Search

Don’t relax your focus once the holidays are over—religious discrimination claims could arise at any time of year. Fair housing law makes it unlawful to exclude or otherwise discriminate against applicants or residents because of their religion. If you explicitly or implicitly suggest that you have a preference for—or against—members of certain religious groups in the way you advertise, market, or operate your housing community, you could be accused of violating fair housing law.

This month, we’ll review the law and suggest eight rules to follow to help you avoid claims of religious discrimination during the holidays—and all year long. 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 based on a number of characteristics, including religion. Among other things, it’s unlawful to:

• Deny housing to anyone because of his religion;
• Steer or discourage anyone from living in your community because of his religion;
• Impose different terms or conditions because of his religion;
• Harass or retaliate against anyone because of his religion; or
• Make statements—oral or written—that indicate a preference for or against anyone because of his religion.

Taken together, these provisions prohibit communities from treating people differently based on their religious beliefs or practices. For example, you can’t show favoritism toward people who share your religious beliefs—or bias against those of other religious faiths.

Furthermore, you could run afoul of fair housing law by treating people differently simply because they do—or do not—attend religious services or identify with a religious faith. The FHA doesn’t define “religion,” but fair housing experts believe it’s broad enough to prohibit discrimination against individuals who are not affiliated with a particular religion or do not ascribe to particular religious beliefs.

Coach’s Tip: The FHA includes a narrow exemption that allows religious organizations, which own or operate housing for noncommercial purposes, to limit occupancy or give preferential treatment to members of the same religion, as long as membership in the religion is not restricted on account of race, color, or national origin.

FOLLOW 8 RULES FOR AVOIDING

RELIGIOUS DISCRIMINATION CLAIMS

Rule #1: Make Everyone Feel Welcome at Your Community

At the holidays—and all throughout the year—it’s important to make all prospects, applicants, and residents feel welcome, regardless of their religious beliefs or practices.

As communities have become more religiously and culturally diverse, your residents may celebrate a variety of religious holidays. Many celebrate Christmas or Hanukkah, while others may observe religious holidays that may be unfamiliar to you. Some celebrate cultural or spiritual occasions, such as Kwanzaa or the winter solstice, while others don’t celebrate any holidays at all. Regardless of whether or how they celebrate the holidays, all are protected from discrimination under the FHA—and can’t be treated differently because of their beliefs or practices.

Rule #2: Leave Religion Out of the Leasing Process 

Take a close look at your application policies and procedures to ensure that your community doesn’t exclude or otherwise discriminate against applicants based on their religious affiliation or beliefs.

Example: In July 2019, the Justice Department announced a settlement in a fair housing case alleging that a Michigan community discriminated on the basis of religion by prohibiting non-Christians from owning homes at the summer resort community.

In its complaint, the Justice Department alleged that a nonprofit municipal association owned the community’s land and leased lots to members who owned the cottages built on those lots. Specifically, the complaint alleged that from 1986 to 2018, the association’s bylaws required that in order to become a member of the association and thus eligible to own a cottage, an individual must, among other things, be “of Christian persuasion” and obtain a letter of recommendation from the pastor (or designated leader) of the church the individual attends.

Under the settlement, the association agreed to amend its bylaws, articles of association, and membership application materials to eliminate the religious restriction on membership [U.S. v. The Bay View Association of the United Methodist Church, Michigan, July 2019].

Rule #3: Make Sure Advertising and Marketing Practices Don’t Suggest Religious Preference

Check to ensure that your advertising and marketing practices and materials don’t suggest a preference for or against anyone based on her religion.

Under the FHA, it’s unlawful to make, print, or publish any notice, statement, or advertisement that indicates any preference, limitation, or discrimination based on race, color, religion, sex, disability, familial status, or national origin. According to federal regulations, you may not use “words, phrases, photographs, illustrations, symbols or forms which convey that dwellings are available or not available to a particular group of persons because of…religion.” According to HUD, that means that advertisements may not include explicit preferences—such as “Christian community”—or limitations—such as “No Jews.” It’s also unlawful under the FHA to advertise that you prefer only those who are members of an organized religion.

Don’t forget: Fair housing law doesn’t require proof of discriminatory intent to establish liability for making discriminatory statements. Instead, the focus is on whether the statement would suggest an unlawful preference to an “ordinary reader or listener.” Even if you don’t intend to discriminate against applicants or residents based on their religion, you could unintentionally suggest you have such a preference for members of one religion over another. Though unlikely, by itself, to lead to a fair housing complaint, evidence of an implied preference could be used against you if there is other evidence of religious discrimination.

For example, HUD has said that advertisements of descriptions of the housing community, such as “apartment complex with chapel,” or services, such as “kosher meals available,” do not on their face state a preference for persons likely to make use of those facilities and are not violations of the FHA. But that doesn’t mean that you should emphasize religious amenities, such as your community’s proximity to a particular church or other house of worship, according to fair housing experts, who warn that they may suggest a preference for members of that faith. 

HUD observes that in some cases, the name of the housing community—such as the “Roselawn Catholic Home”—or use of a religious symbol—such as a cross—in an advertisement could indicate a religious preference. Nevertheless, HUD says that it won’t be considered a fair housing violation if the ad includes a disclaimer to indicate that the housing community doesn’t discriminate on the basis of race, religion, and other protected characteristics. In most cases, however, fair housing experts caution against use of religious symbols in your advertising or marketing materials unless there are special circumstances such as, for example, when it’s part of a registered trademark or logo.

Rule #4: Aim for Inclusiveness During the Holiday Season

This time of year, many communities put up decorations, send greetings, or host festivities to promote good cheer. There’s nothing wrong with decorations and festivities to mark the holiday season, as long as they don’t appear to be promoting a particular religion or religious holiday. It’s unlawful to express a preference for—or against—anyone based on religion, so celebrating only one religious holiday—to the exclusion of others—could lead to a fair housing problem.

You can’t go wrong with secular messages, such as “Seasons Greetings” or “Happy Holidays,” and seasonal displays featuring lights, evergreens, icicles, and snowflakes. You can even include pictures of Santa Claus and signs that say, “Merry Christmas,” which have been recognized by HUD as secularized terms and symbols that don’t violate fair housing law.

When it comes to decorating common areas, it’s sometimes hard to know where to draw the line between religious and secular and symbols. Our experts warn against putting up nativity scenes, but opinions were mixed with respect to menorahs and Christmas trees. Some experts say that communities should avoid using them and any other decorations with religious connotations when decorating common areas. Others suggest calling it a “Holiday tree” and decorating it with seasonal, nonreligious lights and ornaments. Still others say menorahs and Christmas trees have become secularized—like “Merry Christmas” and Santa Claus—so it’s fine for communities to include them among other holiday decorations with other nonreligious, seasonal themes.

Coach’s Tip: Many communities hold parties and other special events during the holidays. While such events are a great amenity for your residents, make sure that the events are not religious or used to promote a particular holiday. Fair housing experts warn against calling it a Christmas party or playing Christmas carols with religious themes. Instead, keep the celebration neutral by calling it a holiday party or winter celebration and playing music celebrating winter themes. Invite all residents, regardless of their religious affiliations. Make sure residents know all are welcome but avoid any impression that they must attend holiday events.

Rule #5: Allow Residents to Display Religious Decorations Inside Their Units

Most of our fair housing experts warn against allowing residents to decorate lobbies, hallways, and other common areas since it’s up to the community to maintain them in a religiously neutral manner. Inside their units, however, residents should be allowed to display holiday decorations, including personal religious items, as long as they are in keeping with community rules.

It can get more complicated when dealing with holiday decorations on the unit’s front door, and unit interiors that are visible from outside, such as windows, patios, and balconies. As a general rule, communities have the right to enforce rules related to the appearance of those areas, but the rules must apply consistently to religious and secular objects alike. Some communities allow residents to hang religious decorations on their front doors and windows, while others have rules banning decorations of any kind in outdoor areas.

But be careful: Taking a hard line against outside decorations whatsoever may be effective, but it could trigger a complaint that the community is interfering with a resident’s religious rights.

Example: Earlier this year, a court overturned a jury verdict in a dispute between an Idaho couple and a homeowners association involving their Christmas display. The dispute dates back to 2015, when the couple notified the HOA that they intended to buy a home in the subdivision and needed a quick answer about whether the board would oppose use of the property for their Christmas program. The homeowners’ stated reason for hosting the Christmas program was to support various charities and engage in ministry.

In response, the HOA indicated that the program would violate certain community rules and pointed out that some residents were non-Christians or of other faiths. The HOA said it didn’t intend to discourage the couple from becoming part of the community, but it didn’t want to become entwined in expensive litigation to enforce longstanding rules and fill the neighborhood with hundreds of people and possible “undesirables.”

The couple bought the home and in 2015, and in 2016 they hosted the Christmas program, which involved decorating the exterior of the home with 200,000 lights, a nativity scene with a live camel, and characters in costume. Commercial busses were used to transport people to and from the program; the busses were parked in front of their home and adjacent properties. Many other people drove to the event and parked throughout the neighborhood. Hundreds of people attended the program on a nightly basis; in total, thousands attended over each five-day period.

Facing opposition from neighbors, the homeowners sued the HOA, accusing the community of discrimination and harassment against them because they were Christian. After a series of proceedings, the case went to a jury, which sided with the homeowners and awarded them $75,000 in compensatory and punitive damages.

In the latest ruling, the court overturned the verdict, ruling that the jury was unfairly prejudiced by evidence of alleged threats made by neighbors because of the Christmas program. The ruling is pending an appeal [Morris v. W. Hayden Estates First Addition Homeowners Association, Inc., Idaho, April 2019].

Coach’s Tip: As an alternative to a blanket rule banning any outside decorations, some communities permit residents to put up decorations related to holidays and other occasions—both religious and secular—on the doors and windows of their units, or on outdoor patios and decks, subject to size and space limitations. If you go that route, it’s a good idea to impose time limits to require removal of the items within a certain period after the related event.

Rule #6: Treat Residents Consistently—Regardless of Religion

Adopt policies and practices to ensure that your community doesn’t treat residents differently based on their religious affiliation or beliefs. The FHA bars communities from discrimination in the terms, conditions, or privileges of rental of a dwelling—such as higher fees or more onerous lease terms—or the provision of services or facilities at the housing community—such as withholding or delaying maintenance services—on the basis of religion. The law also prohibits communities from steering applicants to certain areas within the community because of their religion. Make sure that your entire staff understands that they may not give preferential treatment to members of their religion or less favorable treatment to members of other faiths.

It’s also unlawful to hold residents to different standards of conduct just because they are members of a particular religion. In the aftermath of the 9/11 attacks, for example, HUD warned that a housing community could be accused of religious discrimination if it acts improperly in response to complaints from neighbors about Muslim residents. While communities must be responsive to complaints from residents, HUD says that you should take action against residents only when based on legitimate property management concerns. As an example, HUD cites a neighbor’s complaint about a Muslim resident’s weekly meeting of Muslim men, whom the neighbor says appear to be “unfriendly” and might be “up to something.” If the visitors don’t disturb other residents in their peaceful enjoyment of the premises, HUD says that the housing provider could face a discrimination complaint if it asks the resident to refrain from having Muslim guests without evidence of any violation of established community rules.

Rule #7: Allow Equal Access to Your Common Areas

Allow your residents equal access to the community’s common areas, including amenities, without regard to religion and other protected characteristics. HUD regulations state that it’s unlawful to limit use of the privileges, services, or facilities associated with a dwelling based on race, color, religion, sex, disability, familial status, or national origin.

For example, some communities allow residents to use the community’s common room for family parties and similar functions. If you allow residents to reserve the room for various types of activities, then you must make it available to residents regardless of whether they want to use it for secular or religious purposes. It’s unlawful for communities to allow residents to reserve the room for card games and other social events, but to deny it to a resident who wants to use the room for a prayer meeting, according to the Justice Department.

And all residents must have equal opportunity to use amenities, regardless of their religious or cultural background. If you permit a resident to hold a Christmas party in the room, then you must allow a Jewish resident to use the room for a Hanukkah party.

On the other hand, be careful that any religious accommodations don’t infringe on the rights of others to use and enjoy your common areas. You could face a discrimination claim if you restrict access to your amenities to accommodate religious practices of a majority of your residents in a way that denies equal access to other residents.

Example: In April 2019, an appeals court ruled that a New Jersey condo community’s pool schedule discriminated against women in violation of fair housing law. Roughly two-thirds of the residents of the 55-plus community were Orthodox Jews. To accommodate Orthodox principles regarding modesty, the community adopted rules for pool use designating certain hours when only members of a single sex were allowed to swim. Though the number of hours for each sex was roughly the same, the large majority of hours in the evening were reserved for men.

The court concluded that the pool schedule discriminated in its allotment of different times to mem and women in addition to using sex as its criterion. The schedule allowed women to swim less than four hours after 5 p.m. on weeknights, compared with more than 16 hours for men. Women with regular-hour jobs had little access to the pool during the work week, and the schedule appeared to reflect particular assumptions about the roles of men and women [Curto v. A Country Place Condo. Assoc., Inc., New Jersey, April 2019].

Rule #8: Enforce Rules to Prevent Harassment By or Against Residents

Take steps to enforce rules to prevent religious harassment or other misconduct by or against residents. You shouldn’t be expected to police the behavior of your residents, but you should make it clear that bullying or any other forms of harassment based on protected characteristics won’t be tolerated.

If you receive a complaint from a resident about religious harassment by a neighbor, then it’s important to investigate and act swiftly to resolve the problem. Unless you take such complaints seriously, you could be accused of tolerating religious discrimination at your community. That could lead to a fair housing complaint and, depending on the circumstances, potential liability if a court finds that you knew about the neighbor’s religious harassment but didn’t do enough to stop it.

Example: Earlier this year, the Supreme Court let stand a ruling reinstating fair housing claims against an Illinois retirement community for harassment and retaliation. In her complaint, the resident alleged that she endured months of physical and verbal abuse by other residents because of her sexual orientation, and that despite her complaints, the community did nothing to stop it and in fact, retaliated against her because of her complaints. Further proceedings were needed to determine whether management had actual knowledge of the alleged harassment and whether they were deliberately indifferent to it [Wetzel v. Glen St. Andrew Living Community, Illinois, August 2018].

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

Answer. Subject to the caveat that I am not a First Amendment lawyer, here are my thoughts:

The First Amendment to the U.S. Constitution provides:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.

Section 8 of the Oregon Constitution provides:

No law shall be passed restraining the free expression of opinion, or restricting the right to speak, write, or print freely on any subject whatever; but every person shall be responsible for the abuse of this right.  (Emphasis added.)

How these two laws have been legally interpreted, and the scope of each one vis–à–vis the other, is beyond my skill-set.

First, there is only one statute in Oregon’s landlord-tenant law that addresses this issue, and it is broadly crafted to permit expression:

90.755 Right to speak on political issues; limitations; placement of political signs. 

(1) No provision in any bylaw, rental agreement, regulation or rule may infringe upon the right of a person who rents a space for a manufactured dwelling or floating home to invite public officers, candidates for public office or officers or representatives of a tenant organization to appear and speak upon matters of public interest in the common areas or recreational areas of the facility at reasonable times and in a reasonable manner in an open public meeting. The landlord of a facility, however, may enforce reasonable rules and regulations relating to the time, place and scheduling of the speakers that will protect the interests of the majority of the homeowners.

      (2) The landlord shall allow the tenant to place political signs on or in a manufactured dwelling or floating home owned by the tenant or the space rented by the tenant. The size of the signs and the length of time for which the signs may be displayed are subject to the reasonable rules of the landlord. [Formerly 91.925; 1991 c.844 §18; 1995 c.559 §40; 2009 c.816 §17] (Emphasis added.)

So as to political signs, it appears that pro- and anti-Trump signs are clearly protected. What about pro-life signs, which could be viewed as a political statement? Same question for gay rights. Confederate flags might be regarded as political, but I believe in this day and age of hypersensitivity, it has become viewed less as emblematic of southern heritage, and more as having racial undertones. In short, community management might have an easier chance of prohibiting the flag than a sign.

What is interesting in Oregon’s law is that the rights of expression, speech, and press, are modified by the clause “but every person shall be responsible for the abuse of this right.”  Again, I do not know how this law has been judicially interpreted, but clearly, it suggests that the freedom is balanced against an abuse of the right.

In this vein, ORS 90.740(4)(j) provides that one of a resident’s legal duties in a community is to:

Behave, and require persons on the premises with the consent of the tenant to behave, in a manner that does not disturb the peaceful enjoyment of the premises by neighbors.

So, my take, is the following:

• Each situation must be viewed on a case-by-case basis, depending not only upon the signage, but the demographics of the community itself. In other words, certain signs in certain communities may not be viewed as provocative or inflammatory, and therefore be permissible. 
• However, here’s the rub: All it takes is one person with a provocative sign that offends an entire community, to enlist the aid of the ACLU, and you may quickly confront the reality of the legal cost for protecting the “peaceful enjoyment” of the rest of the community.[1]

So in the final analysis, my belief is that the “peaceful enjoyment” language of ORS 90.740(4)(j), protecting the community’s residents as a whole, coupled with Oregon’s constitutional protection against abuse of the right of free speech, together provide a legitimate basis for prohibiting non-political signage that could be deemed offensive to the rest of the community. However, such proscriptions should only be broadly spelled out in management’s rules, rather than expressly deeming certain topics permissible, and others impermissible. For example:

“Residents shall not post on their spaces or homes, signs, emblems, flags, slogans, or similar expressions, which, by their nature, could be viewed as offensive or inflammatory to other residents, and thereby interfering with their peaceful enjoyment of the Community.”

However, if the signage relates to political candidates, campaigns, politicians, and legislation, etc., ORS 90.755 appears to give residents broad rights, subject only to the size of the signage and length of time it may appear.  Lastly, I would believe that the use of profane or vulgar images or text in political signs may be reasonably prohibited by management.

[1] This is why community management should carry sizeable liability insurance.

Answer. There is nothing in the Oregon landlord-tenant laws that addresses this subject. This is not like an adult who wants to be approved as a resident and move in to an existing home. In that case, I can see that you would want to run him through the fully battery of checks.

But in this case, what would you learn? You would not be able to get any juvenile records. He probably has no credit to speak of, and his income is not necessary for establishing that his parents can afford to live in the community. It strikes me that going forward, you retain the same control over him as any other adults in the park. He has to obey the rules, etc., and if he doesn'tyou could issue a 30-day notice to the parents about his conduct.

If you wanted to add him as a Temporary Occupant, you could do that. If he violated rules, etc., you could terminate his right to be a Temporary Occupant, and require that he vacate. However, in this case, it does not seem that there is cause for concern.

If he had been a problem child, and now had grown into a problem adult, I would strongly recommend that you use a Temporary Occupancy Agreement. Your options in requiring that he vacate upon breach of the rules, are much swifter, although you cannot terminate without cause.

Although I don't believe I've seen this issue addressed in park rules, it's not a bad idea to have something in place. You could say that all children remaining in the park after their 18th birthday, must do X, Y, and Z. That way, when it happens, you will not be accused of picking on one particular tenant's son or daughter.

Lastly, I've often seen a similar situation, where the child moves away after his or her 18th birthday, and then returns a year or so later. Some landlords treat this as they would any other third party wanting to move into an existing resident's home. While it would be nice if the situation was addressed in the community rules, I have not seen this. I believe I would treat any adult wanting to share space with other residents, even parents, the same way I would treat unrelated parties; they must at least pass a background check. The rule should be the same for two residents who have been approved, then one leaves and comes back a year or so later.

In all cases, you can use the Occupancy Agreement, assuming the person passes their background check. If there is ever any doubt about the boomerang child, or former tenant coming back into the community, your best alternative (other than saying "No" based upon the background check) is to use the Temporary Occupancy Agreement.[1] However, never let the Temporary Occupancy Agreement be perpetual; be sure to have an expiration date on the term. You can always renew it if they behave.

[1] The statute is here. Note that you cannot qualify the Temporary Occupant based upon finances, since it is presumed their income is not necessary for the existing tenant(s) to pay the monthly space rent.

• The landlord accepts:
  • A last month's rent deposit collected at the beginning of the tenancy, regardless of whether the deposit covers a period beyond a termination date;
  • Rent distributed pursuant to a court order releasing money paid into court; or
  • Rent paid for a rent obligation not yet due and paid more than one rental period in advance.

• For a continuous or ongoing violation, the landlord's written warning notice remains effective for 12 months and may be renewed with a new warning notice before the end of the 12 months.
• For a violation concerning the tenant's failure to pay money owed to the landlord, the landlord's written warning notice under subsection ORS 90.412(4)(c) remains effective for 12 months from the date of the tenant's failure to pay the money owed.
• A landlord that must refund rent shall make the refund to the tenant or other payer by personal delivery or first class mail. The refund may be in the form of the tenant's or other payer's check or in any other form of check or money.

Acts not constituting waiver of termination of tenancy. If a notice of termination has been given by the landlord or the tenant, the following acts do not waive the landlord's right to terminate on the notice and do not reinstate the tenancy:

• Except in the case of issuance of a nonpayment of rent notice under ORS 90.394, the acceptance of rent if:
  • The rent is prorated to the termination date specified in the notice; or
  • The landlord refunds at least the unused balance of the rent prorated for the period beyond the termination date within 10 days after receiving the rent payment.
• Except in the case of termination for cause under ORS 90.392 (termination for cause), 90.398 (termination for drug/alcohol violations), 90.405 (unpermitted pets), 90.630 (termination of MHP tenancy by landlord) or 90.632 (termination for physical condition of home in MHP), the acceptance of rent for a rental period that extends beyond the termination date set forth in the notice, if the landlord refunds at least the unused balance of the rent for the period beyond the termination date within 10 days after the end of the remedy or correction period described in the applicable notice.
• If the termination is for cause under ORS 90.392 (termination for cause), 90.398 (termination for drug/alcohol violations), 90.405 (unpermitted pets), 90.630 (termination of MHP tenancy by landlord) or 90.632 (termination for physical condition of home in MHP) and eviction proceedings have commenced to recover possession of the premises based on the termination:
  • The acceptance of rent for a period beyond the expiration of the notice of termination during which the tenant remains in possession if:
    • The landlord notifies the tenant in writing in (or after the service of) the notice of termination for cause that the acceptance of rent while an action for possession is pending will not waive the right to terminate under the notice; and
    • The rent does not cover a period that extends beyond the date the rent payment is accepted.
  • Service of a nonpayment of rent termination notice under ORS 90.394.
• The following acts do not waive the right of the landlord to terminate on a notice of termination given by the landlord or the tenant and do not reinstate a tenancy:
  • Acceptance of a last month's rent deposit collected at the beginning of the tenancy, whether or not the deposit covers a period beyond a termination date.
  • Acceptance of rent distributed under a court order releasing money that was paid into the court as provided under ORS 90.370 (1) (Rent tender provisions when tenant files a counterclaim)
  • Acceptance of rent paid for a rent obligation not yet due and paid more than one rental period in advance.
• When a landlord must refund rent, it shall be made to the tenant or other payer by personal delivery or first class mail and may be in the form of the tenant's or other payer's check or in any other form of check or money.

Effect of acceptance of partial rent. A tenant's duty regarding rent payments is to tender to the landlord an offer of the full amount of rent owed within the time allowed by law and by the terms of the rental agreement. A landlord may refuse to accept a rent tender that is for less than the full amount of rent owed or that is untimely.

• A landlord may accept a partial payment of rent.
  • The acceptance of a partial payment does not constitute a waiver of the landlord's right to terminate the tenancy under ORS 90.394 (Termination of Rental Agreement for Failure to pay Rent) of the balance of the rent owed if the following rules below for partial payments are followed.
• A landlord and tenant may by written agreement provide that monthly rent shall be paid in regular installments of less than a month pursuant to a schedule specified in the agreement. Such agreed-upon installment rent payments are not "partial payment of rent"
• Acceptance of a partial payment of rent waives the right of the landlord to terminate the tenant's rental agreement for nonpayment of rent unless:
  • The landlord accepted the partial payment of rent before the landlord gave a nonpayment of rent termination notice based on the tenant's agreement to pay the balance by a time certain and the tenant does not pay the balance of the rent as agreed;
  • The landlord's notice of termination is served no earlier than it would have been permitted under ORS 90.394 (Termination of Rental Agreement for Failure to pay Rent) had no rent been accepted; and
  • The notice permits the tenant to avoid termination of the tenancy for nonpayment of rent by paying the balance within 72 hours (or 144 hours) or by any date to which the parties agreed, whichever is later; or
  • The landlord accepted a partial payment of rent after giving a nonpayment of rent termination notice and entered into a written agreement with the tenant that the acceptance does not constitute waiver. This agreement may provide that the landlord may terminate the rental agreement and thereafter file for eviction without serving a new non-payment of rent notice if the tenant fails to pay the balance of the rent by a time certain.
• Application of a tenant's security deposit or prepaid rent to an obligation owed to a landlord in foreclosure under ORS 90.367 does not constitute a partial payment of rent.
• Notwithstanding any acceptance of a partial payment of rent pursuant to the above rules, the tenant continues to owe the landlord the unpaid balance of the rent.

Question.Residents are concerned about the return of the son of a long-time resident who is being released from prison for burglary.  His name is on a rental agreement for a home that he lived in with his parents. His mom still lives in the community under the same rental agreement.  Since his name is still on the rental agreement, does management have to let him back in the community after being away for two years in prison.  The mother says he is still a resident - the residents and management object.  How should management proceed?

Answer.  I’m going to assume the son was a minor when he first came to the park with his mother. That being the case, he never went through the formal application process. I’m also going to assume he is no longer a minor now.  In other words, if he applied for tenancy today, he certainly would have to go through the application process including a criminal background check.

The fact that he is on the rental agreement as a minor is irrelevant today. He should be treated the same as any other tenant applicant.  If he wants to apply for tenancy he may do so. This would include a criminal background check.

You did not say whether this was a misdemeanor or felony conviction. Nor did you say whether he has other convictions. What has he been doing since release? Is he employed? Does he have any references? Does he have a parole officer? Generally, today, certain property-related convictions (as opposed to person-related, such as assault and battery) are not, per se’ the basis of an automatic denial.

Included below are some helpful links, one of which applies to the City of Portland, which has much stricter – some landlords might use other adjectives – than the rest of the state.

Uultimately, the issue is notwhether you must accept this person simply because he had formerly lived at the park – you do not. This applies to adult tenants who were previously approved, left and came back a few years later. You are within your rights to require updated background information as a condition to a person’s approval as a new tenant, whether living with an existing tenant, or in their own home.

One, “middle ground” approach you may consider is to approve the son as a “temporary occupant” under ORS 90.275.  This arrangement allows you to keep a tighter rein on him; if he causes problems, termination is much easier and fast. If you do this, be sure to limit the agreement to a short period of time, e.g. three months. Once that period expires you do not have to renew it. And if he immediately creates a problem, you can terminate immediately. And, there is no right to cure. Good luck.

Resources:

· https://www.mysmartmove.com/SmartMove/blog/hud-guidance-criminal-background-screening.page

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

· https://www.opb.org/news/article/portland-tenant-screening-regulations-pass/

· https://www.portlandoregon.gov/phb/article/752954

1. What does mediation mean? Mediation is an alternative dispute resolution process that is different from going to court and having a judge (or jury) pick a winner and loser by determining the facts and applying the law to the facts. Mediation is also different from arbitration. At an arbitration, the parties typically pick a person (usually an attorney) to act like a judge and determine the facts and apply law. At an arbitration there is also a winner and a loser. 

In mediation, the parties typically pick a third party neutral who will meet with the parties to help them find a solution to resolve a dispute. Because mediation requires the agreement of the parties to come to a resolution, it is not always successful. Mediation does not limit a party’s ability to file a lawsuit or arbitration.

In my experience, the cases that resolve at mediation are where both parties come with an open mind, are willing to listen and can consider compromise in order to avoid the cost and hassle of litigation. 

In my experience, the cases that don’t resolve are usually because one of the parties has unrealistic expectations or opinion of their case, or that the matter should move forward based on “principle.” 

2.   When is mediation required? Mediation is required for any non-exempt issues (see question 3) involving compliance with the rental agreement or non-exempt conduct of a landlord or a tenant within the facility. Please note that a facility is a manufactured home park or a floating home marina. Mediation can be initiated regarding a non-exempt dispute between a landlord and a tenant or between two or more tenants. Note that if the dispute is between two or more tenants, mediation must be initiated by the landlord. 

3.   What types of disputes are exempt (i.e. not subject to mediation)? The following disputes are not subject to mediation:

(a) Facility closures consistent with ORS 90.645 or 90.671; 

(b) Facility sales consistent with ORS 90.842 to 90.850; 

(c) Rent payments or amounts owed, including increases in rent consistent with ORS 90.600;

(d) Termination of tenancy pursuant to ORS 90.394 (failure to pay rent), 90.396 (24 hour notices), or 90.630(8) (three strike provision); 

(e) A dispute brought by a tenant who is alleged to be a perpetrator of domestic violence, sexual assault or stalking under ORS 90.445 when the dispute involves either the allegation or the victim of domestic violence, sexual assault or stalking; 

(g) A dispute involving a person not authorized to possess a dwelling unit as described in ORS 90.403; or 

(h) A dispute raised by the landlord or tenant after the tenancy has terminated and possession has been returned to the landlord (including ORS 90.675 (abandonments). 

4.   How is mediation initiated? Mediation may be initiated by a tenant or a landlord. If a tenant or landlord initiates the mediation process, then the parties are required to participate (but see questions 7 and 8 below). If there is a dispute between or among tenants, a landlord must initiate mediation.  

5.   What if mediation is not currently included in my rental agreement? A landlord and/or tenant is required to mediate regardless of whether a rental agreement currently provides for mediation. If a rental agreement does not currently have such a process, SB 586 requires a landlord to unilaterally amend the rental agreement to include mediation. Specifically, ORS 90.510 (5) (what is required to be included in rental agreements) is amended to include in a rental agreement a section for mandatory mediation of disputes that states: “that the tenant or the landlord may request mandatory mediation of a dispute that may arise concerning the rental agreement or the application of this chapter, and the process by which a party may request mediation, including a link to the web site for the Manufactured and Marina Communities Resource Center with additional information about mandatory mediation of disputes.”

 6.  Who facilitates a mediation? Mediation may be requested through either: (1) Manufactured and Marina Communities Resource Center (“MMCRC”); or (2) a local Community Dispute Resolution Center (“CDRC”); or (3) a mutually agreed-upon and qualified mediator. Each party must cooperate with the CDRC or designated mediator in scheduling a mediation session at a mutually agreeable day and time, within 30 days of the initiation of mediation. Each party must attend at least one mediation session. 

7.   Who has to participate in the mediation (i.e. does it have to be the owner)?  A landlord can designate a representative to participate in the mediation on the Landlord’s behalf (including a non attorney). The representative, however, must have the authority to resolve the dispute in the mediation.  Note that a tenant can also designate a representative.

8.   Do I have to reach an agreement in the mediation?  No. Neither party is required to reach an agreement in a mediation. Each party must attempt to mediate the dispute in “good faith.”  The law specifically says that the parties are not required to: (1) reach an agreement on all or any issues in the mediation; (2) participate in more than one mediation session; (3) participate for an unreasonable length of time in a mediation session; or (4) participate if the other party is using the mediation to harass the party or is otherwise abusing the duty to meditate.

9.   What would happen if a party failed to meditate in good faith? If a party fails to meditate in good faith by abusing the right to require mediation or uses mediation to harass the other party, the aggrieved party may recover an amount equal to one month’s rent from the violating party. Please note that this is a two way street. In addition, the other party has a defense to any claim brought by the violating party over the dispute involved in the mediation request, and may have the claim dismissed.

10. Can I use an admission in mediation at a subsequent trial? Conversely, can something I say be used against me? No. Mediation, and what is said during mediation, is confidential. Any statement made in a mediation is inadmissible. The purpose is to have an honest dialogue in order to encourage a settlement. Additionally, a mediator cannot be called as a witness.

11. Can a tenant request a mediation after I send them a termination of tenancy notice? 

Mediation can be requested after a notice terminating tenancy has been sent to a tenant, but only if the request is made to MMCRC or a designated mediator and a written confirmation of that request is delivered to you (the landlord) before the landlord files an action for possession under ORS 105.110. If the tenant delivers a notice requesting mediation before a landlord files an eviction action, the landlord may not file such action until after the mediation process concludes. If a landlord delivers a notice requesting mediation before a tenant files an action regarding a dispute, the tenant may not file such action until after the mediation process ends. 

12. Can I still accept rent during the mediation process?  Yes. Notwithstanding ORS 90.412, acceptance of rent or performance by a landlord after either party requests mediation and during the mediation process does not constitute waiver of the landlord’s right to terminate a tenancy following the mediation. Acceptance of rent or performance after the mediation process ends may constitute waiver. Additionally, all statutes of limitations are suspended during the mediation process. 

13. What happens after the mediation? If a mediation is successful, the parties should come to an agreement that resolves the dispute. The question is how enforceable is the agreement. Enforceability will depend upon the issues involved, the terms and how the agreement is drafted. I would encourage you to discuss with your legal counsel strategies on how to make the most of a mediation. For example, if an eviction action has already commenced, you may want to attempt to make the agreement a part of the ORS 105.148 mediation/agreement process. Another example is setting up an enforcement mechanism within the agreement itself.  

The CDRC or the designated mediator shall notify MMCRC of the successful or unsuccessful outcome of the mediation. The parties and the CDRC or mediator are not required to give a copy of any mediation agreement to MMCRC.

If a mediation is not successful, the parties may continue on the path they were on before the mediation. 

14. This sounds expensive, who is paying for it? Mediations will be performed by the existing network of CDRC mediators, funded by the existing annual assessment already paid by tenants ($10, collected with property tax assessments).  If the parties choose a private mediator, then the parties will have to determine how that mediator is paid. Additionally, the current annual fee paid by park landlords ($25 for parks of 20 spaces or fewer, $50 for larger parks) is doubled.

15. Very interesting (as always), Bill, but what’s this about $100,000 annual grant to the Oregon Law Center?As you may be aware, some states have allocated substantial funding to their state’s Justice Department or to create a team of private attorneys general to assist with enforcement of tenant rights. Similar systems were originally proposed by the tenants during coalition meetings and were strongly opposed by the landlord group. The ultimate compromise was a limited $100,000 per year grant to be given to the Oregon Law Center to employ one attorney to provide direct legal services to statewide park and marina residents on matters arising under the Oregon Residential Landlord Tenant Act.

16. Is mandatory mediation and the $100,000 per year in perpetuity? No. Both elements have a four-year sunset. An advisory committee has been created to monitor both elements, consisting of equal numbers of landlord and tenant representatives to present a report on the status of both elements to the 2021 and 2023 Legislatures to determine whether they should be renewed.

17. When does all of this go into effect? The effective date of SB 586 is January 1, 2010.

Answer. Notwithstanding the fact that you do not have anything in your Rules or Rental Agreement prohibiting the use, growing, or selling marijuana does not mean you cannot prohibit the activity. Granted, it would be far better if you had something in the park documents about this topic, but the still require that residents obey state and federal laws, rules, and ordinances.

Here is the short version of my answer:

Under the Federal Controlled Substances Act, 21 U.S.C. _ 801, et seq. ("the Act"), it is illegal to manufacture, distribute, and possess marijuana, also known as "cannabis. Under the Act, possession of marijuana, even when used for medical purposes, is a violation of Federal law.

In Oregon, medical use of cannabis is legal, subject to the limitations set forth in ORS 475.300 to 475.342. Commencing on July 1, 2015, subject to certain limitations and restrictions, the recreational use of marijuana also became legal.

Federal law supersedes state law where there is a direct conflict between these laws. This means that even though Oregon permits medical and recreational use of marijuana, and marijuana products, Federal law controls, and these activities remain illegal. (See, Emerald Steel Fabricators, Inc. v. Bureau of Labor and Industries, 348 Ore. 159, 230 P.3d 518 (2010)).

Accordingly, find the sections in your Rules and Rental Agreements requiring that residents obey the law. Include it in a 30-day notice under ORS 90.630(1)(a), which provides:

'_the landlord may terminate a rental agreement that is a month-to-month or fixed term tenancy for space for a manufactured dwelling or floating home by giving to the tenant not less than 30 days' notice in writing before the date designated in the notice for termination if the tenant: (a)Violates a law or ordinance related to the tenants conduct as a tenant, including but not limited to a material noncompliance with ORS 90.740 (Tenant Obligations);

ORS 90.740(3) (Tenant Obligations) provides:

Behave, and require persons on the premises with the consent of the tenant to behave, in compliance with the rental agreement and with any laws or ordinances that relate to the tenants behavior as a tenant.

You may also cite ORS 90.740(4)(j) in the 30-day notice. It provides that tenants must:

Behave, and require persons on the premises with the consent of the tenant to behave, in a manner that does not disturb the peaceful enjoyment of the premises by neighbors.

You should then enact a rule change, and institute a policy that prospectively prohibits the use, cultivation and selling of marijuana and marijuana products.

1.         Why is Miner writing an article on taxes?

Good question, because I am not a tax lawyer and (as with all of our articles) this is not legal advice. MHCO has been receiving questions from owners about the new corporate activity tax. The below questions and answers are an attempt to summarize HB 3427 and the possible effect it may have on some owners of manufactured home parks. Each situation is different and it is imperative for every owner to speak with their tax professional on whether and how the new law will be applied to each owner’s individual situation. If you are interested in getting specific advice on your situation, or need a referral to a tax professional, please feel reach out to me.

2.         What is HB 3427?

HB 3427 (“the Act”) was signed into law by Governor Kate Brown on May 16, 2019. It technically became effective on September 29, 2019, but will apply to the 2020 tax year. The Act’s official title is the “Student Success Act”. The first 55 sections of the Act establish various programs to invest in early childhood and K-12 education programs in Oregon. Examples include an “early warning system” for high school graduation, a statewide “youth reengagement” system, and school breakfast and lunch programs, to name a few. 

Section 58 of the Act creates the Corporate Activity Tax (“CAT”), also known as Oregon’s first modified gross receipt tax. The CAT is intended to raise approximately $2 billion per biennium to fund the programs listed in the Act.  Section 56 of the Act slightly reduces personal income tax rates.

3.         What is the CAT?

The CAT, or corporate activity tax, is a tax on gross receipts(or sales) over $1 million by any affected person or business in Oregon. Any person or business with a taxable commercial activity in excess of $1 million will be imposed a tax rate of 0.57% plus $250 on receipts above the first $1 million of taxable commercial activity ($250 +.57% of revenues in excess of $1 million). The first $1 million in gross receipts are exempt from the CAT. In other words, if your park does not make more than $1,000,000 per year in gross revenue (from all sources), you most likely won’t need to worry about it. BUT, check with your tax professional.

4.         What is “commercial activity”? 

Commercial activity is defined as transactions and activity in the regular course of the person’s trade or business, without deduction for expensesincurred by the trade or business (although there does appear to be some qualified deductions (see question #8 below)). 

5.         Does the CAT apply to the gross income (i.e. all the rent, utilities, fees, interest) that I make at my manufactured home park?

Again, it is imperative that you speak with your own tax professional to determine whether the CAT applies to you and what exactly it applies to. The Act specifically refers to receipts from the sale, rental, lease or license of real property to the extent the property is located in Oregon. There are several exemptions of what constitutes “commercial activity”. For example, receipts from the sale, exchange or other disposition of an asset as described in Internal Revenue Code Sections 1221 or 1231; contributions to capital; interest and dividends; sales of motor fuel; distributive income received from a pass-through entity; receipts from the wholesale or retail sale of groceries, are a few of the exemptions.

If you own multiple entities that own multiple parks in Oregon where the total gross receipts exceed $1 million, you will want to talk to your tax and/or legal advisors on whether you are required to aggregate the receipts. If you have one entity that owns several parks, you may want to discuss having separate legal entities for each property. 

 6.        What if I have another property outside of Oregon?

Only Oregon sourced commercial activity is taxed. The Act defines taxable commercial activity as the total amounts realized by the taxpayer arising from transactions and activity in the regular course of taxpayer’s trade or business that is sourcedto Oregon.  Receipts from outside Oregon wouldn’t be considered.

7.        Can I pass on the CAT to others (i.e. my tenants)?

There appears to be no prohibition on passing on the tax through increased pricing (why this is viewed by some as a backdoor sales tax); however, you must always keep other restrictions in mind. For example, you continue to have the ability to raise your rent every year pursuant to the provisions of SB 608, but there is a cap (7% plus CPI). 

8.         Can I take any deductions from “gross receipts”?

Again, talk to your tax professional, but the Act provides a 35% subtraction from taxable commercial activity of “labor costs” (defined as total compensation paid to all employees excluding any compensation paid to any single employee in excess of $500,000) or“Cost inputs” (defined as the cost of goods sold calculated in accordance with IRC Section 471).

9.         Does this replace the existing corporate tax?

No. The CAT is a new business tax and will apply in addition to Oregon’s existing corporate tax.  

10.       Does this apply to income earned in 2019?

No. The CAT will take effect for tax years beginning on or after January 1, 2020. Any person or business generating more than $750,000 of Oregon sourced commercial activity will be required to register with the Oregon Department of Revenue and file an annual return by April 15 of the following year. 

11.       Can I wait until April to pay?

Again, talk to your tax professional, but taxpayers must pay at least 80% of the balance due for any quarter or the DOR may impose penalties, starting at 20%. It is similar to paying estimated income taxes.

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.

Your "Screening Criteria" is another important document that should be provided to an interested applicant. This is the document that will determine where you draw the line between acceptance and denial. Your "Screening Criteria" is a written statement of the factors the landlord considers in deciding whether to accept of reject an applicant and any qualification required for acceptance. What can you have on that list? That is up to you. Here is a brief list to get you started: unsatisfactory rental references, the absence of any prior tenant history or credit history, unsatisfactory character references, criminal history, bankruptcy filed in the past two years, payment of rent problems, no social security number, and inaccurate information on the application, insufficient debt to income ratio. All of these are reasons for denial - it is up to you establish them as a basis for acceptance into you community. For example - maybe you accept applicants with felony conviction that are 20 years or older - it is up to you to include that on your screening criteria.

Remember to apply your criteria uniformly in all applications. Do not make exceptions. The question of whether you denied one person and accepted another could be tied to a potential discrimination case. Save yourself the agony of these situations - write a "screening criteria" and apply it uniformly. Used properly and consistently it can be a tool that keeps you above any suspicion of discrimination. The one limit on your screening criteria is that you cannot deny residency to anyone because of his or her race, color, sex, handicapped status, familial status, national origin or sources of income. However, you can deny tenancy to anyone - even if they are in a protected class - if they do not meet any of the minimum criteria that you establish in your screening criteria. Often potential applicants will "self screen" themselves by reading your "screening criteria" and realizing that they do not qualify, thus saving you and the potential applicant time and energy.

Screening/Admission Criteria: All applicants should be presented with a full explanation of the established basis for acceptance or rejection. This should be a written statement of any factors a landlord considers in deciding whether to accept or reject an applicant and any qualifications required for acceptance. This may include:

• Unsatisfactory rental references
• Applicant must be 18 years or older
• Provide two pieces of identification, one with each applicant's photo from a government office (i.e. Driver's License, State ID Card, Passport) and Social Security Card
• Be gainfully employed or have verifiable income from retirement, social security or periodic income.
• If the community is either an "age 55 or older" or an "age 62 or older" Community, you must provide proof that you meet the age requirements
• The absence of any prior tenant history or credit history
• Unsatisfactory credit history
• Unsatisfactory character references
• Any criminal history
• Insufficient income to reasonably meet the monthly rental and other expense obligations
• Presence of pets or the number, type or size of pets
• Evidence that the prospective tenant has provided landlord with falsified or materially misleading information on any material items
• If the prospective tenant refuses to sign a new written rental agreement or lease agreement
• The number of additional occupants
• Adverse information contained in the public record

Additional criteria that may be added to qualify could include:

• Minimum two-year verifiable references with previous landlords
• No payment of rent problems over the past two years
• Two years of verifiable employment
• No criminal convictions
• No tax liens
• Sufficient income to pay all outstanding obligations after payment of rent
• Any individual who is a current illegal substance abuser, or has been convicted of the illegal manufacture or distribution of a controlled substance will be denied tenancy
• Any individual or pet/animal whose residency would constitute a direct threat to the health or safety of other individuals.
• If pets are permitted they must meet the requirements of state and local laws, ordinances, and the Community in regards to number, size and breed. Farm animals, exotic and/or wild animals, livestock and certain breeds of dogs. You should list breeds of dogs that are not allowed in your community
• You may want to set a percentage of net-income that should be left over after meeting all financial obligations.
• Homes must be owner occupied - no subleasing

You MUST post your community's screening criteria publicly in the office and provide written copies to all prospective residents.

Remember to apply your criteria uniformly in all applications. Do not make exceptions! Once you make an exception for one of your criteria you are opening up the possibility of future problems. You will be in the awkward position of having to explain why you made the exception to one applicant and not to another applicant. The question of whether you denied one person and accepted another could be tied to a potential discrimination case. Save yourself the agony of these situations and do not make exceptions to your screening criteria. Take the time to put your screening criteria in writing to protect yourself and provide prospective residents with a copy so that they can have the necessary information upon which to make a decision.

Remember - you cannot deny residency to anyone because of his or her race, color, religion, sex, handicapped status, familial status, national origin or source of income. However, you can deny tenancy to anyone - even if they are in a protected class - if they do not meet any of the minimum criteria.

For example: If someone applies for a space in your park and reveals that they are Catholic and have a bad credit record you cannot deny tenancy based on the fact that the individual is Catholic. However, you may deny the tenancy based on the fact that the prospective tenant has bad credit so long as the minimum screening criteria have been consistently applied.

Tell the applicant that you require a certain amount of time to screen the completed application, but that they will be notified within seven days, in accordance with Oregon law. This will give you the opportunity to complete credit and criminal checks, determine the condition of the home for pre-sale or move-in requirements, check employment and personal references; and get information about current and past tenancies.

Example: Landlord/Community
Screening or Admission Criteria

General Requirements:

1. Positive Identification with photo ID
2. A complete and accurate application. Incomplete applications will not be processed.
3. Applicant must be able to enter into a legally binding contract
4. Any applicant currently using illegal drugs or reporting a conviction for the illegal manufacture or distribution of a controlled substance will be denied.
5. Any individual who may constitute a direct threat to the health and safety of an individual, complex, neighborhood, or the property of others will be denied.
6. An application insufficient in credit and rental requirements shall require an additional security deposit equal to 50% of stated rental amount, over and above any other security deposit or additional security deposit required.
7. Applicants may qualify individually, however no person may reside in the property if they do not meet the general requirements of (3), (4) and (5).
8. In order to qualify as a co-signer you must meet all the general requirements and have a monthly income of five times the stated rent.
9. Proof of ownership of the home.

Income Requirements:

1. Gross monthly household income should be equal to two and half time the monthly rent
2. A current pay stub from your employer will be required if we are unable verify income over the phone. If you are unemployed you must have income or liquid assets equal to two and half time the annual rent. Self employed individuals will be required to show the previous year tax return and employment will be verified through the state. A recorded business name or corporate filing will suffice.
3. If applicant does not earn enough income to reside in the property then a co-signor will be required.
4. Your application will be denied if we are unable to determine you earn a legal source of income.

Rental Requirements:

1. One year of rental history or mortgage history verifiable by a third party is required. Current or previous mortgage history showing late payments will require an additional deposit of one month rent.
2. Eviction free rental history is required.
3. Rental history from a non-third party will require an additional deposit of one month rent or a cosignor.
4. Rental history with past due rent or an outstanding balance will be denied.
5. If previous landlord fails to give a reference or give a negative reference application will be denied.
6. Three (3) or more 72 hour notices within a one year period will result in denial.
7. Three (3) or more NSF checks within a one year period will result in denial.
8. Rental history demonstrating disruptive complaints or neglect will result in denial.

Credit Requirements:

1. A credit history with negative reports will not be accepted. A negative report is considered an non medical item 60 days past due or greater, collections, repossessions, liens, judgments or garnishments. Negative credit will result in additional guidelines as follows
   1. A credit report containing a discharged bankruptcy will require an additional deposit of one month's rent or co-signor.
   2. 1-2 items 60 days past due or greater, collections, repossessions, liens judgments or garnishments will require an additional deposit of one month's rent or co-signor.
   3. 3-5 of the items above will require an additional one and half time security deposit.
   4. 6-8 of the items above will require an additional one and half time security deposit plus a cosignor.
   5. 9 or more will result in complete denial

Criminal:

Upon receipt of the rental application and a screening fee, Landlord will conduct a search of the public records to determine whether the applicant or any proposed tenant has been convicted of, or pled guilty to, or no contest to, any crime.

1. A conviction, guilty plea, or no-contest plea, ever for: any felony involving serious injury, kidnapping, death, arson, rape, sex crimes/ and or child sex crimes, extensive property damage, or drug related offenses (sale, manufacture, delivery, possession with intent to sell) A/ Felony burglary or class A/ Felony robbery or;
2. A conviction, guilty plea, or no-contest plea, where the date of disposition, release or parole have occurred within the last seven years for any; felony charges or;
3. A conviction, guilty plea, or no-contest plea, where the date of disposition, release or parole have occurred within the last seven years for; any misdemeanor or gross misdemeanor involving assault, intimidation, sex related, drug related (sale, manufacture, delivery or possession), property damage or weapons charges; or
4. A conviction, guilty plea, or no-contest plea, where the date of disposition, release or parole have occurred within the last three years for; any class B or C misdemeanor in any of the above categories or any misdemeanors in the above categories or any misdemeanors involving criminal trespass I, theft, dishonesty, prostitution shall be grounds for denial of the rental application. Pending charges or outstanding warrants for any of the above will result in suspension of the application process until the charges are resolved. Upon resolution, if the desired unit is available, the application process will be completed. Units will not be held awaiting resolution of pending charges.

Denial Policy:

If you applicant is being denied to adverse and negative information being reported, you should:

1. If it is credit related, contact the credit reporting agency listed in the denial letter in order to:
   1. Identify who is reporting negative information about you
   2. Request a correction if the information being reported is incorrect.

Remember - the "Ideal Resident":

1. Pays the rent on time.
2. Keeps the outside of the manufactured home and the space in a clean and well maintained manner.
3. Does not litter, damage or destroy community property.
4. Does not disturb the neighbors.

The key to identifying the "Ideal Resident" is a thorough and complete processing of the rental application and the supplemental verification forms, combined with a personal interview of the prospective tenant. "Snap judgements" or a "hurry to rent the space" must be avoided.

Used properly and consistently, the Rental Application and supplemental verification forms will prove helpful in countering charges of discrimination in renting spaces. The application should be used in conjunction with a personal interview of the entire household, which can reveal characteristics that do not come through on the written application. In order to protect yourself against claims, you must adopt and consistently follow specific guidelines and procedures by which each and every application is reviewed. The "Resident Acceptance Policy" will assist you in documenting the basis for your acceptance or rejection of each application. It is a good idea to maintain all rejected applications and supporting information for a period of at least three years. Tenant screening is a very important part of community management and it should not be done without reason and consistency. Tenant screening cannot be based on your personal feelings or emotions.

A thorough screening is your best resource for finding good residents. Current residents in surrounding home sites will feel more secure knowing their neighbors have also been screened.