.com/playing-the-numbers…a-fair-housing-gamble/

3. Can you use an SSN for identification?  Social Security Cards are commonly used as one of a two-piece identification program. For example, the Oregon State ID and Driver’s License program accepts it as a primary document (provided you also have a document showing your date of birth)[4], along with other forms of identity like Passports and Driver’s Licenses. 

The concern with Social Security Cards is that they do not have enough identifying information to be useful as a single or primary method of ID (e.g., a photo, a date of birth, other data that corroborates that it correctly identifies the holder). If it is one of two pieces of information, that does not appear to be a problem. FHCO provides a list of alternative documents that a prospective renter might produce, and a landlord may consider accepting.