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Answers to Questions Nos. 1 and 2. Under the Fair Housing Act ("the Act") landlords are required to make reasonable accommodations to the rented facilities and common areas, if so requested by a handicapped tenant or their legal occupant. This law applies to the use of assistance animals.

A "reasonable accommodation" is a reasonable change, exception or adjustment to a rule, policy, practice or service that will enable a handicapped person to have an equal opportunity to use and enjoy the rented facilities and common areas. There must be an identifiable relationship between the requested accommodation and the person's disability. Landlords are not required to make requested accommodations if doing so would impose an undue financial or administrative burden upon them or fundamentally alter the nature of the landlord's operations. In order to address the request, Landlords are entitled to obtain information that is necessary to evaluate it for a reasonable accommodation. With respect to a person, a "handicap" means: (a) one with a physical or mental impairment which substantially limits one or more major life activities; (b) one with a record of such impairment; or (c) one who is regarded as having such an impairment. Juvenile offenders, sex offenders, persons who illegally use controlled substances and those with a disability whose tenancy would constitute a direct threat to others, or result in substantial physical damage to the property of others, are generally not protected under the Act. If the landlord refuses a requested accommodation, the requester is encouraged to have a discussion with the landlord concerning an alternative accommodation. This is a summary only and not intended to constitute legal advice. For more information, landlords, tenants and legal occupants of tenants are encouraged to consult with their attorney or a Fair Housing expert if they have any questions regarding their rights and responsibilities.

Note: MHCO has Form No. 15 which permits residents to make reasonable accommodation requests.

I think my first step (which may have already occurred prior to the rule changes, is determine the extent of the problem for emergency vehicles along the narrow streets. Does a single car slow or restrict access to emergency vehicles? In short, how problematic is it for a single car to be parked along the street? Does it create any danger to the community, its drivers, or the emergency vehicles? Once you have that baseline, you will have a sense about the safety of making a reasonable accommodation by permitted on-street parking.

Secondly, if I were to permit anyone to park on the street (assuming the safety issue is properly vetted), I think I would insist that they have a handicapped parking permit. That way, anyone parking on the street without a permit would be easier to spot. (Although you should consider whether the permit is expired or being abused, or in the name of the car's owner.)

The handicapped caretaker is not your direct responsibility - she was hired by your resident. I do not believe convenience is the litmus test here - it's whether the rule prevents her from performing her tasks, and coming and going to the site. I think the biggest problem, and one you've not mentioned but certainly are thinking, is this could become a slippery slope. The more cars you permit to park on the street, the more others will try the same thing. At this point, I believe I'd take the position that if the parking area can accommodate two cars, then that's where they should park - even if it means shuffling them around, handicapped or not.

I do not believe handicapped caretaker has standing to request a reasonable accommodation, since he/she is not a tenant or occupant of the home. But I have not research this issue; you should verify this with your own attorney.

As for the non-handicapped caretaker, a little walk to and from the guest parking is not the end of the world. "Convenience" for a non-handicapped person is not a basis for a reasonable accommodation under the ADA, Fair Housing law, or common sense.

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

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

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

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

SEXUAL HARASSMENT

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

TIME OUT!

Understanding Harassment Regulations

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

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

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

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

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

TENANT-ON-TENANT HARASSMENT

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

CRIMINAL BACKGROUND CHECKS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

TIME OUT!

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

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

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

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

"Fair Housing Coach" articles are a benefit of MHCO membership.  Sharing, duplication is prohibited.

Answer.Under SB 608 rent increases are limited to 7% plus the September-to-September average change in the CPI, for All Urban Consumers, West Region (All Items), as published by the Bureau of Labor Statistics of the United States Department of Labor in September of the prior calendar year (“the CAP”)

To increase rent on a month-to-month tenancy, the Landlordmust:

• Give 90-days’ advance written notice (MHCO Form 49)

• Increases may not exceed theCAP.

• Note: For manufactured housing communities in the City of Portland,  Ordinance 30.01.085 provides for the payment of Relocation Assistance for tenants when the rent increase is 10% or more.

The writtennotice must state:

• Amount of rentincrease;
• Amount of the new rent (i.e. total of old rent plusincrease);
• Facts supporting the Exemption,[1]if the increase is above the CAP;  and
• The date on which the increase becomes effective.

No later than September 30th of each year, the Oregon Department of Administrative Services (“the Department”) is required to calculate the maximum annual rent increase percentage under theC AP for the following calendar year as seven percent (7.00%) plusthe September annual 12-month average change in the in the CPIas most recently published by the Bureau of Labor Statistics of the United States Department ofLabor. For the calendar year 2021 that figure is 9.2% (i.e. 7.00% + 2.20%).

To your question as to whether the effective date of the rent increase amount is based on when the notice was sentor when it became effective, I view this as largely academic, since the “annual 12-month average change” is based upon a calculation of the percent change relative to the previous July through August. Thus, the maximum rent CAP of 9.20% will apply to the calendar year 2021, beginning on January 1, and will be known 90 days before January 1, 2021. If the notice is hand-delivered, or nailed and mailed on October 1, 2020, it would be both legal when sent, and legal when it became effective.[2] 

If your rent increase was over the correct maximum figure of 9.20%, but failed to set forth the facts supporting your exemption, you would be in violation of the CAP, which could make you liable to the tenant for 3X the monthly rent, plus actual damages, costs and attorney fees. Also, being wrong would invalidate your increase notice.

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.

This is the fourth 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.

In the third part, the meeting with the tenants is held in Clatskanie, OR. The turnout of the tenants was overwhelming to the author, as well as the enthusiasm of those in the Clatskanie PUD board room. The Author ends this day feeling that this purchase will, more than likely, have a good chance to occur.

In this fourth part, the author now awaits hearing from CASA the Association is formed and learning about the steps being taken during the due diligence, fund acquisition and appraisal periods. Soon, the closing date, November 1, will be here.

*****

Now that I'm home, and just spoken with my onsite manager about what occurred at the meeting, unknowingly, I am entering the Michael Collins phase. Who is Michael Collins you ask? The end of part 3 of this series will give you a hint. I will bring the Michael Collins analogy full circle later in this article.

The meeting at the Clatskanie PUD with the tenants was on June 26, a Tuesday. Other than my manager, I get no feedback from anyone at the meeting. It was either that Thursday or Friday that I call the phone number of the Development Director. No answer; so a message is left on the voice mail. The purpose of my call was to get a summary of what occurred after I exited the meeting.

No response to my message. I'm not going to send another message or phone call. Maybe I'm not to know what went on. Maybe there are things in flux where the information that I'm looking for is not solid. I will wait.

On July 5, nine days after the meeting with the tenants, I get an email from First American Title that a Title Report will be sent to me for my review and approval. I am given a gesture of a happy closing from the Escrow Officer. I guess this purchase is going through.

In a sale to a tenant group in order to form a cooperative, all homes must be owned by the occupants. There can be no park owned homes in a cooperative. OK, this is a small part of this process that I wasn't aware of. Not that it is a problem; but my manager lives in one home and another tenant that is on Section 8 assistance lives in another home that I both own. The home that my manager lives in shouldn't be a problem. I can finance that home to her and her husband, change the ownership documents to their names and I will become a lienholder.

The other home may be an issue. How do you sell a home to a person that doesn't have the proverbial pot to pee in"? To sell Riverbend

The nationwide need for affordable housing is a boon to our wider industry. Many factories across the US are operating at capacity, or even adding shifts. In recent years, customers could expect their homes delivered within three or four weeks after ordering; due to current production demands, it's now common to wait six or eight weeks, or even longer.

Financing for buyers of manufactured homes in parks is STILL very difficult and expensive.

The collapse of the manufactured home consumer lending market in the late 1990s and early 2000s resulted in far fewer lenders, and more stringent underwriting standards. As a result, qualifying for a manufactured home loan is a real challenge to the consumers who most need affordable housing.

I just sold a new home in my park and saw firsthand how difficult it is for a buyer. The buyer was a parent who would be the sole borrower, but needed his daughter on title to comply with my park's requirements. This is known as a 'Buy-for' and has for decades been a common scenario for the major lenders who fund home sales in parks; but this particular bank had recently changed its underwriting guidelines and the Buy-for became an issue at the 11th hour, resulting in a two-week delay.

Then, the bank realized it had somehow transposed the borrower's social security number with another application throughout the process, and upon discovering my buyer's credit score was lower than they thought, demanded 35% down payment instead of the 20% they were prequalified on. Another two-week delay. At that point, the buyer bypassed the mortgage broker and started calling the bank directly, pleading and on the verge of a nervous breakdown because he'd passed on other housing options for his daughter on the bank's assurances that this loan was teed up and closing imminently.

The end results:

• A ten-week process from buyer's initial loan application to funding of loan (from one of the largest providers of such loans).
• An appraisal that valued the brand-new Energy Star, option-loaded home at less than 70% of what I paid the factory for it.
• The buyer paid 35% down payment ($17,500) on a $50,000 purchase.
• Closing fees, points and broker's commission were added into the loan balance and amortized.
• The buyer was subjected to stressful false starts and apparently unanchored underwriting standards...
• ... and he's paying 13.5% APR for the privilege of getting the loan!

These types of lending barriers -- combined with the restrictions and liability risk foisted on park owners under the Dodd-Frank act - illustrate the pressures of the market that are suppressing manufactured housing sales, compared to past markets where credit was more accessible.

Though the process was sometimes excruciating for the buyer, he and his daughter (my new resident) are thrilled with the outcome: They own a brand new, warrantied, Energy-Star rated 2 bed/1 bath home with covered front porch, gabled entry, lap siding, 12" eaves, stainless appliances, gas furnace/water heater/range, skylights, upgraded cabinets and carpet, set up in the middle of the hottest real estate market in the nation... and purchased at $72/square foot. See photo at top of page.

Federal Section 8 Vouchers can now be used to purchase manufactured homes

President Obama signed the Housing Opportunity through Modernization Act of 2016 (H.R. 3700) into law on July 29th, 2016. Among other actions, this law authorizes Section 8 housing vouchers to be used toward the full annual cost of purchasing a manufactured home.

As there are more than two million households in the US receiving federal housing assistance through Section 8, this could be a significant boost to the industry, and to low-income residents who desire to be homeowners.

Perhaps this is an early indicator of evolving social attitudes towards manufactured housing, and the benefit we provide to our residents as community owners..?

Sell your park to residents and pay no state capital gains tax

Did you know that Oregon law provides a full state capital gains tax exemption to park owners who sell their communities to a tenant's association, or similar entity? Depending on your individual tax situation, this exemption could save you many thousands of dollars in tax liability upon sale!

ORS 316.792 amended Oregon tax law to authorize the exemption. It reads in part: 'To qualify, the park must have been sold to a tenant's association nonprofit organization, community development corporation, or a housing authority.'

As a mobile home park real estate broker, I often work with CASA (Community Assistance and Shelter Association), a nonprofit organization that assists park residents in creating tenant's associations to purchase their communities. If you are considering selling your park, there are several advantages to considering a resident purchase through CASA. Call me at 503-653-3887 if you have any questions.

Contact Information:

Multifamily and Mobile Home Park Investing
3215 SE Raymond St.
Portland, OR 97202

Tel: 503-242-0033
Fax: 503-281-4054
Cell: 503-653-3887
tydowning@westernequities.com

Answer: The general answer is "yes," both the park models and regular RVs can (and should) be treated the same with regard to landlord-tenant laws. However, there are certain regulations that you must follow to ensure that the park models fully qualify as "recreational vehicles" as defined by Oregon law.

First and foremost, a "recreational vehicle" is defined by statute (ORS 446.003 (33)) as a vehicle "with or without motive power that is designed for human occupancy and to be used temporarily for recreational, seasonal or emergency purposes" and as further defined by administrative rule. "Recreational vehicle" is then defined in various rules as (1) being identified as an RV by the manufacturer, and (2) not exceeding 400 square feet in the setup mode, including all tip-outs, slide-outs, expandable rooms, and other horizontal projections.

However, this does not mean that park models cannot be equipped with various accessory structures like decks, steps, porches, roof overhangs and other similar construction. The guiding rule is that these external structures cannot be supported by the RV itself and cannot be enclosed with walls, glass or other solid materials if that would exceed the maximum allowed gross floor area of the RV.

While there are other construction exceptions as well (basements, lofts, certain bay windows, freestanding cabanas, etc.), you should consult with a knowledgeable expert to carefully comply with these regulations. The primary Oregon Administrative Rules can be found at OAR 918-525 and 918-530, which are administered by the Oregon Department of Consumer and Business Services, Building Codes Division.

Assuming you meet the park model regulations, you can use the same rental agreement that you use with regular RV tenants. In many cases, MHCO Form 80 (RV Space Rental Agreement) will work just fine. In other cases, you may want to use a form specifically designed for your park - just make sure that it contains all of the required information, such as how accessory buildings and structures will be dealt with at the end of the tenancy.

In any event, an RV tenancy (unlike a manufactured home tenancy) can be terminated with a no-cause notice if the tenancy is month to month. If the tenant has been in the park less than a year, the no-cause notice period can be 30 days. After the first year of tenancy, the notice period must be at least 60 days. While you would certainly hope not to need to evict a park model tenant, since they technically live in "recreational vehicles," the law gives you that option as a landlord.

By Dianne Lugo

Salem Statesman Journal - February 11, 2025

• The bill that would cap rent increases for manufactured home parks and marinas to the annual inflation rate.
• Proponents of the bill say it would protect residents, many of whom are on fixed incomes, from exorbitant rent increases.
• Opponents, including park owners, argue the bill would lead to closures and sales to large corporations, exacerbating the housing crisis.

Supporters of proposed legislation that would limit rent increases in manufactured home parks and marinas say it would protect existing affordable housing, but opponents fear the bill would force the closure of smaller parks or selling to large conglomerates.

House Bill 3054 would cap allowable rent increases for tenants in manufactured home parks and marinas to annual inflation rates.

"It addresses an alarming trend that we are seeing in manufactured housing communities across our state which is the skyrocketing costs for tenants" who predominantly are on fixed incomes and relying on Social Security, said House Majority Leader Rep. Ben Bowman, D-Tigard.

Multifamily NW, an association of members managing nearly 300,000 units, also wrote testimony opposing the bill, saying rent control poliies have created uncertainty in the state.

"We all know that Oregon is facing a severe housing shortage, and it is abundantly clear that our approach to this issue is not working," wrote Zach Lindahl with Multifamily NW. "Our focus should be on policies that encourage investment and increase supply, not those that further constrain the market."

What Oregon House Bill 3054 would do

HB 3054 would impact a specific subsection of tenants: owners of manufactured homes who rent the land within a park or marina. If a person rents a home within a park, the law won’t apply. Recreational vehicles, apartments or mobile homes outside parks or marinas would not be covered by the law.

“We’re trying to provide a little more transparency, predictability around what the costs of staying in that park will be for people,” said Rep. Pam Marsh, D-Ashland, a chief sponsor of the bill and chair of the House Committee on Housing and Homelessness.

According to testimony from the Oregon Law Center during a packed public hearing on Feb. 3, there are about 1,000 mobile home parks representing 62,000 spaces in the state. There are many of those parks in Marsh’s district in southern Jackson County.

The bill also removes some of what landlords can require before the sale of a manufactured home at parks or marinas. Rental increases for this subsection of tenants would be capped at the Consumer Price Index, a measure of inflation. The CPI calculation in 2024 was 3.2%, according to Oregon's Office of Economic Analysis.

Landlords would be unable to raise rent above 10% of what a selling tenant was paying if they sold a manufactured home that would remain in a rented space.

The bill would prohibit landlords from requiring that a selling tenant, prospective buyer, or buyer agree to an inspection of the inside of a home as a condition to approve the sale or new tenancy. HB 3054 also would bar landlords from requiring aesthetic or cosmetic improvements from prospective tenants.

Supporters cite fear, affordability in Oregon

Nearly 250 pieces of written testimony were submitted in support of the bill.

Bowman said he and other lawmakers hosted a constituent event at a mobile home park in his district that more than 100 people attended. The theme that became impossible to miss, he said, was that the status quo is not sustainable.

"These folks are facing egregious hikes to their rent year over year and it is pushing them to the brink," Bowman said. He said tenants in the mobile home park saw an 8.9% rent increase in 2022, a 10.3% increase in 2023, an 8.7% increase in 2024 and face a 9% increase this year.

The Oregon State Tenants Association submitted a report with a survey of nearly 500 tenants. According to the report, the average annual rent increase was nearly 7%. Average rent prices are projected to surpass Social Security benefits by 75% within 10 years and 100% within 15 years, wrote Rochelle Love Elder, vice president of the Oregon State Tenants Association.

Many of the tenants who would be impacted were too afraid of retaliation to submit testimony or even take a flyer, Elder told lawmakers. Most residents currently pay $865 a month in lot rent. Scheduled rent increases in 2025 will bring most residents' lot rent to $951, she said.

"A lot of them are feeling like cash cows," Elder said.

Elder described the bill as a solution to keep 62,000 people in their homes.

Opponents say bill would force closures, sale of manufactured home parks

Opponents of HB3054 said the bill would do the opposite of what it intends, forcing the closure of smaller parks or sales to large conglomerates. Nearly 100 pieces of submitted testimony opposed the bill.

"It is an extreme proposal that hits owners with a one-two punch," said Bill Miner, a lawyer representing Manufactured Housing Communities of Oregon.

The organization represents 750 manufactured homes and marina facilities with 42,000 spaces. According to Miner, the bill relies on faulty assumptions.

"This bill is a solution in search of a problem," he told the Statesman Journal.

A survey from 100 of their owners found the average annual rent increase from 2019 and 2024 was 5.39%. Miner told lawmakers that in the last month, he had received five calls from landlords representing more than 5,000 spaces about the process of closing their parks should the current bill pass.

Miner described the proposal as "an industry killing type of bill."

Answer.  Let’s start at the commencement of the tenancy. Rent may not be increased during first year of the tenancy. After the first year, rent increases are limited to an amount no greater than 7% plus the change in CPI (“Rent Cap”) over the prior rent.[1]  

Let me answer your questions in my hypothetical, assuming that you have month-to-month tenancies in place. Neither ORS 90.600 nor SB 608 place a limit on the number of rent increase notices you can issue during a 12-month period; the limitation under SB 608 relates solely to the amount of the increases.[2]

The law does not specifically address how one calculates the 12-month period when there are multiple increases, but logically, it seems you would start from the date of commencement of the tenancy,[3] and measure 12 months hence. So if the tenancy officially began on February 1, 2018, then February 1, 2019 would be the first anniversary date, and the time at which you could have a rent increase. 

So, if you wanted to increase rent on February 1, 2019, you would need to have issued a written  rent increase notice no later than October 30, 2018, giving you a full 93 days prior to February 1, 2019 (assuming the notice was mailed). 

The amount of the rent increase levied on February 1, 2019 would control how much more you can increase rent during the February 1, 2019 – February 1, 2020 period. If you levied three increases during this period, with proper written notices, they could not, in totality, be more than the Rent Cap. 

So assuming the annual change in CPI was 2.00%, the maximum sum of the increases cannot be more than 9.00% (7.00% + 2.00%) over the first year’s rent. If monthly space rent during the first year was $500, rent during the second year of the tenancy could not exceed 1.09% X $500, or $545.00 – regardless of how many notices you issued in getting there.

The amount of the first increase would dictate the amount of increase in notices #2 and #3. The totality of the increases during the February 1, 2019 – February 1, 2020 period may not exceed $45.00.[4]

Answer. This is a good question, but one that requires an understanding of several different issues.

You will notice that Form 47 for maintenance and clean up does not attempt to terminate the tenancy. It is merely a notice, or reminder. You may issue it as frequently as necessary, and even though you are aware of the default, you may continue to accept rent without it constituting a waiver to later issue a curable 30-day notice of termination for the same non-compliance.

Oregon landlord-tenant law expressly allows a landlord to accept rent after becoming aware of certain violations. See, ORS 90.412(4)(d). In summary, they include:

1. Disrepair or deterioration of the manufactured dwelling; and
2. A failure to maintain the rented space.

And ORS 90.412(5)(a) provides that for "ongoing violations" (e.g. failure to maintain the space or failure to repair the home), a landlord's written warning notice (e.g. Form 47), remains effective for 12 months and may be renewed with a new warning notice before the end of the 12 months. This has the effect of preserving the landlord's right to take action at some time in the future, while accepting rent during the interim. Thus, Form 47 is a less aggressive version of a 30-day notice of termination of tenancy under ORS 90.630 (for space maintenance issues), or ORS 90.632 (for repairs to the exterior of the home).

To reiterate: If the violation relates to the space, and the resident has consistently refused to clean it up, Form No. 47 is appropriate. The resident must do so within 30 days, or the tenancy will automatically terminate; if the violation relates to the home, and the resident has refused to perform the necessary repair, Form No. 55 is appropriate. This form is similar to the 30-day notice for space maintenance, but provides additional time for compliance depending on the nature of the repair, e.g. painting, which may not be feasible during the winter months.

When is Form 47 appropriate? In almost all instances when the violation is not something you want to immediately terminate the tenancy for, this is the better choice. If it becomes necessary to issue a curable 30-day notice of termination under ORS 90.630 for a failure to maintain the space (MHCO Form 43), or a curable 30-day notice of termination for damage or deterioration to the home (MHCO From 55) under ORS 90.632, you want to have one or more (preferably more) MHCO Form 47s in the resident's file, so it shows that you tried to work with the resident but they ignored you.

Remember, judges don't like terminating tenancies in manufactured housing communities, as it essentially forces the homeowner to vacate and sell their home (since the cost or ability to relocate it may be problematic based upon a lack of financial resources or the home's age).

Also, when the resident is elderly and on a fixed income, most landlords and managers would prefer not to terminate his or her tenancy based upon, say, the condition of the home, preferring instead to wait until it is sold or inherited by a family member.

Lastly, think of it this way: Once you issue a 30-day notice to terminate a tenancy, what are you going to do if the resident ignores you? You really have no choice but to proceed with eviction. And until you do so, you cannot accept rent from the tenant beyond the last day of the termination period. So when issuing a 30-day notice of termination, you are drawing a line in the sand, and your options become more limited. Again, would you not rather be in court on a notice of termination after having given the tenant three form 47s that were ignored? That way the judge knows that you tried to work with the resident, and that he or she brought the termination upon themselves.

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