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Phil Querin Q&A: 55 and Older Community Problems

Phil Querin

Answer. This sounds to me a problem that transcends the park rules. Based upon your description of these circumstances, you are certainly within your rights to issue a 30-day curable notice under ORS 90.630(1)(a) and (b) for violation of one or more of your park rules (I'd have to read them to say for certain), the rental agreement (same caveat), or ORS 90.740(4)(j) (Tenant Obligations)[1].


You have not mentioned whether the Temporary Occupants are staying there under a written Temporary Occupant Agreement. If so, it is far easier to terminate them, than terminating the tenancy of a tenant who is occupying the space under a signed Rental Agreement.[2]


But the larger problem, from a humanitarian point of view, is what happens after you have all of the offenders removed? The cycle will likely repeat itself somewhere else, and the situation could become even worse for the children. I suggest you have a discussion with the tenants and make it clear that (a) the extra occupants will have to leave, and that (b) some effort should be made to assist the mother and children transition into a stable living environment. Perhaps a little advance research is in order for you, since it sounds as if the children's best interests are not being properly addressed by anyone in the home. See, https://www.oregon.gov/DHS/Offices/Pages/Child-Welfare.aspx

[1] 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.

[2] You need "cause" to terminate both, but there is no 30-day cure period for the Temporary Occupant. See, ORS 90.275.

Phil Querin Q&A: 55 and Older Community Problems

Phil Querin

Answer. This sounds to me a problem that transcends the park rules. Based upon your description of these circumstances, you are certainly within your rights to issue a 30-day curable notice under ORS 90.630(1)(a) and (b) for violation of one or more of your park rules (I'd have to read them to say for certain), the rental agreement (same caveat), or ORS 90.740(4)(j) (Tenant Obligations)[1].


You have not mentioned whether the Temporary Occupants are staying there under a written Temporary Occupant Agreement. If so, it is far easier to terminate them, than terminating the tenancy of a tenant who is occupying the space under a signed Rental Agreement.[2]


But the larger problem, from a humanitarian point of view, is what happens after you have all of the offenders removed? The cycle will likely repeat itself somewhere else, and the situation could become even worse for the children. I suggest you have a discussion with the tenants and make it clear that (a) the extra occupants will have to leave, and that (b) some effort should be made to assist the mother and children transition into a stable living environment. Perhaps a little advance research is in order for you, since it sounds as if the children's best interests are not being properly addressed by anyone in the home. See, https://www.oregon.gov/DHS/Offices/Pages/Child-Welfare.aspx

[1] 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.

[2] You need "cause" to terminate both, but there is no 30-day cure period for the Temporary Occupant. See, ORS 90.275.

How Can an Appraisal Help You?

 

By:  Kurt Plaster, MAI
        Director BBG   VALUATION + ADVISORY + ASSESSMENT
         1220 SW Morrison, Suite 800
         Portland, OR 97205
         P 503-478-1014   C 503-593-7726
         KPlaster@bbgres.com

 

Most of an owner's or manager's experience with an appraiser corresponds with purchase, sale, or refinancing of a park. However, appraiser's do not only work for the bank. They can also help in estate planning or valuation services surrounding tax issues (among other things). 

 

As objective market participants, an appraiser can provide insightful consultation services as well. Whether it is insight to market rental rates, trends in rental increases, or expense structures (to name a few), an appraiser's understanding of valuation can potentially help improve a park's cash flow or operating margins. Further, they can provide relevant data to support you during the sale negotiation process.

 

Range of Services

  • Appraisals and consulting for financial institutions, attorneys, accountants, private individuals, etc.
  • Market and Feasibility Analysis
  • Portfolio Valuation
  • Arbitration/Dispute Resolution
  • Private estate planning/filing

Critical Valuation Issues

  • In-Depth Market Analysis: Market supply/demand analysis. Surveying current rental and occupancy rates. Forecasting occupancy and potential rental increases.
  • In-Depth Operating Income/Expense Analysis

We focus on providing superior communication with our clients to offer the best possible solutions to their appraisal or other valuation related needs. We provide appraisal, advisory and consulting services on the full spectrum of mobile home park and RV park related facilities.

Kurt Plaster_BBG Resume.pdf

Contact Kurt Plaster, MAI or Alex Annand for more information.

Landlords Can Be Liable for Tenant-on-Tenant Harassment

MHCO

Landlords may be liable for discrimination if they harass or allow their leasing staff, managers, and other agents to harass tenants on the basis of race, etc. Recent cases pose the controversial question of whether landlords can also be liable for the harassment committed by their tenants. The two federal courts that had specifically addressed this issue until now have reached conflicting results. In 2023, another federal court weighed in on the question of tenant-on-tenant liability.

Situation: A tenant claimed he was sexually harassed by his next-door neighbor, citing a series of incidents in which the neighbor allegedly:

  • Insulted him in Spanish;
  • Blocked his path so that his chest touched the neighbor’s chest;
  • Leered at his crotch area;
  • Snuck up behind him; and
  • Told gardeners to use a leaf blower to blow dust toward his apartment.    

The tenant claimed that all of this amounted to a hostile housing environment and sued the landlord for sex discrimination.

You Make the Call: Did the tenant have a valid claim for tenant-on-tenant harassment?

Answer: No

Ruling: The California federal district court granted the landlord’s motion for summary judgment. A landlord could, in fact, be liable for a hostile housing environment, as long as tenants can show they were subjected to: (1) unwelcomed (2) sexual harassment that was (3) “sufficiently severe or pervasive so as to interfere with or deprive the tenant of [his] right to use or enjoy [his] home.”

However, the court continued, the neighbor’s alleged conduct in this case, while no doubt annoying, wasn’t severe enough to prove a hostile housing environment interfering with the tenant’s enjoyment of his apartment [Pardo-Pena v. Spector, 2023 U.S. Dist. LEXIS 13904, 2023 WL 2202515].      

Takeaway: The issue of landlord liability for tenant-on-tenant harassment remains unresolved, except, arguably, in the Second Circuit, which has rejected the theory. While ultimately decided in favor of the landlord, the Pardo-Pena ruling opens a new dimension in the controversy by likening housing to the workplace and exposing landlords to the risk of liability for “hostile housing environment” the way an employer can be liable for a “hostile work environment.”

Bottom Line: Regardless of what the law says, landlords have not only a moral but business imperative in seeking to provide a respectful housing environment in which no tenant has to endure harassment of any kind. Best practice: The starting point for preventing tenant-on-tenant harassment is to create and implement a written anti-harassment policy as part of your community rules. Such a policy should include seven elements:

  • A statement of policy that condemns harassment and expresses your company’s commitment to provide a respectful housing environment enabling all tenants are to enjoy their tenancy;
  • A clear and broad definition of harassment as including any “action, conduct, or comment that can reasonably be expected to cause offense, humiliation, or other physical or psychological injury or illness to a tenant or other person,” accompanied by a list of examples;
  • A process or mechanism that tenants can use to report the harassment they experience or witness;
  • Assurances that tenants will suffer no retaliation of any kind for reporting harassment in good faith;
  • Protocols and procedures for responding to, investigating, and resolving the harassment complaints that you receive;
  • Language indicating that tenants will be held accountable for any harassment they’re found to have committed; and
  • Clarification that filing a harassment complaint with you doesn’t take away a tenant’s right to file a housing discrimination complaint (to the extent the harassment is based on race, sex, etc.) with HUD or state fair housing agencies.

 

MHCO Article: Fair Housing Laws Apply When Selling or Renting!

MHCO

State and local fair housing laws mirror federal laws, but add additional protected classes. In Oregon, for instance, "marital status" and "source of income" are protected classes in addition to the seven federal classes. To these state and federal classes, cities may add additional protections. Eugene and Corvallis, for example are cities that add "age" to the list.

 

State, federal and local fair housing laws all prohibit discrimination in selling, renting or leasing activities, including advertising, because the buyer, renter or lessee is a member of a protected class. It would be illegal to refuse to sell a house to someone because of his or her familial status or race or religion or membership in any other protected classes. That means a seller, with limited exceptions applicable to senior housing, cannot refuse to rent or sell to a family with children.

 

In addition to outright refusals to sell, rent or lease, Oregon fair housing laws also prohibit such things as expelling a purchaser from real property, offering different terms or rent or even attempting to discourage someone from purchasing, renting or leasing real property because the person is a member of a protected class. Fair housing laws also prohibit discriminatory advertising of any kind.

 

Advertising discrimination can include using works in flyers or ads that indicate a preference, limitation, specification or discrimination based upon the purchaser being a member of a protected class. Newspaper associations publish long lists of words that are considered discriminatory or that should be used only with great care.

 

Fair housing violations can be quite costly. Several years in Oregon, a manufactured home park owner paid $50,000 for refusing to rent to families with children. Property owners who do not follow fair housing laws have to worry about government agencies bringing an enforcement action.

 

In Oregon, the enforcement agency is the Bureau of Labor and Industries; for the federal government it is the Department of Housing and Urban Development.

 

People who believe they have been discriminated against can bring a civil suit in addition to complaining to the government.

 

Fair housing advocacy groups sometimes dispatch "testers" who have different social, racial and ethnic backgrounds to see if each tester is treated the same. Realtors also have been trained to help clients navigate the intricacies of buying and selling property.

Beyond The SAFE ACT with Blackhawk Capital Group

Kris Monte

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Handling Violations to Rules and Regulations

MHCO

But when all is said and done, the one thing that takes most of the community manager's time is handling guideline violations. How do you, as an extremely busy person, do this with only a minimum amount of time invested? How do you handle residents as a fragile yet necessary part of your business and still get everything else done without making them feel that they are an imposition to you? How do you notify and discuss a guidelines violation with a resident without starting World War III? And, most importantly, how do you facilitate correction of outstanding violations in a timely manner.


Steps Toward Resolution



As with anything, there are no easy answers to these questions. Resolving problems must start before there is a problem. That means starting with the administrative side of your community. For a first step, look at the document you use for your community guidelines. Is it clearly written? Are the guidelines reasonable? Are they enforceable?


The second step is the orientation process. It is imperative that as a community manager, you take time to discuss certain items with residents after they have been approved. The lease, the terms of the rental agreement, and the specific requirements and provisions contained in the guidelines are high on the list of items to discuss. Is this a time-consuming process? Most definitely. And is there an alternative? None that are really acceptable. New residents will probably sign a statement that says they received the guidelines, have read them and agree to abide by them, even if they haven'tread them.


This is the start of a major problem for you as a community manager. They will most likely not go home and read the guidelines and, therefore, won't call you with any questions, because they can't possibly have any. This is the beginning of a major problem for you as a community manager. Your first realization that there is a problem should be when you see them in violation of one or more of the guidelines. When they receive a notice, a phone call, or a visit from you, one of their first comments is almost sure to be, "No one told me I couldn'tdo that," followed by an incredulous look of disbelief.


As a community manager, you are now in the position of not only enforcing your guidelines, but defending and explaining them as well. This is not an enviable position,


because rarely do such interactions end quickly or peacefully. Residents feel insulted, defensive and that they must somehow come out on top in a contest of wills. A community manager that comes on too strongly, that threatens eviction over the littlest thing, or that appears to be unreasonable will not gain cooperation from this resident, now or ever.



The Nightmare Begins



Now you've begun a nightmare of a resident relations problem, and it's sure to affect resident retention. The simple act of discussing guidelines during the orientation process can usually eliminate most of this grief. Hand-in-hand with the discussion, the resident needs to acknowledge his responsibilities and agree to abide by the terms explained in the guidelines.


The acknowledgement was for years obtained in the form of a separate statement that the new resident signed.


This statement went something like: "The undersigned agrees that he has read and understands all requirements as presented in the guidelines, and agrees to adhere to the terms contained therein during the time he is a resident of this community."

A copy of the guidelines was then given to the resident for future reference. In reality, community managers usually cut corners in the presentation and discussion of the lease and the guidelines. The resident usually makes it eminently clear that he is trying to move, is in a hurry, and doesn'thave time for a lot of paperwork. What a shame for everyone. This is a resident who is headed for misunderstandings and a community manager who is headed for problems.


When discussing guidelines with a new resident, take time to talk about each and every term and provision. Then, request that the resident, and all adult members of the family, either initial or sign each page of the guidelines.



Laid Out in Black & White



When a resident violates one of the guidelines and you have those initialed pages, you have the ability to turn a potentially contentious situation into a routine notification process. It happens because you now are able to simply send a basic form letter that saying "It appears that you may have decided to alter your lifestyle in such a way that it no longer is aligned with the guidelines for this community. At the time you joined us as a resident, we discussed the guidelines that set acceptable parameters of behavior and responsibility for resident and management alike who live in (community name). Please call the office so that we may discuss your decision to change your lifestyle with you." Then, staple a copy of the initialed page with the violated guideline(s) currently being violated.


What happens is the realization on the part of the resident that he is caught dead to rights. There is no wiggle room here. There is no need for him to try to defend his actions or to tell you that he didn'tknow he was violating a guideline. And, there is no need for him to feel like he is backed into a corner and has to become aggressive or belligerent. Your notice simply acknowledges that he has made a choice, and asks for him to take time to discuss it with you.


Remember, the best resident relations program can be compared to a round room: If you don't back a resident into a corner where he has to defend himself you can truly have a productive conversation, mutual respect, and a meeting of the minds. If you force him to lose face; if you turn this type of situation into a confrontation where the battle lines are drawn; or if you place a large amount of importance on the "winning" of every disagreement, you've lost the resident relations game before you even started.


Resolve those guideline violations that frequently happen by using peer pressure, rewards, public recognition, and, once in a while, fear. By using all

these techniques and more, you can truly enforce your guidelines and build your resident relations program to new heights.


Yours will be the community run by a manager with a reputation for being fair, honest, and consistent. The time and emotional energy you spend on guideline violations will be greatly reduced, and the time you do spend in the future will be much more pleasant.



Where The Problems Lie


Which of your community guide-lines are violated the most often? What problems do you need to eliminate in order to better meet the goals of your community owner or to have a more professionally operated community?


Among these are reducing receivables; out-of-compliance clotheslines; the building of decks that are required as part of the initial installation but are still not done 60 days later; installation of skirting that is supposed to be done by a third party and remains undone; residents who ride bicycles on the community streets without paying attention to motorists; and residents who "forget" the streets have a speed limit and are not part of the Indianapolis Motor Speedway.

Planning Ahead for Disasters

MHCO

Step 1: Learn all you can about the kinds of disasters that could possibly occur in your community - there may be some that you are not aware of. Good resources for this information included your local emergency management office, the local American red Cross chapter or a state-level emergency preparedness agency.


For example, people at these organizations can help you lean whether your community is near a flood plain or a hazardous materials facility. And, did you know that all 50 states and all U.S. territories are vulnerable to earthquakes? In Oregon the risk of an earthquake is considered by the Federal Emergency Management Agency to be moderate to high. On the Oregon coast even a moderate earthquake adds the additional threat of a tsunami. Are you prepared?


When you have a list of all of the potential problems you might face, you can develop a plan on how to cope with each one. Some parts of each plan will be the same, including Steps 2 and 3 - later in this article.


Depending on the type of problems that might take place in your community, determine whether residents would ever need to evacuate or seek shelter. If the answer is "yes" to either or both questions, prepare an evacuation plan.

Step 2: Develop a master list of telephone numbers that you will need in the case of an emergency. This list should include three major parts:


  • Community resources that would be available.

  • Residents in the community who are participating in the disaster planning and implementation programs.

  • Key employees and others involved with the management or ownership of the community.

You will need both home and work numbers for residents and employees, and business and after-hours numbers for community resources. For key employees, you may also wish to include their cell or mobile phone or pager numbers. All community managers and owners should have this list prominently displayed near every telephone in their homes and offices.


For your convenience, a comprehensive list is included on the next page. You can make copies of it and fill in the blanks, or you can create your own lsit, based on the specifics of you community.


Step 3: Get residents involved in developing and implementing disaster management plans. Emergency management experts agree that this is critical to the success of your program. There will be more about how to work with a Resident's Disaster Planning Committee in future articles.

Mark Busch Q&A: RVs: Can I Rent to RVers

Mark L. Busch

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Phil Querin Q&A: Fees Against Tenants Who Violate the Rules

Phil Querin

Answer: The statute you are referring to is 90.302, and it provides the following: • A landlord may charge a tenant a fee for each occurrence of the following: o A late rent payment; o A dishonored check; o Removal or tampering with a properly functioning smoke alarm,smoke detector or carbon monoxide alarm; o The violation of a written pet agreement or of a rule relating to pets in a facility; o The abandonment or relinquishment of a dwelling unit during a fixed term tenancy without cause; • A landlord may charge a tenant a fee for a second noncompliance or for a subsequent noncompliance with written rules or policies that describe the prohibited conduct and the fee for a second noncompliance, and for any third or subsequent noncompliance, that occurs within one year after a written warning notice. o The fee may not exceed $50 for the second noncompliance within one year after the warning notice for the same or a similar noncompliance or o $50 plus five percent of the rent payment for the current rental period for a third or subsequent noncompliance within one year after the warning notice for the same or a similar noncompliance. • The landlord must: o Give the tenant a written warning notice that describes:  A specific noncompliance before charging a fee for a second or subsequent noncompliance for the same or similar conduct; and  The amount of the fee for a second noncompliance, and for any subsequent noncompliance, that occurs within one year after the warning notice. Give a tenant a written notice describing the noncompliance when assessing a fee for a second or subsequent noncompliance that occurs within one year after the warning notice. Give a warning notice for a noncompliance or assess a fee for a second or subsequent noncompliance within 30 days after the act constituting noncompliance. • The landlord may terminate a tenancy for a noncompliance instead of assessing a fee, but may not assess a fee and terminate a tenancy for the same noncompliance. • The landlord may not deduct a fee from a rent payment for the current or a subsequent rental period. • The landlord may charge a tenant a fee for occurrences of noncompliance with written rules or policies as provided above for the following types of noncompliance: o The late payment to futility or service charge that the tenant owes the landlord; o The failure to clean up pet waste from the space; o The failure to clean up garbage,rubbish and other waste from the space; o For parking violations; o For the improper use of vehicles within the premises; o For smoking in a clearly designated nonsmoking area within the community other than the home; 1 o For keeping an unauthorized pet capable of causing damage to persons or property. • The landlord is not be required to account for or return to any fees to the tenant. • Other than for early termination of a fixed term lease (discussed above) a landlord may not charge a tenant any form of liquidated damages, however designated. • Nonpayment of a fee is not grounds for termination of a rental agreement for nonpayment of rent (i.e. under ORS 90.394), but is grounds for a 30-day notice of termination for cause under 90.630 (1). • This law does not apply to: o Attorneyfeesawarded; o Applicant screening charges; o Charges for improvements or other actions that are requested by the tenant and are not required under the rental agreement or by law, including the cost to replace a key lost by a tenant; o Processing fees charged to the landlord by a credit card company and passed through to the tenant for the use of a credit card by the tenant to make a payment when:  The credit card company allows processing fees to be passed through to the credit card holder; and  The landlord allows the tenant to pay in cash or by check; or  A requirement by a landlord in a written rental agreement that a tenant obtain and maintain renter’s liability insurance. • NOTE: The fees must be described in a written rental agreement. o Since ORS90.100(38)defines“rental agreement”to mean“…all agreements,written or oral, and valid rules and regulations, it would seem that including the fines in the rules would suffice. 2