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Answer. Yes and no. ORS 90.510(4) provides that all rental agreements must contain certain provisions, and that unless the law allows otherwise, they may not be unilaterally amended without the consent of both parties. Subsection 90.510(5) sets forth the contents of the rental agreement, and subsection (5)(i) provides that it must describe:

"(a)ny conditions the landlord applies in approving a purchaser of a manufactured dwelling or floating home as a tenant in the event the tenant elects to sell the home. Those conditions must be in conformance with state and federal law and may include, but are not limited to, conditions as to pets, number of occupants and screening or admission criteria... ." (Emphasis added.)

ORS 90.680(10)(a) provides that if a landlord receives an application for tenancy from a prospective purchaser "

The landlord shall accept or reject the prospective purchaser's application within seven days following the day the landlord receives a complete and accurate written application. An application is not complete until the prospective purchaser pays any required applicant screening charge and provides the landlord with all information and documentation, including any financial data and references, required by the landlord pursuant to ORS 90.510 (5)(i). (Emphasis added.)

ORS 90.680(10)(c provides that if a landlord receives an application for tenancy from a prospective purchaser:

(c) The landlord may not unreasonably reject a prospective purchaser as a tenant. Reasonable cause for rejection includes, but is not limited to, failure of the prospective purchaser to meet the landlord's conditions for approval as provided in ORS 90.510 (5)(i) or failure of the prospective purchaser's references to respond to the landlord's timely request for verification within the time allowed for acceptance or rejection under paragraph (a) of this subsection. (Emphasis added.)

ORS 90.10(40) defines "Screening or admission criteria" to mean:

'_a written statement of any factors a landlord considers in deciding whether to accept or reject an applicant and any qualifications required for acceptance. "Screening or admission criteria" includes, but is not limited to, the rental history, character references, public records, criminal records, credit reports, credit references and incomes or resources of the applicant."

Based upon the above, I believe that since the rental agreement may not be unilaterally modified, you are safer having all of your screening criteria in that document, than putting them elsewhere.

If there are other issues, e.g. with the condition of the home, when you learn that it is going to be sold on-site, you can issue a repair notice under ORS 90.620. That statute is quite useful in these situations. It provides that you can give the resident a 30-day notice of termination based upon repair or deterioration issues. Depending on the degree of repair work necessary, the resident can request additional time.

While it is probably true that the resident may not want to do the work, if and when a purchaser is found, you may give that notice to the purchaser. Putting the home up for sale will not extend the compliance period. Thus, in giving the notice to the prospective purchaser, the issue becomes one of negotiation between seller and buyer. If they reach agreement (which will likely include some price concessions), if the work cannot be completed before the pending transaction closes, you can include completion deadline in the new rental agreement. The new purchaser cannot take possession without first signing the rental agreement and committing to a completion date.

Does all this mean that you cannot or should not develop a resale compliance form for your community? No. But to be forewarned is to be forearmed. In other words, an existing resident could push back if they did not like the provisions, and they might win that argument. The work-around, is that you should make sure your rental agreement contains a good set of screening criteria. MHCO's is very complete. And if the home is in need of repair, you can always issue a 90.632 notice, and secure compliance either from the existing resident, or their prospective purchaser. Since you can make this a condition of acceptance of the prospective purchaser, and it will be written into the new rental agreement, I submit that you will be holding the better hand.

Screening Criteria

The manufactured housing section of Oregon's landlord-tenant law provides that "Any conditions the landlord applies in approving a purchaser... as a tenant in the event the tenant elects to sell the home" should be disclosed in the rental or lease agreement."[1] Although those conditions must be in conformance with state and federal laws, there are no limitations or restrictions as to what may be placed in the rental or lease agreement.

MHCO's rental and lease agreement forms[2] contain a number of criteria that landlords may impose, such as: (a) prior rental references; (b) unsatisfactory credit history or no credit history; (c) character references; (d) criminal history; (e) insufficient income to reasonably meet the monthly space rent and other expense obligations imposed by the rental or lease agreement; (f) the presence, number and size of pets; (g) age verification criteria if the park is a 55+ facility; (h) evidence of falsified or misleading material information; (i) refusal to sign a written lease or rental agreement; (j) additional occupants; and (k) adverse public record information.

Although there may be other criteria that landlords may wish to use when deciding whether to accept an applicant as a tenant, the above list is very comprehensive, and should be sufficient in imposing adequate guidelines when a tenant wishes to sell their home on site. MHCO additionally has an application form which solicits this and other information from prospective tenants.

Landlords and managers should become familiar with the criteria imposed in their rental agreements and rental application forms. Additionally, they should not rely upon the application information submitted to them without a thorough background check that provides the necessary verification. Although Oregon law imposes a 7-day period within which landlords have to respond to a submitted application, it does not prohibit landlords from imposing a longer period so long as the applicant agrees. Additionally, Oregon law expressly states that the 7-day period does not commence if the application is incomplete or inaccurate. Accordingly, landlords and managers would be wise to immediately return any submitted application if it is incomplete - and upon discovering that the prospective tenant/purchaser provided inaccurate information, the application should also be returned. Accepting an incomplete application or continuing with the process after discovering that the applicant has provided bad information can result in an argument by the existing tenant or the new applicant that the landlord is intentionally delaying the process.

It is also important to note that Oregon law permits the '_landlord and the prospective purchaser (to) agree to a longer time period for the landlord to evaluate the prospective purchaser's application or to allow the prospective purchaser to address any failure to meet the landlord's screening or admission criteria." Thus, as noted on the MHCO Application form, there is a place for the landlord to insert a period longer than the statutory seven day period. If the landlord suspects any delay, either on the applicant's part or his own part, a longer period should be inserted. If the applicant rejects this extension, then the landlord can decide whether he wants to proceed to process the application at all.

Note: If a tenant has not previously given the landlord the 10 days' advance notice of intent to sell as required in ORS 90.680(4) (a), the landlord's seven day response time is extended to 10 days. But remember, in no instances does the landlord have to receipt and process an inaccurate or incomplete application. It is better not to accept a defective application - or return it immediately upon finding that it is inaccurate or incomplete, than continuing to process it.

If a landlord requires a prospective purchaser to submit an application for occupancy at the time that the landlord gives the prospective purchaser the application the landlord shall also give the prospective purchaser copies of the statement of policy, the rental agreement and the facility rules and regulations, including any conditions imposed on a subsequent sale. It is important to remember that the terms of these park document given to the prospective tenant need not be the same as those in the existing (i.e. selling) tenant's documents.[3]

Park Documents.

Landlords and managers should always remember that when they change one of the park documents, they may have to change others. This is because of two risks: (a) The failure to incorporate a change in the lease, say, into the Statement of Policy, and (b) An inconsistency between one or more of the park documents, such as the rental agreement and the rules. Rules can generally be changed in the middle of a tenancy, but rental agreements cannot. So landlords should remember to make sure their documents are all internally consistent.

Fair Housing Laws.

The state and federal fair housing laws are essentially - but not completely - the same. Landlords and managers should familiarize themselves with any special ordinances found in their city or county laws. However, Oregon law prohibits any form of discrimination in the sale or rental of housing when directed at the following protected classes: '_race, color, religion, sex, sexual orientation, national origin, marital status, familial status or source of income."[4] The easiest, best, and safest way to deal with the risk of a discrimination claim is to make all screening criteria facially neutral. Do not have rules which - even unintentionally - could have a negative impact on a member of a protected class.

In Oregon, most claims of discrimination relate to familial status. Examples range from managers encouraging families to purchase and reside in one particular area of the community (where there are more children), to making off-hand comments to applicants (e.g. "there would be very few children for your kids to play with here") that may be construed as indicating a desire not to rent to people with children. For this reason, landlords and managers should strive to apply their screening criteria neutrally regardless of the applicant's membership in a protected class.

Additionally, caution should be exercised in answering questions over the phone, since federal and state "testers" have been known to test parks by making multiple phone calls asking various loaded questions, such as "Is this a good place to raise my children?" If the community is a family park, the best response to open-ended telephone inquiries is to tell the caller that it is a family park, open to all, and that they are welcome to come in and pick up an application for processing.

One of the biggest areas of concern for landlords and managers today involve issues of immigration status. At the risk of minimizing the problem, there is one basic rule that landlords and managers should always remember when screening applicants. While it is not a "silver bullet," it should help avoid the vast majority of issues regarding immigration status. Never treat any single applicant differently from another. This means that landlords should not automatically "suspect" that certain persons are illegally in this country and then impose more rigorous screening criteria on them alone. It is best not to ask about immigration status.[5] If the applicant passes the same screening criteria imposed upon others, and all of the information in their application checks out, you should accept the current applicant, regardless of whether you have suspicions about their immigration status. One of the frequently asked questions is whether a landlord may insist that applicants provide their social security number. While this is not automatically illegal, it can be when applied to some applicants and not others. Consistency is the name of the game. Do not request verification in some cases and not others. Do not accept some tenants who fail to provide the number, but accept others (who are not obviously immigrants) without also providing such proof.

Another area of concern is occupancy limits or extra occupancy charges.[6] This is somewhat of a grey area because Oregon law currently permits a two person per bedroom rule - assuming that it is expressly listed as part of the park's screening criteria and uniformly applied. However, the problem is that federal law contains no specific occupancy limits. This means that, in theory, one could be in compliance with state law, while violating federal law. For example, if a family consisted of two adults and three children who owned a 2-bedroom home, a "2-persons per bedroom" requirement would mean that they could not move into the park. But if the third child was an infant who slept in the parents' room, one may ask whether this standard is reasonable, even though it complies with Oregon law. At the risk of violating federal law, which imposes no such occupancy limits, the better approach might be to avoid the "slippery slope" problem entirely, by not creating occupancy limits.[7]

Perhaps the most difficult of screening criteria issues is in the area of assistance animals. Since handicap is a protected class, this means that if one could establish a legitimate need for an assistance animal they could not be prevented from having one - even though the park might have a one-pet policy and this might be their second pet. This could be so even though the animal was not trained or certified in providing assistance. MHCO has Form 15 that may be given to tenants applying for a "reasonable accommodation" which is the technical term used when an allegedly handicapped person requests relief from strict application of a rule that interferes with their handicapped. [8] As most landlords and managers know, the handicap protections can be severely stretched. There are many reasons for this, including, among other things, the handicap may be allegedly psychological, and the tenant has nothing more than a note from a doctor - not a treating psychologist or psychiatrist.

The other difficult issue is that assistant animals are not technically "pets" and therefore are not subject to the requirement that the Pet Agreement be completed. Ultimately it comes down to a rule of reason and proof. Does it appear that the person requesting the accommodation is legitimately handicapped? Do they have a known history of the handicap - that is, has it ever come up before? Does it appear that the claim of a handicap is new, and possibly raised as a pretext, say to circumvent a one-pet policy?

Ultimately, the issue comes down to public safety in the community. For example, if the tenant wanted to have a pit bull (in violation of a dangerous breed prohibition) or a bull-mastiff (in violation of a size restriction), the landlord should ask which battle he or she wants to fight? If the tenant isn't credible, has a history of skirting the rules on this or other issues, it might make sense to refuse and let them take the next step. If they bring the animal into the park in light of the denial, you will have a choice; either do nothing or send out a notice of violation which would require removal of the animal. The risk in allowing dangerous or oversized breed into the park is that it may harm someone, and then the landlord will have to defend a lawsuit for failing to enforce their own rules. Additionally, in consenting, the precedent has been set, now permitting such animals based upon a tenant's assertion the need it for assistance. Remember, "reasonable accommodations" need only be "reasonable." Dogs with vicious propensities or who pose danger to children because of their size, are not the only type of assistance animals available.

Marijuana cards raise the same issue, although perhaps even worse, since the cards seem to be freely given to almost anyone. In some cases, however, this too can be dealt with on another level. If the persons with medical marijuana cards have an inordinate amount of traffic at their home throughout the day and night, perhaps the issue is one for the police, since it is still illegal to sell or distribute marijuana, medical or otherwise. If they are dealing in the illegal drug, careful (documented) scrutiny of these comings and goings might prove useful.

Miscellaneous Screening and Application Issues

• Occasionally, tenants apply for occupancy even though they cannot afford to purchase the home on their own, and perhaps would not qualify under the financial criteria imposed for acceptance into the park. However, they may have a parent or other person willing to assist in the purchase and willing to guarantee the applicant's performance. There is nothing wrong with this approach, assuming that the guarantor passes all of the financial criteria the park would impose. First, remember that the guarantor will not be living in the home - they may have their own housing requirements that impose financial limitations on them. If the tenant defaults, can the guarantor actually afford to pay the space rent? Under such cases, the financial criteria applied to co-signers should be more rigorous than those imposed on tenant applicants. Secondly, landlords should be sure to have their attorney draft a solid guarantee agreement that gives them the right to seek payment against the guarantor without having to first evict the tenant. Third, before accepting a co-signer, a landlord should ask whether they have a sufficiently significant relationship with the applicant such that they will actually be willing to subsidize the space rent if it is not paid.

• A fundamental problem in the tenant screening process is the denial process. Landlords must be prompt in informing applicants if their application is denied. Obviously, a denial can provoke an angry response. Landlords need to be proactive. MHCO has two forms to address the issue, so that the landlord or manager does not have to engage in any more explanation than that provided in the form. MHCO Form 10, identifies the source of the material or information resulting in the turn down. That is all the landlord is required to do, unless it comes from a credit reporting agency. In that case, MHCO's Form 10A should be given so that applicant has the ability to know which credit company was involved and track down the source of the information.

• It is due to financial issues that many applicants get turned down. Especially today. For that reason, MHCO has developed the "Straight Talk" form, describing manufactured home living and affordability issues. It should be used in all cases, if possible.

• Although we discussed the Statement of Policy ("SOP") above, there are two additional points to be made: (a) Always be sure to obtain a receipt (MHCO Form 7C), since it is proof positive that the resident received the SOP and the Rules and Rental or Lease Agreement. Without the receipt, the tenant can deny receiving it, and the burden of proof to establish delivery is on the landlord. This can be a difficult task unless witnesses were present who can verify delivery. (b) The second item to note is use of the Rent History attachment to the SOP a copy of the Rent History (Form 7A). This permits the tenant to see the monthly base rent for each of the five years preceding the current year of tenancy.

• Perhaps one of the most important (and newest) forms if not used, is the Flood Plain Notice (MHCO Form 6). It notifies those residents whose homes are located in all or part of a 100-year floodplain. This means that landlords and/or their managers, should look at a current FEMA map to determine whether all or a portion of their park is located inside such a plain. If so, those residents whose spaces are in the floodplain should be notified. While technically, being located in a 100-year floodplain means that flood water levels are statistically expected to flood onto the plain once every 100 years, most people realize that over the course of 100 years, there could be three or more such floods or none at all. The MHCO form, in compliance with Oregon statute, suggests to those receiving the notice that they consider obtaining flood insurance. The good news is that once having given this notice, a landlord is not liable for any uninsured water loss suffered by the resident due to a flood; the bad news is that failing to give the notice can subject the landlord to the lesser of two months' rent or the resident's actual damages, whichever is less.

Conclusion

Landlords would have fewer tenant problems if they took more time during the screening process. This means resisting the temptation to fill a space quicker than the approval process actually takes. Unfortunately, the desire to have the rental flow commence quickly sometimes results in the process becoming rushed. And landlords and managers should never allow the applicant to rush them. Nor should they ever permit an applicant to move into a home before the process has been completed and a new rental agreement signed. Lastly, fairness and uniformity in screening will help to avoid the ever-present liability that can occur under the federal and state Fair Housing laws.

[1] Rental Agreement MHCO Form 5A and Lease Agreement Form 5B.

[2] Rental Application MHCO Form 1, and Application Screening Charge Notice and Receipt, MHCO Form 9.

[3] See, ORS 90.680(5)

[4] Source of income would refer to whether the applicant was receiving some form of state or federal assistance, or child support, for example.

[5] While compliance with the law seems like a reasonable area of inquiry, the problem is that managers and landlords don't ask this question of a family from England or Germany. This creates the appearance that questions regarding immigration status are reserved for Latinos or those from other Central American countries. National origin is a constitutionally protected class. As a result, this type of selective screening creates (in legal terms) a "disparate impact" on folks from Mexico and Central America, and can therefore be found to be a violation of the Fair Housing laws.

[6] Occupancy limits are sometimes used as "tools" by landlords to impose restrictions on persons with larger families, and therefore poses a potential violation of the familial status protected status. This has not been a significant problem Oregon.

[7] Generally, the only strong justification for occupancy limits in family parks is where it can be claimed that too many people in a home overtaxes the utility systems. While legitimate in some instances, proving it could be very costly.

[8] However, prudence should be exercised here. You would not ask an obviously blind person to fill out a request for reasonable accommodation when asking for a guide dog.

Screening Criteria

The manufactured housing section of Oregon’s landlord-tenant law provides that “Any conditions the landlord applies in approving a purchaser…as a tenant in the event the tenant elects to sell the home” should be disclosed in the rental or lease agreement.”[1]Although those conditions must be in conformance with state and federal laws, there are no limitations or restrictions as to what may be placed in the rental or lease agreement.

MHCO’s rental and lease agreement forms[2]contain a number of criteria that landlords may impose, such as:  (a) prior rental references; (b) unsatisfactory credit history or no credit history; (c) character references; (d) criminal history; (e) insufficient income to reasonably meet the monthly space rent and other expense obligations imposed by the rental or lease agreement; (f) the presence, number and size of pets; (g) age verification criteria if the park is a 55+ facility; (h) evidence of falsified or misleading material information; (i) refusal to sign a written lease or rental agreement; (j) additional occupants; and (k) adverse public record information.

Although there may be other criteria that landlords may wish to use when deciding whether to accept an applicant as a tenant, the above list is very comprehensive, and should be sufficient in imposing adequate guidelines when a tenant wishes to sell their home on site.  MHCO additionally has an application form which solicits this and other information from prospective tenants.

Landlords and managers should become familiar with the criteria imposed in their rental agreements and rental application forms. Additionally, they should not rely upon the application information submitted to them without a thorough background check that provides the necessary verification.  Although Oregon law imposes a 7-day period within which landlords have to respond to a submitted application, it does notprohibit landlords from imposing a longer period so long as the applicant agrees.  Additionally, Oregon law expressly states that the 7-day period does not commence if the application is incomplete or inaccurate.  Accordingly, landlords and managers would be wise to immediately return any submitted application if it is incomplete – and upon discovering that the prospective tenant/purchaser provided inaccurate information, the application should also be returned.  Accepting an incomplete application or continuing with the process after discovering that the applicant has provided bad information can result in an argument by the existing tenant or the new applicant that the landlord is intentionally delaying the process.

It is also important to note that Oregon law permits the “…landlord and the prospective purchaser (to) agree to a longer time period for the landlord to evaluate the prospective purchaser’s application or to allow the prospective purchaser to address any failure to meet the landlord’s screening or admission criteria.”  Thus, as noted on the MHCO Application form, there is a place for the landlord to insert a period longer than the statutory seven day period.  If the landlord suspects any delay, either on the applicant’s part or his own part, a longer period should be inserted. If the applicant rejects this extension, then the landlord can decide whether he wants to proceed to process the application at all.

Note: If a tenant has not previously given the landlord the 10 days’ advance notice of intent to sell as required in ORS 90.680(4) (a), the landlord’s seven day response time is extended to 10 days. But remember, in no instances does the landlord have to receipt and process an inaccurate or incomplete application.  It is better not to accept a defective application – or return it immediately upon finding that it is inaccurate or incomplete, than continuing to process it. 

If a landlord requires a prospective purchaser to submit an application for occupancy at the time that the landlord gives the prospective purchaser the application the landlord shall also give the prospective purchaser copies of the statement of policy, the rental agreement and the facility rules and regulations, including any conditions imposed on a subsequent sale. It is important to remember that the terms of these park document given to the prospective tenant need not be the same as those in the existing (i.e. selling) tenant’s documents.[3]

Park Documents. 

Landlords and managers should always remember that when they change one of the park documents, they may have to change others. This is because of two risks: (a) The failure to incorporate a change in the lease, say, into the Statement of Policy, and (b) An inconsistency between one or more of the park documents, such as the rental agreement and the rules. Rules can generally be changed in the middle of a tenancy, but rental agreements cannot.  So landlords should remember to make sure their documents are all internally consistent.

Fair Housing Laws.

The state and federal fair housing laws are essentially – but not completely – the same.  Landlords and managers should familiarize themselves with any special ordinances found in their city or county laws.  However, Oregon law prohibits any form of discrimination in the sale or rental of housing when directed at the following protected classes: “…race, color, religion, sex, sexual orientation, national origin, marital status, familial status or source of income.”[4]  The easiest, best, and safest way to deal with the risk of a discrimination claim is to make all screening criteria facially neutral.  Do not have rules which – even unintentionally - could have a negative impact on a member of a protected class.  

In Oregon, most claims of discrimination relate to familial status.  Examples range from managers encouraging families to purchase and reside in one particular area of the community (where there are more children), to making off-hand comments to applicants (e.g. “there would be very few children for your kids to play with here”) that may be construed as indicating a desire not to rent to people with children.  For this reason, landlords and managers should strive to apply their screening criteria neutrallyregardless of the applicant’s membership in a protected class.  

Additionally, caution should be exercised in answering questions over the phone, since federal and state “testers” have been known to test parks by making multiple phone calls asking various loaded questions, such as “Is this a good place to raise my children?”  If the community is a family park, the best response to open-ended telephone inquiries is to tell the caller that it is a family park, open to all, and that they are welcome to come in and pick up an application for processing.

One of the biggest areas of concern for landlords and managers today involve issues of immigration status.  At the risk of minimizing the problem, there is one basic rule that landlords and managers should always remember when screening applicants. While it is not a “silver bullet,” it should help avoid the vast majority of issues regarding immigration status.  Never treat any single applicant differently from another.  This means that landlords should not automatically “suspect” that certain persons are illegally in this country and then impose more rigorous screening criteria on them alone.  It is best not to ask about immigration status.[5]  If the applicant passes the same screening criteria imposed upon others, and all of the information in their application checks out, you should accept the current applicant, regardless of whether you have suspicions about their immigration status. One of the frequently asked questions is whether a landlord may insist that applicants provide their social security number.  While this is not automatically illegal, it can be when applied to some applicants and not others.  Consistency is the name of the game.  Do not request verification in some cases and not others.  Do not accept some tenants who fail to provide the number, but accept others (who are not obviously immigrants) without also providing such proof.

Another area of concern is occupancy limits or extra occupancy charges.[6]  This is somewhat of a grey area because Oregon law currently permits a two person per bedroom rule – assuming that it is expressly listed as part of the park’s screening criteria and uniformly applied.  However, the problem is that federal law contains no specific occupancy limits.  This means that, in theory, one could be in compliance with state law, while violating federal law.  For example, if a family consisted of two adults and three children who owned a 2-bedroom home, a "2-persons per bedroom" requirement would mean that they could not move into the park.  But if the third child was an infant who slept in the parents’ room, one may ask whether this standard is reasonable, even though it complies with Oregon law.  At the risk of violating federal law, which imposes no such occupancy limits, the better approach might be to avoid the “slippery slope” problem entirely, by not creating occupancy limits.[7]  

Perhaps the most difficult of screening criteria issues is in the area of assistance animals.  Since handicap is a protected class, this means that if one could establish a legitimate need for an assistance animal they could not be prevented from having one – even though the park might have a one-pet policy and this might be their second pet.  This could be so even though the animal was not trained or certified in providing assistance. MHCO has Form 15 that may be given to tenants applying for a “reasonable accommodation” which is the technical term used when an allegedly handicapped person requests relief from strict application of a rule that interferes with their handicapped. [8]As most landlords and managers know, the handicap protections can be severely stretched.  There are many reasons for this, including, among other things, the handicap may be allegedly psychological, and the tenant has nothing more than a note from a doctor – not a treating psychologist or psychiatrist. 

The other difficult issue is that assistant animals are not technically “pets” and therefore are not subject to the requirement that the Pet Agreement be completed.  Ultimately it comes down to a rule of reason and proof.  Does it appear that the person requesting the accommodation is legitimately handicapped? Do they have a known history of the handicap – that is, has it ever come up before?  Does it appear that the claim of a handicap is new, and possibly raised as a pretext, say to circumvent a one-pet policy?  

Ultimately, the issue comes down to public safety in the community.  For example, if the tenant wanted to have a pit bull (in violation of a dangerous breed prohibition) or a bull-mastiff (in violation of a size restriction), the landlord should ask which battle he or she wants to fight?  If the tenant isn’t credible, has a history of skirting the rules on this or other issues, it might make sense to refuse and let them take the next step.  If they bring the animal into the park in light of the denial, you will have a choice; either do nothing or send out a notice of violation which would require removal of the animal.  The risk in allowing dangerous or oversized breed into the park is that it may harm someone, and then the landlord will have to defend a lawsuit for failing to enforce their own rules.  Additionally, in consenting, the precedent has been set, now permitting such animals based upon a tenant’s assertion the need it for assistance.  Remember, “reasonable accommodations” need only be “reasonable.”  Dogs with vicious propensities or who pose danger to children because of their size, are not the only type of assistance animals available.

Marijuana cards raise the same issue, although perhaps even worse, since the cards seem to be freely given to almost anyone.  In some cases, however, this too can be dealt with on another level. If the persons with medical marijuana cards have an inordinate amount of traffic at their home throughout the day and night, perhaps the issue is one for the police, since it is still illegal to sell or distribute marijuana, medical or otherwise.  If they are dealing in the illegal drug, careful (documented) scrutiny of these comings and goings might prove useful.

Miscellaneous Screening and Application Issues

• Occasionally, tenants apply for occupancy even though they cannot afford to purchase the home on their own, and perhaps would not qualify under the financial criteria imposed for acceptance into the park.  However, they may have a parent or other person willing to assist in the purchase and willing to guarantee the applicant’s performance.  There is nothing wrong with this approach, assuming that the guarantor passes all of the financial criteria the park would impose.  First, remember that the guarantor will not be living in the home – they may have their own housing requirements that impose financial limitations on them.  If the tenant defaults, can the guarantor actuallyaffordto pay the space rent?  Under such cases, the financial criteria applied to co-signers should be more rigorous than those imposed on tenant applicants.  Secondly, landlords should be sure to have their attorney draft a solid guarantee agreement that gives them the right to seek payment against the guarantor without having to first evict the tenant.  Third, before accepting a co-signer, a landlord should ask whether they have a sufficiently significant relationship with the applicant such that they will actually be willing to subsidize the space rent if it is not paid.  

• A fundamental problem in the tenant screening process is the denial process.  Landlords must be prompt in informing applicants if their application is denied. Obviously, a denial can provoke an angry response.  Landlords need to be proactive.  MHCO has two forms to address the issue, so that the landlord or manager does not have to engage in any more explanation than that provided in the form.  MHCO Form 10, identifies the source of the material or information resulting in the turn down.  That is all the landlord is required to do, unless it comes from a credit reporting agency. In that case, MHCO’s Form 10A should be given so that applicant has the ability to know which credit company was involved and track down the source of the information.  

• It is due to financial issues that many applicants get turned down.  Especially today. For that reason, MHCO has developed the “Straight Talk” form, describing manufactured home living and affordability issues.  It should be used in all cases, if possible. 

• Although we discussed the Statement of Policy (“SOP”) above, there are two additional points to be made: (a) Always be sure to obtain a receipt (MHCO Form 7C), since it is proof positive that the resident received the SOP and the Rules and Rental or Lease Agreement.  Without the receipt, the tenant can deny receiving it, and the burden of proof to establish delivery is on the landlord.  This can be a difficult task unless witnesses were present who can verify delivery.  (b) The second item to note is use of the Rent History attachment to the SOP a copy of the Rent History (Form 7A).  This permits the tenant to see the monthly base rent for each of the five years preceding the current year of tenancy.

• Perhaps one of the most important (and newest) forms if not used, is the Flood Plain Notice (MHCO Form 6).  It notifies those residents whose homes are located in all or part of a 100-year floodplain.  This means that landlords and/or their managers, should look at a currentFEMA map to determine whether all or a portion of their park is located inside such a plain.  If so, those residents whose spaces are in the floodplain should be notified.  While technically, being located in a 100-year floodplain means that flood water levels are statistically expected to flood onto the plain once every 100 years, most people realize that over the course of 100 years, there could be three or more such floods or none at all.  The MHCO form, in compliance with Oregon statute, suggests to those receiving the notice that they consider obtaining flood insurance.  The good news is that once having given this notice, a landlord is not liable for any uninsured water loss suffered by the resident due to a flood; the bad news is that failing to give the notice can subject the landlord to the lesser of two months’ rent or the resident’s actual damages, whichever is less.

Conclusion

Landlords would have fewer tenant problems if they took more time during the screening process. This means resisting the temptation to fill a space quicker than the approval process actually takes.  Unfortunately, the desire to have the rental flow commence quickly sometimes results in the process becoming rushed.  And landlords and managers should never allow the applicant to rush them.  Nor should they ever permit an applicant to move into a home before the process has been completed and a new rental agreement signed.  Lastly, fairness and uniformity in screening will help to avoid the ever-present liability that can occur under the federal and state Fair Housing laws.

©Copyright by Phillip C. Querin. No portion may be reproduced without the express written consent of the author.

[1]Rental Agreement MHCO Form 5A and Lease Agreement Form 5B.

[2]Rental Application MHCO Form 1, and Application Screening Charge Notice and Receipt, MHCO Form 9.

[3]See, ORS 90.680(5)

[4]Source of income would refer to whether the applicant was receiving some form of state or federal assistance, or child support, for example.

[5]While compliance with the law seems like a reasonable area of inquiry, the problem is that managers and landlords don’t ask this question of a family from England or Germany.  This creates the appearance that questions regarding immigration status are reserved for Latinos or those from other Central American countries. National origin is a constitutionally protected class.  As a result, this type of selective screening creates (in legal terms) a “disparate impact” on folks from Mexico and Central America, and can therefore be found to be a violation of the Fair Housing laws.

[6]Occupancy limits are sometimes used as “tools” by landlords to impose restrictions on persons with larger families, and therefore poses a potential violation of the familial status protected status.  This has not been a significant problem Oregon.

[7]Generally, the only strong justification for occupancy limits in family parks is where it can be claimed that too many people in a home overtaxes the utility systems.  While legitimate in some instances, proving it could be very costly. 

[8]However, prudence should be exercised here. You would not ask an obviously blind person to fill out a request for reasonable accommodation when asking for a guide dog.

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

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

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

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

WHAT DOES THE LAW SAY?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

7 RULES FOR BEING PREPARED FOR FAIR HOUSING TESTERS

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

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

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

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

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

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

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

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

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

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

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

Rule #3: Watch What You Say in Your Advertising

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

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

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

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

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

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

Rule #4: Ensure Consistency in the Leasing Office

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

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

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

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

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

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

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

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

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

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

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

Rule #5: Provide Fair Housing Training to All Employees

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

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

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

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

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

Rule #6: Shop Your Property

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

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

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

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

Rule #7: Keep Good Records

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

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

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

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

Answer: I assume you are referring to a sale where you carry back the security obligation (as opposed to the buyer paying cash or securing third party financing).[1] In this respect, you are correct, subject to several limitations. MHCO worked extensively with the Oregon Department of Finance and Corporate Securities ("DFCS") and others to develop an exemption to the Oregon law that would permit park owners to engage in the sale of formerly abandoned homes to purchasers for the purpose of a primary residence without having to use a broker (referred to as a "Mortgage Loan Originator" or "MLO" under the new law). Here is a summary of the new exemption law which will be found in ORS 86A.203.

• Here are the rules for those licensed as a manufactured structure dealer under ORS 446.691.
  • They may offer or negotiate the terms of the loan three or fewer times in a 12 month period;
  • They must use a written sale agreement that complies with certain requirements, or with DFCS rules[2].
  • The dealer may not hold more than eight residential mortgage loans without securing a MLO license under ORS 86A.203(1). [Presumably, this means "at one time."]

• Here are the rules for those licensed as a limited manufactured structure dealer under ORS 446.706.
  • They may offer or negotiate terms of the loan five or fewer times in a 12 month period:
  • They must have an ownership interest in a manufactured dwelling park;
  • They must use a written sale agreement that complies with certain requirements, or with DFCS rules.
  • They may not hold more than twelve residential mortgage loans without securing a MLO license under ORS 86A.203(1). [Presumably, this means "at one time."]

Conclusion. I marvel at the complexity of these laws which have been implemented to "protect" consumers from creditors - especially small creditors, such as park owners selling formerly abandoned homes to fill a space and provide affordable housing. If these small transactions caused the credit and housing crisis of 2008 and the ensuing Great Recession, perhaps I could understand. But they didn'. What we're are seeing is a huge net of bureaucratic regulation that has been cast over even the smallest of transactions under the guise of consumer protection.

Going forward, my suggestion is for park owners to decide if: (a) They want to handle these transactions without the use of a MLO (which will add several hundred dollars to each sale) or (b) Go it alone. If the latter, my suggestion is to create the simplest of paper transactions, with a fair market rate of interest, no adjustable rates, no negative amortizations. Balloon payments are permissible. However, there is a limit on this safe-harbor. If you made more than four such carry-back loan transactions in the prior calendar year, an entirely different and more complex set of rules apply, and you should consider using either a MLO or an attorney qualified in such matters.

[1] The Federal SAFE Act and its state counterparts, have interpreted (incorrectly in my opinion) "loans" to include not just funding coming from a third party lender, but also seller-carryback transactions where the seller "carries the paper" and collects the periodic payments.

[2] The statute cited to for compliance, ORS 646A.052, et. seq. is antiquated and inadequate for residential housing today. Presumably, the DFCS will have to create a suitable form through rulemaking.

Good morning.  This has been a very busy week in the Oregon Legislature as we head into the home stretch of the 2016 Oregon Legislative Session.

The Renter Protection" bill (HB 4143) passed out of the Oregon House on Tuesday and is now in the Senate Rules Committee.  It is scheduled for a 'work session' this afternoon and will likely pass on to the full Senate for a vote later this week.  This legislative proposal will have a minimal impact on manufactured home communities in Oregon.  MHCO has worked very hard to keep the angst over the Portland housing crisis away from the manufactured home industry.  By all accounts we have been successful.  This bill also has no rent control.

The 'inclusionary zoning' bill (SB 1533) passed out of the Senate Committee on Tuesday as well.  This bill is the result of some intense bargaining with the final amendments to the bill being drafted and adopted this past Tuesday.  MHCO was very concerned that this is where we would face a rent control challenge.  Our main concern was the elimination of the pre-emption of rent control in ORS 91.225.  The new amendments do not impact our rent control pre-emption.  

There are two other bills addressing affordable housing that will be up for consideration.  The bills encourage government entities to take into account opening up more land for affordable housing and annexing (HB 4079 and SB 1573). 

Here is a link to a recent "Oregonian" article on the passage of the renter protection bill (HB 4143).  Click:

http://www.oregonlive.com/politics/index.ssf/2016/02/house_approves_ren…

Finally

HB 2634 moves the regulation of Recreational Vehicles out of the Manufactured Dwelling/Floating Homes portion of the ORLTA (ORS 90.505 – 90.850) and into the residential dwelling portion (ORS 90.100 – 90.465). ORS 90.505 – 90.850 now only applies to situations where the tenant owns a manufactured home or floating home, rents the space on which the manufactured or floating home is located, and that rented space is located inside a facility (manufactured housing park or marina).

All Recreational Vehicles are now subject to ORS 90.100 – 90.465. The bill begins by defining  “Recreational Vehicle Park” amending ORS 90.100 (38) (Definitions) to reference the existing definition of a recreational vehicle park in ORS 197.492.

ORS 197.492 (3)“Recreational vehicle park”:

(a)  Means a place where two or more recreational vehicles are located within 500 feet of one another on a lot, tract or parcel of land under common ownership and having as its primary purpose:

(A)   The renting of space and related facilities for a charge or fee; or

(B)   The provision of space for free in connection with securing the patronage of a person.

(b) Does not mean:

(A) An area designated only for picnicking or overnight camping; or

(B) A manufactured dwelling park or mobile home park.

The ORLTA only applies to Recreational Vehicles and Recreational Vehicle Parks that are used for full time dwellings, and not those RVs used for camping or vacation purposes. HB 2634 further amends the definition of “Vacation Occupancy” (now ORS 90.100(52)) to exempt certain types of vacation-only rentals from the ORLTA. With regard to RV rentals, “vacation occupancy” is defined as follows:

ORS 90.100(52) “Vacation occupancy” means occupancy in a dwelling unit, not including transient occupancy in a hotel or motel, that: […]

(b) Is for the rental of a space in a recreational vehicle park on which a recreational vehicle owned by the occupant will be located and for which:

(A) The occupant rents the unit for vacation purposes only, not as a principal residence;

(B) The occupant has a principal residence other than at the space;

(C) The period of authorized occupancy does not exceed 90 days;

(D) The recreational vehicle is required to be removed from the park at the end of the occupancy period before a new occupancy may begin; and

(E) A written agreement is signed by the occupant that substantially states: “Your occupancy of this recreational vehicle park is a vacation occupancy and is NOT subject to the Oregon Residential Landlord and Tenant Act (ORS chapter 90).”

The Bill also makes slight changes to ORS 90.425 (Disposition of Personal Property Abandoned by Tenant). Under the ORLTA, when attempting to dispose of an abandoned recreational vehicle, the landlord must provide notice to the tenant. In return, the former-tenant now has 5 days, with personal service, or 8 days with service by first class mail, to contact the landlord and make arrangements for the disposal of the abandoned RV. The prior law required a 45-day notice period.

Additionally, the Bill now allows a landlord to destroy or dispose of a presumably abandoned recreational vehicle if the current market value is determined to be less than $4,000. A landlord may also choose to use the procedure for removing an abandoned motor vehicle under ORS 98.830 to remove an abandoned RV.

The rules outlined above apply only to residential tenancies or vacation occupancy entered into on or after January 1, 2024, the effective date of this law.

By Tiffany Mittal - Multifamily Utility Company

Manufactured Homes and Submetering What is Submetering?

Submetering is the process of installing a water, gas or electric meter on each mobile home after the master utility meters for the mobile home park. The term submeter" is used for any meter installed after the master meter. With submeters installed at every mobile home the association is able to utilize a third party meter reading and billing company to read the meters and produce monthly bills for the selected utilities.

Why Submeter?

One of the largest expenses for a mobile home park is utilities. It is also an expense item that continues to increase over time. There are three major reasons for this:

o Rate Increases - The cost of energy (gas and electric) production and acquiring clean water has outpaced inflation for the past decade.

o Increases in Occupancy - Due to the economic environment more people are living with extended families. Higher occupancy leads to higher utility usage.

o Wasteful Usage - Residents are often less conservative with their utility usage when they are not aware of their individual consumption or do not have an incentive to save.

Studies have shown that once residents become aware of their utility usage