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Answer. There is a critical difference between fixed term leases (i.e. those having a definite commencement date and expiration date) and periodic tenancies (i.e. month-to-month tenancies that continue month after month, and only terminate if the tenant gives not less than 30-days' written notice, or the landlord terminates for cause).

Fixed term tenancies may only be for a term of two years or more. Rent is set in the lease, and (hopefully) the landlord has built into the document a rent increase formula (e.g. a "base" amount plus a percentage increase tied to some recognized index, e.g. the CPI, or Consumer Price Index). Not less than 60 days prior to the expiration of the lease term, the landlord must give written notice of the terms of the new lease (including rent), and may include new rules, etc., so long as they are all consistent with the terms of the leases and rules given to new incoming residents. See, ORS 90.545.

Rent for periodic tenancies, such as month-to-month, can only increase through a 90-day notice, pursuant to ORS 90.600. Note that this statute limits its application to "month to month tenancies", so a landlord with a fixed term tenancy cannot use that statute to increase rent for a fixed term tenancy.[1]

Question No. 2. Can a landlord raise rent in the first year of the lease, or does he/she have to wait a year? Is there a way around the first year limitation on rent increases if the resident is on a lease?

Answer. Section 2 of House Bill 4143 (2016) provides as follows:

(2) If a tenancy is a month-to-month tenancy, the landlord may not increase the rent:

(a) During the first year after the tenancy begins.

(b) At any time after the first year of the tenancy without giving the tenant written notice at least 90 days prior to the effective date of the rent increase.

(3) The notices required under this section must specify:

(a) The amount of the rent increase;

(b) The amount of the new rent; and

(c) The date on which the increase becomes effective.

(4) This section does not apply to tenancies governed by ORS 90.505 to 90.850. (i.e. manufactured housing communities) (Emphasis mine.)

So in regards to your question, the one-year limitation only applies to month-to-month tenancies for homes that are not under the law governing manufactured housing communities, i.e. ORS 90.505 - 90.580.

However, note that RVs are not considered manufactured homes, so if you had them in your community and they were on month-to-month tenancies, you would be subject to the one year limitation on rent increase.

And there is no one-year prohibition against rent increases for homes on leases, either inside or outside manufactured housing communities, because, as noted above, it is assumed a rent increase protocol was already built into the lease at the time it was signed by the landlord and tenant. The state law cannot interfere with that contractually agreed-upon arrangement. So you don't have to figure out a work-around for leases - just build in a good formula to cover the years of the lease term.

Question No. 3. What about rent increases in the Portland metro area? What are the limitations?

Answer. Originally, the Portland rent increase law as it applied to rental homes, apartments, and RVs, contained the one year limitation discussed above. But in 2016, HB 4143 was enacted, which expanded the one-year limitation statewide. So the rent increase law for Portland and the rest of the state is the same with one major exception:

If a rent increase in the city of Portland is 10% or more,[2] the tenant may opt to vacate, and the landlord is required to pay for their relocation assistance. The details are contained in the Portland City Code 30.01.085 (Portland Renter Additional Protections) here.

Question No. 4. Other than leases in the Portland metro area - what are my rights and responsibilities of raising rent in an Oregon manufactured home community.

Answer. There are only two types of tenancies - fixed term (e.g. leases for two or more years) and periodic (e.g. weekly and monthly). As discussed above, the regime for increasing rent for fixed term tenancies is contained in the body of the lease; no statutes or ordinances control.

As for month-to-month tenancies, rent increases are governed by ORS 90.600, which requires not less than 90-days' written notice (plus at least three days for mailing) '_prior to the effective date of the rent increase specifying the amount of the increase, the amount of the new rent and the date on which the increase becomes effective."

Even though the statute does not place any limitations on the frequency or amount of rent increases in manufactured housing communities, there are indirectly some common sense limitations: e.g. what are other parks charging in the area with the same or similar amenities?

Question No. 5. Finally, what about rent increases in RV parks - are the terms the same for RV parks as manufactured home communities?

Answer. As noted above, rent increases for RVs on periodic tenancies, inside or outside of parks, are treated the same as for tenants in rental homes and apartments; the law requires not less than 90 days' written notice, and prohibits increases until after the first year of the tenancy. The big exception is for the city of Portland, in which increases of 10% or more have some rather harsh financial consequences to landlords.

Advance notice of increase requirements or rent increase limitations do not apply if the tenant is on a lease (unless provided in the lease itself), since both parties agreed, in advance, to the rent formula in the written document.

[1] However, notwithstanding the limited application of ORS 90.600, I personally believe that a landlord may (with assistance of competent counsel) include in a lease, a program, not unlike that contained in ORS 90.600, providing that the rent may be increased, say annually, with 90-days' notice, in an amount not to exceed X% of base rent, thus giving the landlord the ability to vary rent increases not tied to an index, but rather to the landlord's business needs.

[2] Be careful here! The percentage increase applies to "Rent" and "Associated Housing Costs" which are defined in the ordinance.

Answer: Oregon law addresses tenant responsibilities in ORS 90.740. Subsection (4)(h) says that except as provided in the rental agreement it is the tenant’s responsibility to “(m)aintain, water and mow or prune any trees, shrubbery or grass on the rented space….” In my opinion, this provision is a good example of how not to draft a statute. Trees are not “mowed” and grass is not “pruned.” However, it is correct that “pruning” of trees [whatever that entails] is a tenant responsibility unless otherwise provided in the rental or lease agreement. As with everything these days, the Internet is replete with discussions and definitions of pruning. One example is found here: http://tinyurl.com/Q-Law-Definitions-pruning. Regardless of your reference source, it is clear that there are many, many, different types of pruning, depending upon the goal sought. You can prune to “teach” a tree or shrub how to grow in a particular fashion; you can prune for appearance; you can prune for maintenance, i.e. the health of the tree or shrub. Lastly, you prune for safety - this is called “hazard pruning.” Putting my “lawyer’s hat” on and returning to my law school roots, I recall a rule of interpretation called “ejusdem generis”. Here is one definition: “(eh-youse-dem generous) v adj. Latin for "of the same kind," used to interpret loosely written statutes. Where a law lists specific classes of persons or things and then refers to them in general, the general statements only apply to the same kind of persons or things specifically listed. Example: if a law refers to automobiles, trucks, tractors, motorcycles and other motor-powered vehicles, "vehicles" would not include airplanes, since the list was of land-based transportation.” http://www.legal-explanations.com/definitions/ejusdem-generis.htm Applying that legal rule to ORS 90.740(4)(h), it could reasonably be argued that the words “maintain, water and mow or prune” are intended to refer to normal and routine landscaping activities. In other words, a tenant’s landscaping responsibility for his or her own space is limited to normal and routine activities. In other words, imposing a statutory duty and financial responsibility of “hazard pruning” on manufactured housing residents was unlikely. ORS 90.730(3) provides that “(f)or purposes of this section, a rented space is considered inhabitable if it substantially lacks: (e) At the time of commencement of the rental agreement, buildings, grounds and appurtenances that are kept in every part safe for normal and reasonably foreseeable uses, clean, sanitary and free from all accumulations of debris, filth, rubbish, garbage, rodents and vermin [underscore mine];” Thus, there is little question that as of the commencement of the tenancy, it is a landlord duty to make sure the community grounds, including the spaces and common areas, are safe for “normal and reasonably foreseeable uses….” Is a 40-foot fir tree “safe” at the commencement of the tenancy? Can it be made safe? If it is made safe, e.g. by hazard trimming, will it stay safe for the entire duration of the tenancy? It seems to me that a community landlord has two choices: 1. Doing nothing, and relying upon a poorly drafted statute for absolute immunity when a giant tree falls, killing an entire family during a windstorm; or 2. Envision the Doomsday Scenario – i.e. assume that such a disaster could occur regardless what a poorly drafted statute says, and that a multi-million wrongful death lawsuit will surely be filed by some aggressive plaintiff’s attorney, arguing to a jury that the landlord owns the ground, owns the trees coming out of the ground, and is simply trying to avoid the financial responsibility to thin and top dangerous trees. So my advice would be the following: (a) If you are in doubt about your legal responsibilities because the law is unclear, and (b) where doing nothing could place lives in danger, it is far better to undertake the financial responsibility of hazard pruning on a regular basis. In short, relying upon ORS 90.740(4)(h) when it comes to trimming and topping potentially dangerous trees, could be a serious and costly mistake.

Question 1: When tenants request an assistance animal, are they required to put a deposit down like everyone else who requests for a pet to be admitted to housing?

Answer 1: No, you can’t charge a deposit for an assistance animal. So don’t charge the deposit until you've made the decision that it's not an assistance animal.

Question 2: If someone has paid a pet deposit and later needs to reclassify their pet as a support animal, must we refund the pet deposit?

Answer 2: Generally, yes. If you decide to approve the animal as an assistance animal, you should refund the deposit.

Question 3: We have verified that a tenant’s Rottweiler is her assistance animal. But Rottweilers are a restricted breed under our property's insurance policy. What should we do?

Answer 3: HUD has told us that if your carrier won't insure you if you allow a Rottweiler on site, and you’re unable to obtain comparable insurance from some other carrier, then that would be a defense to not allowing the Rottweiler. It would not be a defense to not allowing an assistance animal at all, but not allowing that particular breed. The problem is the burden is on you, the housing provider, to show that: (1) your insurance carrier is going to drop you; and (2) you cannot obtain comparable insurance. It's your burden, but it is a potential defense.

Question 4: If a tenant who’s requesting permission for an assistance animal provides verification from a credible source, but it's dated a few years back, is this acceptable? What is the rule for backdated verifications?

Answer 4: There isn't a rule; it's just a reasonableness issue. If the tenant has gotten a new animal, then you should ask the tenant to update the verification letter. If it's the same animal and it's a legitimate letter other than the date, then it’s probably good enough.

Answer: It means that for month-to-month tenancies, you may not convert from a base rent model to a straight pass-through within 12 months following the date you gave a 90-day rent increase notice under ORS 90.600.

The only exception to this rule is if the rent increase is a part of a formula provided in a fixed term rental agreement (i.e. a lease) that had been entered into one year or more before the conversion to a pass-through program.

Second Question: ORS 90.532(2)(a) (Billing methods for utility or service charges; system maintenance; restriction on charging for water) provides:

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(2) A landlord may not use a separately charged pro rata apportionment billing method as described in subsection (1)(b)(C)(ii) of this section:

(a) For garbage collection and disposal, unless the pro rata apportionment is based upon the number and size of the garbage receptacles used by the tenant.

When it states "number and size of garbage receptacles", is it referring only to bins located at each tenant's space, or can we pro-rata based on the larger trash dumpsters like the 4 yard trash dumpsters our community uses?

Answer: The term "garbage receptacles" is found at four places in ORS Chapter 90. In three of them the term stands alone, and arguably could be construed to refer to either cans or dumpsters. However, only in ORS 90.532(2)(a) does the text add, "used by the tenant." That suggests to me that the drafters intended to limit the term in Subsection (2)(a) to the tenant's garbage receptacles, rather than park-owned dumpsters and bins.

2024 Fair Housing Litigation - Cases of Significance - Single Incident Must Be Egregious to Constitute Hostile Environment Harassment

(First in a series of Six Articles)

Why do landlords need a briefing on fair housing cases? The answer to that question is based on four facts:  

Fact 1: The federal Fair Housing Act (FHA) bans landlords and their agents from discriminating against rental applicants and tenants based on race, color, religion, sex, national origin, family status, or disability. 

Fact 2: The FHA and its regulations also spell out things landlords must do to ensure fair and equal housing, such as make reasonable accommodations for persons with disabilities and refrain from discriminatory advertising. 

Fact 3: Like most landlords in Oregon and America, you already know of all of this, and you train your leasing agents and staff to know it, too. 

Fact 4: Despite all of this, individuals, organizations, and government agencies file thousands of fair housing lawsuits against landlords every year. 

That housing discrimination remains a problem in America is a fact that few would deny. But the other disturbing takeaway from these facts is that even landlords who embrace and try diligently to comply with the principles of fair housing law end up as targets for litigation. Of course, many of these discrimination claims are simply unfounded. But there’s more to it than that. 

The problem is that well-meaning landlords may commit discrimination without intending to. Inadvertent discrimination is typically the product of ambiguity and uncertainty in the law. Thus, for example, the FHA requires “reasonable accommodations” for persons with disabilities but doesn’t specifically define what constitutes “reasonable.” While guidelines from the Department of Housing and Urban Development (HUD) help fill in the details, every situation is different. That leaves it for courts and tribunals to decide the issue case-by-case. Result: The only way to know for sure whether a particular requested accommodation is reasonable is to go to court and let the judge or jury decide the issue.

Obviously, that’s not a very practical strategy. The idea of compliance and managing liability risk is to take proactive action to prevent fair housing claims in the first place. But case law can play a vital role in helping you achieve this objective. That’s because the cases illustrate how the general principles of fair housing law play out in actual, real-life situations. So, reviewing court cases involving other landlords can bolster your own compliance efforts. 

HUD receives approximately 30,000 fair housing complaints each year. But there’s a big difference between a complaint and a reported court case. Most of the former get dropped, resolved, or dismissed out of hand. Only a few actually make it to court and get reported. These cases are where the rubber meets the road and, therefore, the focus of our Scorecard. 

The vast majority of cases pose the threshold question of whether a discrimination complaint should even go to trial. More precisely, most Scorecard cases aren’t the results of a trial but a ruling on a landlord’s motion for summary judgment—basically a ruling in favor of the landlord on the law on the basis of the pleadings (or complaint), without a trial. The landlord’s argument: There’s no point in holding a trial because even if everything the complaint alleges is true, we still wouldn’t be guilty of an FHA violation. 

TOP 10 REPORTED DOJ FHA SETTLEMENTS OF 2024

Although they don’t count in our Scorecard, it’s worth noting that the U.S. Department of Justice (DOJ) reported a number of significant FHA settlements in 2024. 

Top 10 FHA Consent Order Settlements Reported by DOJ in 2024 

Settlement

Amount

Case

Alleged FHA Violation(s)

1

$623,000

United States v. Donahue (W.D. Wis.)     

Landlord sexually harassed female tenants by offering to reduce rent in exchange for sex, making unwelcome sexual comments and advances, and evicting or threatening to evict tenants who refused his sexual advances

2

$600,000

United States v. Shambayati, et al. (S.D. Ga.)

Landlord sexually harassed female tenants and prospects by making unwelcome sexual comments and advances, inappropriately touching their bodies, entering their homes without permission, requesting sex in exchange for rent or other benefits, and retaliating against tenants who rejected his advances or complained about harassment

3

$460,000

United States v. Chicopee Housing Authority and Monica Blazic (D. Mass.)

Landlord made discriminatory statements to and about Black and Hispanic tenants, demanded that Spanish-speaking tenants speak English, and dragged its feet on reasonable accommodations, such as transfers to first-floor or elevator-accessible units

4

$300,000

United States v. Butters (D. Colo.)

Property manager sexually harassed a husband and wife and their two minor children

5

$250,000

United States v. Rutherford Tenants Corp., et al. (S.D.N.Y.).  

Co-op apartment building and president of its board of directors denied a disabled tenant’s request for a reasonable accommodation for an assistance animal and retaliated against her for exercising her FHA rights

6

$190,000

United States v. Hussein (E.D. Mich.)

Landlord sexually harassed actual and prospective female tenants

7

$170,000

United States v. Martin (S.D. Ohio)

Landlord sexually harassed actual and prospective female tenants

8

$137,500

United States et al. v. Teruel et al. (N.D. Cal.)

Landlord pressured a couple, who had two babies during their tenancy, to move out of their one-bedroom apartment

9

$112,500

United States v. Kailua Village Condominium Association, et al. (D. Haw.)

Homeowners’ association, board members, property managers, sellers, and selling agents refused to sell a condo unit to a man with paraplegia, subjected him to discriminatory terms and conditions, made discriminatory statements, refused to make reasonable accommodations, refused to permit reasonable modifications, and harassed him

10

$100,000

United States v. Joel Nolen et al. (E.D. Cal.)

Landlord sexually harassed multiple female tenants dating back to at least 2011

KEY LESSONS FROM 2024 FAIR HOUSING CASES (1st in a series of 6)

Lesson #1: Single Incident Must Be Egregious to Constitute Hostile Environment Harassment

In recent years, failure to make reasonable accommodations and family status discrimination have been the most commonly asserted FHA claims against landlords. This year, though, the most common allegation was landlord harassment and retaliation, figuring in over 10 percent of the Scorecard cases. In addition, six of the DOJ’s 10 biggest reported FHA settlements of 2024 involved allegations of harassment (see the table on p. above). 

Most of the harassment cases accused the landlord of creating a hostile environment on the basis of a tenant’s race, disability, or other protected characteristic. To prove this allegation, a tenant must show that a landlord’s conduct was “severe or pervasive enough to unreasonably interfere” with the tenancy, such as by forcing the tenant to move out. Although possible, this is tough to prove when the alleged harassment involved a single incident. Thus, in 2024, two different landlords successfully defended against hostile environment harassment charges by demonstrating that the complained of conduct was just an isolated incident that wasn’t severe enough to meet the harassment threshold.

Landlord Wins: A fair housing organization accused an Oklahoma landlord of harassing a disabled tenant, citing a single incident in which the landlord took photographs of the tenant’s apartment while he was moving out. “While tense conversations and being photographed in public areas might not be preferable, they do not rise to the level of unlawful harassment,” the federal court reasoned. Besides, the incident took place after the tenant had already decided to move out and thus didn’t factor into that decision [Metropolitan Fair Hous. Council of Okla., Inc. v. Feiock, 2024 U.S. Dist. LEXIS 140180, 2024 WL 3696458].

Landlord Wins: A 74-year-old Black tenant sued her landlord for racial harassment discrimination after a building security guard falsely accused her of stealing a neighbor’s jewelry and called the police. While acknowledging that this was “a distressing event,” the New York court ruled that the incident wasn’t, by itself, “extraordinarily severe" enough to constitute an “intolerable alteration of the conditions of [the tenant’s] housing environment” [Dickerson v. BPP PCV Owners LLC, 2024 U.S. Dist. LEXIS 59765, 2024 WL 1348497]. 

Compliance Takeaway: In most cases, hostile environment harassment involves a course or pattern of conduct that occurs over time. A single incident of harassment may be enough to create a hostile environment. But it must be extremely egregious to cross the line.

ORS 90.675 is the abandonment law that applies generally to homes located in manufactured housing communities. Today it contains 23 separate subsections, a behemoth in size compared to most statutes. Buried 21 sections down in the subterranean recesses of the statute is that portion of the law dealing with health, safety and welfare issues, in which 45 day letters and 30 response periods could not possibly work. In such situations, time is of the essence. Accordingly, subsection 21 sets forth a fast-track protocol for declaring the abandonment of a home that poses certain risks to others (such as the abandoned shell of a home destroyed by fire). Below is a summary of what this subsection says:

If a governmental agency determines that the condition of the abandoned home constitutes an extreme health or safety hazard under state or local law and the agency determines that the hazard endangers others in the facility and requires quick removal of the property, the landlord may sell or dispose of it by taking the following steps[1]:

• The date by which a tenant, lienholder, personal representative or designated person must contact a landlord to arrange for the disposition of the property shall not be less than 15 days after personal delivery or mailing of the abandonment letter required by ORS 90.675(3);
• The date by which a tenant, lienholder, personal representative or designated person must remove the property must be not less than seven (7) days after the date the tenant, lienholder, personal representative or designated person issues the abandonment letter;
• The contents of the abandonment letter must be in accordance with ORS 90.675(5), except that:
  • The dates and deadlines in the notice must be consistent with the fast-track protocol above;
  • The abandonment letter must state that a governmental agency has determined that the property constitutes an extreme health or safety hazard and must be removed quickly; and
  • The landlord must attach a copy of the agency's determination to the abandonment letter.
  • If the tenant, a lienholder or a personal representative or designated person does not remove the property within the time required under the abandonment letter, the landlord or a buyer at a sale conducted under ORS 90.675(11) must promptly remove the home from the facility.
  • Contrary to ORS 90.675(19), the landlord is not required to enter into a storage agreement with a lienholder, personal representative or designated person.

Thanks, John!

[1] Note: the following steps are exceptions to the rest of ORS 90.675. This means that if there is no exception in this list, the rest of the statute will apply.

Rebekah Near is the owner and CEO of a Tenant and Employment screening company in the Northwest. 

Every day in my office at Orca information, Inc. I overhear my Background Investigators talking on their phones with rental or employment applicants.  Often the conversation is centered around Adverse Action - usually a denial of tenancy or employment, a landlord or employer has taken against them.  What is the first question my Background Investigators ask the applicant who has called in for help from Orca?  “Have you received your Adverse Action letter from the landlord?”  Concernedly, more often than not, the applicants tell us, “No, I have not yet received the Adverse Action letter from my Landlord (or employer).”

Next question for the Applicant asked by my Background Investigator is, “How did you find out you were denied tenancy (or employment)?”  Answer is usually, “The Landlord called me and told me I do not qualify and if I want to know why, call Orca.”  Or, another common answer we hear from an Applicant is, “The Landlord called me and told me I do not qualify because of past evictions.  So, I am calling you to find out why exactly I was denied.” 

A question to you the reader:  Does the above scenario resonate with you?  Do you have written policies in place for your staff specifically for taking Adverse Action against an applicant?  THERE ARE LAWS that clearly define the process of taking Adverse Action.  When those laws are not followed, it opens you up to expensive lawsuits.  I don’t know about you but I vehemently dislike lawsuits. 

For the sake of keeping each article short and sweet, I will write several explaining step by step - how to take Adverse Action towards an Applicant.  This includes a denial of tenancy.  For now, keep in mind that the FIRST step in taking Adverse Action is to find the document your screening company is required to provide.  It is titled, CONSUMER RIGHTS.  Then fill in the lines reflecting reasons why the applicant did not qualify for the rental or manufactured home and get it to them quickly.  Following up with a call or emailing them is great too!  But this CONSUMER RIGHTS letter should be the FIRST INFORMATION THEY RECEIVE ANNOUNCING THEIR (POTENTIAL) DISQUALIFICATION. 

……to be continued

Rebekah Near is the owner and CEO of a Tenant and Employment screening company in the Northwest.  Orca Information, Inc was established in 1993.  Check out our FREE training videos at www.orcainformation.com We take great pride in deep diving into court records, and cross-referencing documents to find possible discrepancies in information applicants provide.  We blend the new information technologies and the old, little-known investigative techniques to discover if an applicant has been “naughty or nice” therefore doing our part to help you protect your assets!  Rebekah Near is not an attorney and the above is not legal advice.  Seek an attorney for legal advice regarding all information and/or forms before utilizing. 

Rebekah Near

800-341-0022

www.Orcainformation.com

rebekahn@orcainfo-com.com

Answer.   I’ll try.  First let’s start with some definitions:

Section 603 of the FCRA defines a “consumer report” as:

“…any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for (a) credit or insurance to be used primarily for personal, family, or household purposes***

Section 605 provides that “…no consumer reporting agency may make any consumer report containing any of the following items of information:

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(3) Paid tax liens which, from date of payment, antedate the report by more than seven years.

(4) Accounts placed for collection or charged to profit and loss which antedate the report by more than seven years

1. Any other adverse item of information, other than records of convictions of crimes[1] which antedates the report by more than seven years (Emphasis added.)

Based upon the preceding text in subsections (3) and (4), I read (5) to mean that 7+ year old criminal convictions are excluded from the list of 7+ year old adverse information that is prohibited to be a consumer report.

So, from a consumer reporting perspective, I do not believe there is any restriction for convictions over seven years old.

The position of HUD is an entirely different matter.  This has nothing to do with consumer reporting; rather it relates to HUD’s views on “disparate impact”.

Disparate impact holds that certain practices in employment, housing, etc., may be considered discriminatory under the Fair Housing Act, if they have a disproportionately "adverse impact" on certain members of a protected class, i.e. those falling into the following groups: Race, color, religion, sex, disability, familial status or national origin.[2] 

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

On April 4, 2016, the U.S Department of Housing and Urban Development (“HUD”) issued its “Office of General Counsel Guidance on Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate-Related Transactions” (hereinafter, the “Memo”). The full text of the 10-page Memo can be found here. Not surprisingly, it follows the June 25, 2015 ruling by the U. S. Supreme Court, in the Texas Dept. of Housing vs. Inclusive Communities case, which upheld the much-debated concept of “disparate impact” under the Fair Housing Act, as amended (the Act”). 

At footnote 43 of the Memo, the following appears:

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

Does this mean that six or seven years is the maximum look-back that landlords can make when screening someone’s criminal background? I submit that in non-violent crimes, this is not an unreasonable review period. But in cases of crimes to the person, and most significantly, rape and child molestation, I agree a seven year period is not enough. However, the Memo is not to be read to say that any conviction over seven years may not be taken into consideration when screen potential tenants. Its purpose is to “…issue guidance, mostly by way of examples and prior case law, in how the use of criminal history during the tenant-screening process, may, and may not, trigger a disparate impact result.”

Here are some tenant screening tips based upon one of my earlier MHCO Q&As:

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

2.Ultimately, landlords should plan on making adjustments in their rules and application process.  

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

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

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

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

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

a.How long ago was the conviction? (A single conviction over 6-7 years old, in most cases should probably not be used as the basis for a denial (excluding registered sex offenders, or those convicted of violent crimes).

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

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

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

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

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

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

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

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

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

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

     (a) A drug-related crime;

     (b) A person crime;

     (c) A sex offense;

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

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

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

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

1. Landlords should not assume that compliance with ORS 90.303 means that a denial of tenancy automatically avoids a disparate impact claim.  Landlords and managers should be extra-cautious in this minefield, since where federal law is more restrictive (i.e. burdensome on landlords), it will likely pre-empt state law.  Thus, compliance with state law, but non-compliance with federal law, can still result in a disparate impact claim under the Fair Housing Act, as amended.

Here are some considerations to keep in mind:

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

• .  Landlords could be forgiven for feeling they are caught on the horns of a dilemma. If they follow Oregon statutes, it may not be enough. And while it may be sufficient to follow federal law, today that requires a “disparate impact” analysis, which, at best, is a shifting and nuanced set of “guidelines” based upon anecdotal information.

Perhaps most unsettling is the fact that today, a landlord’s good faith effort to comply with the tenant application process is not enough. Instead, unintentional discrimination, now known under the more benign title, “disparate impact”, has become a basis for Fair Housing claims. Yet unlike statutes, which can provide distinct guidance, disparate impact is more of a concept than a law, since it ignores one’s intent, and looks instead to the perceived long term consequences of certain actions based upon empirical statistics, academic writings, analysis, surveys, demographics and footnotes. Is this something landlords can or should be expected to fully appreciate and understand when evaluating a person for tenancy? 

[1] It would have helped if a comma had been inserted after “convictions of crimes”.

[2] Note, many local jurisdictions have additional class, including sexual orientation.

[3] It is believed that most screening services do not report criminal information over seven years old.