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

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

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

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

WHAT DOES THE LAW SAY?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

7 RULES FOR BEING PREPARED FOR FAIR HOUSING TESTERS

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

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

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

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

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

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

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

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

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

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

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

Rule #3: Watch What You Say in Your Advertising

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

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

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

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

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

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

Rule #4: Ensure Consistency in the Leasing Office

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

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

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

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

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

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

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

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

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

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

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

Rule #5: Provide Fair Housing Training to All Employees

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

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

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

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

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

Rule #6: Shop Your Property

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

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

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

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

Rule #7: Keep Good Records

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

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

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

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

Introduction. Effective July 6, 2023 Oregon Senate Bill 611 amended Oregon’s landlord-tenant Rent Cap law. Section 5 of the Bill applies to manufactured housing tenancies and essentially mirrors the non-manufactured home tenancy section. SB 611 was substantially similar to its predecessor law capped the maximum rent increase at 10%.  For the period October 1, 2024 through September 30, 2025, the maximum rent increase is capped at 10%.  This is the same as last year for the same period.

The Rent Cap does not apply if the certificate of occupancy of the dwelling is less than 15 years, or the property is on a state/local/federal affordable housing program.

The Calculation. Unless exempted (discussed below), a rent increase for any calendar year may notexceed the lesser of: (a) ten percent (10%) or (b) the sum of seven percent (7.00%) times the Current Rent(7% X Current Rent) plus the percentage change in the consumer price index (“CPI”) times the CurrentRent (the % of CPI Change X Current Rent), hereinafter collectively referred to as the “Rent Cap”).

Publication of Consumer Price Index (“CPI”): This is the annual 12-month average change in theConsumer Price Index for All Urban Consumers, West Region (All Items). It is published by the Bureauof Labor Statistics (“BLS”) at the end of September of each year. Landlords are to use the CPI numbers that are operational on the date when the rent increase notice is sent.

If a rent increase notice is sent out before the September 30, 2024 CPI numbers are out, landlords must use the current (pre-9/30/2024 CPI calculation). The maximum rent increase will always be between 7.00% and 10%.

Caveat:  Landlords in the City of Portland should note that the SB 611 statewide 10% rental cap does not appear to override the City of Portland’s Relocation Assistance Program requirements under  Portland City Code 30.01.085(c). Any rent increase of 10% or above, even if allowed under SB 611, will trigger a requirement that the landlord pay relocation assistance if their affected tenants request it. There are limited exemptions to Portland’s 10% increase rule. Landlords should consult with an attorney to inquire about exemptions before increasing City of Portland rents more than 9.9%.

MHCO Form 49 (90 Day Rent Increase Notice). We amended the form last year, so no new change is required.[1]  The 2023-2024 rent cap will be operational until Sept 30, 2024.[2]  However, the 2024-2025 Rent Cap of 10% is the same as 2023-2024 after SB 611 became effective.

Form 49 is the 90-day rent increase notice. If landlords wait until the new CPI numbers come out in late September 2024, the earliest the rent increase would go into effect 90 days hence, so essentially January, 2025.

Example. Assuming I issue a 90-day notice on October 1, 2024 using MHCO Form 49,  the Rent Cap would be 10% because the post-Sept. 30, 2024 CPI number is 3.2%, and 10% is less than 10.2% (7% + 3.2%). The earliest my rent increase would go into effect is December 30 (assuming manual delivery or attached and mail – if regular mail, add at least 3 calendar days).

Refresher on Oregon Rent Increases.

Here are points to remember on the entire rent increase issue for park owners:

1. No later than September 30th of each year, the Oregon Department of Administrative Serviceswill calculate and publish in a press release the maximum annual rent increase percentage for thefollowing calendar year as the lesser of:

1. Ten percent; or
2. Seven percent plus the September annual 12-month average change in the Consumer PriceIndex for All Urban Consumers, West Region (All Items), as most recently published bythe Bureau of Labor Statistics of the United States Department of Labor.

2. If a tenancy is a week-to-week tenancy, the landlord may not increase the rent withoutgiving the tenant written notice at least seven days prior to the effective date of the rent increase.

3. During any tenancy other than week-to-week, the landlord may not increase the rent:
   1. Without giving the tenant written notice at least 90 days prior to the effective date of therent increase.
   2. More than once in any 12-month period.
   3. By a percentage greater than the Cap.

4. The rent increase notice must specify:
   1. The amount of the rent increase;
   2. The amount of the new rent;
   3. Facts supporting the exemption, and
   4. The date on which the increase becomes effective.

5. A landlord terminating a tenancy with a 30-day notice without cause as authorized by ORS 90.427 (3) or (4) during the first year of a tenancy may not charge rent for the next tenancyin an amount greater than the maximum amount the landlord could have charged the terminated tenancy under this section.

6. A landlord is not subject to the above rent cap rules if:
   1. The first certificate of occupancy for the dwelling unit was issued less than 15 yearsfrom the date of the notice of the rent increase; or
   2. The dwelling unit is regulated or certified as affordable housing by a federal, state orlocal government and the change in rent:
   3. Does not increase the tenant’s portion of the rent; or
   4. The increase is required by program eligibility requirements or by a change in the tenant’sincome.

7. A landlord that increases rent in violation of is liable to the tenant in an amount equal tothree months’ rent plus actual damages suffered by the tenant.

8. Tenant Committees. Tenants who reside in a manufactured community may elect one committee of seven or fewer members in a facility-wide election to represent the tenants. One tenant of record for each rented space may vote in the election. Upon written request from thetenants’ committee, the landlord or a representative of the landlord shall meet with the committeewithin 10 to 30 days of the request to discuss the tenants’ non-rent concerns regarding the facility.Unless the parties agree otherwise, upon a request from the tenants’ committee, a landlord orrepresentative of the landlord shall meet with the tenants’ committee at least once, but not morethan twice, each calendar year. The meeting shall be held on the premises if the facility has suitable meeting space for that purpose, or at a location reasonably convenient to the tenants. After themeeting, the tenants’ committee shall send a written summary of the issues and concerns addressedat the meeting to the landlord. The landlord or the landlord’s representative shall make a good faith response in writing to the committee’s summary within 60 days. The tenants’ committee may be entitled to informal dispute resolution under ORS 90.769 if the landlord or landlord’s representative fails to meet with the tenants’ committee or fails to respond in a good faith to the written summary from the committee

[1] Note: Form 49 does not contain a place to insert the facts  supporting the  exemption if the certificate of occupancy is more than 15 years, or the property is on a state/local/federal affordable housing program. Neither does it require landlords to do the calculations under SB 611. It just contains a place to insert the new rent amount.

[2] Note: Form 49 (and the ORLTA) specify a 90-day minimum notice, not a maximum. You can give as much additional notice as you want. You can issue a notice now that increases rent on Jan 1, or you can wait until the new CPI numbers come out and issue a notice 90-day notice for January 2025. Just don’t forget maximum increase is 10% unless subject to an exemption.

Why Submeter?

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

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

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

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

Studies have shown that once residents become aware of their utility usage, the total consumption will go down, on average around 22%. According to a 2007 Santa Clara Water District study, Water Submetering in Mobile Home Parks, "Tenants who are individually metered can benefit by being able to monitor and control their water use - with submetering, they only pay for what they use, not what others use . . . the four mobile home parks examined shows an annual water savings of from 15 to 30%."

Submetering makes economic sense for both the association and the residents. The water, gas and/or electric can be billed back to the residents thus reducing the overall association's expenses. Without submetering, associations and property owners may be forced to pass the increased expenses evenly to all residents. This would unfairly increase costs for residents who are already conscious of their utility usage. The residents will benefit because they are now in control of their utility expenses.

Submeters and Automatic Meter Reading Systems (AMR)

There are many types of submeters that will accommodate any mobile home. In areas where water pipes can freeze, you need to take measures to prevent the meters from freezing. For these applications there are meters with freeze plates or heat tape with insulation jackets. There are also a variety of gas and electric meters suitable for any environment. Submeters were once read by a "meter reader" who came to the property once a month to read the meters either manually or with a variety of handheld devices. This outdated way of reading meters only provided the meter readings once a month, so if there were a leak on the property or a running toilet, hundreds of gallons of water would have already been wasted before the resident received their next bill. The current way of reading submeters is through an Automatic Meter Reading System or (AMR). AMR's have a small transmitter connected to each meter that sends the meter reads wirelessly to a data collector located on the property. The meter readings can then be downloaded daily and used to notify a property manager or resident if there is a sudden or steady increase in water usage. The devices can pinpoint the exact meter and time the increased usage started so the leak can be resolved within days, not months. Many submetering and billing companies can provide a web-based system with daily meter reads with their services.

How does it Work?

It is best to select a reputable submetering and billing company in the beginning to ensure you are getting the appropriate meters and AMR system for your property. These companies will typically handle all of the details, from the design and installation to the resident billing so you can start saving immediately. Following are some typical steps for a new installation:

1. A complete property analysis is completed to determine the best submetering products for the desired application.

2. Notices are issued to inform residents of the new submetering system.

3. Equipment is ordered and depending on state and local regulations may be sent to a government office for inspection and testing. The meters would then be installed along with the AMR system.

4. Resident information along with their meters is uploaded to a billing system and ready for processing.

5. Meter information is read via (AMR) wireless transmitters and receivers and transmitted back to a billing company. Individual meter readings are then imported into a billing system and individual utility bills are created.

6. Utility bills are sent directly to residents via U.S. Mail and/or electronically to e-mail addresses.

7. The billing company will typically collects payments via multiple payment methods including check, money order, eCheck or major credit card. Online and phone payments are often accepted as well.

8. A monthly utility reimbursement check is then sent to the owner, manager or association.

Multifamily Utility Company offers both code-compliant submetering systems and customized Ratio Utility Billing Systems (RUBS) for mobile home parks. Multifamily Utility Company handles everything from the system design and installation to monthly meter reading and billing. With more than 20 years of experience, Multifamily Utility is committed to being an industry leader in submetering and billing.

For more questions please contact Multifamily Utility Company at: 800.266.0968 or view their website at www.mobilehomeutility.com or www.multifamilyutility.com

Answer: Since you said that the rent is paid every month, I assume that your resident is a month-to-month tenant (as opposed to weekly or fixed-term). If the tenant is within the first year of occupancy in the park, you can evict with a 30-day, no-cause eviction notice (MHCO Form 43 C).

(Caveat: Portland and Milwaukie both have ordinances requiring 90-day no-cause notices to allmonthly tenants, regardless of how long they have been tenants. In addition, Portland requires landlords to make "relocation assistance" payments to tenants evicted for no-cause, ranging from $2,900 to $4,500 - although the applicability of this requirement to RV tenants is legally questionable. Consult an attorney if you rent RV spaces in either of these cities.)

Unfortunately, due to recently enacted Senate Bill 608, you no longer have the right to evict a month-to-month tenant for no-cause afterthe first year of occupancy except in very limited circumstances that do not likely apply in your case (i.e., the RV park is being closed and converted to a nonresidential use). Instead, Senate Bill 608 now forces landlords to primarily rely on for-cause evictions after the first year of the tenancy.

In your particular case, you should issue a 72-hour rent nonpayment notice each and every month that the tenant is late with the rent (MHCO Form 82). If rent is due on the first day of the month, you can issue a 72-hour notice as soon as the eighth day of the month. At some point, you may catch the tenant missing the payment deadline in the 72-hour notice, after which you can file an eviction action in court.

If allowed by the tenant's rental agreement, you should also assess a late fee every month. If the tenant fails to pay the late fee as required by the rental agreement, you should issue a 30/14-day, for-cause notice to the tenant requiring payment of the late fee. Under ORS 90.392 (4), if the tenant does not pay the late fee within 14 days after delivery of the notice, the tenancy terminates 30 days after the notice was delivered.

You are correct that the "three strikes" law does not apply to an RV tenant. Only manufactured home tenants can be evicted with a 30-day notice after receiving three or more 72-hour notices within a 12-month period. As such, RV park landlords must rely on the strategies outlined above to evict month-to-month tenants on late rent payments.

One final strategy for the future is to consider using a fixed-term rental agreement. Senate Bill 608 does allow a landlord to evict a tenant at the end of the fixed term with a 90-day notice if the tenant has committed three or more violations of the rental agreement within the preceding 12 months. You must give a written warning for each violation that specifies the violation, states that three or more violations within a 12-month period may result in termination of the tenancy at the end of the fixed-term, and states that correcting the third or subsequent violation is not a defense to the termination. While this would not help in your current situation, it could be used with future tenants if you choose this strategy of using fixed-term leases.

As usual, you should always seek the advice of a knowledgeable attorney if you are unsure whether to issue an eviction notice to an RV tenant, have questions on what kind of eviction notice to issue, or need guidance to use fixed-term agreements for future residents.

By Tiffany Mittal - Multifamily Utility Company

Manufactured Homes and Submetering What is Submetering?

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

Why Submeter?

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

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

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

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

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

Answer. By all means. The bases for terminating a tenancy are found in ORS 90.630; there are several. It provides that '_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 resident not less than 30 days' notice in writing before the date designated in the notice for termination if the resident. Among others, the following are listed:

• If the resident violates a law or ordinance related to the resident's conduct as a resident, including but not limited to a material noncompliance with ORS 90.740 (Resident obligations); and

• If the resident violates a rule or rental agreement provision related to the resident's conduct as a resident and imposed as a condition of occupancy.

The definition of a "law" is a state statute. The section of the landlord-resident law (ORS 90.100) does not expressly define "ordinance" but does define "building and housing codes" to include '_any law, ordinance or governmental regulation concerning fitness for habitation, or the construction, maintenance, operation, occupancy, use or appearance of any premises or dwelling unit."

Elsewhere, a good definition of an ordinance is the following:

An ordinance is a law enacted by a municipal body, such as a city council or county commission (sometimes called county council or county board of supervisors). Ordinances govern matters not already covered by state or federal laws such as zoning, safety and building regulations. (See, http://www.lectlaw.com/ def2/ o045.htm)

So, do you need to expressly provide in your rules or rental agreement that residents must obey all state laws and local ordinances? No. In legal parlance, ORS 90.630 is "self-executing", i.e. it is effective by its own terms. [1]

However, if you are using the MHCO Lease or Rental Agreement, the forms contain text that expressly states what ORS 90.630 already provides. This is the "belts and suspenders" approach to park management.

So if a resident has a pet, you want to make sure they comply with all of the local ordinances as well as any specific rules and regulations you may have - even if the rules and regulations are stricter than the local ordinances.[2] In order to avoid unpleasant surprises, I suggest you prepare a separate "Pet Policy" handout for residents, prospective and current, making sure that it correctly states exactly which ordinances you intend to apply,[3] together with all park rules that are not already covered by the applicable laws.

[1] To be clear, however, if the park is located in Deschutes County, you may not enforce a Jefferson County ordinance unless you have incorporated that ordinance in your rules, either directly or by reference. As I said above, you may impose rules that are stricter than those found in your local jurisdiction, but you have to expressly include them in your rules.

[2] Note that if you have not been enforcing current laws, ordinances or park rules regarding pets, you may run into some push-back if you have not enforced them previously, e.g. pet size, breed, or number. Certainly, if a resident has one pet, and your pet policy is set at one, you want to make sure that you keep all non-violating residents at that number. In my opinion, your failure to enforce a rule, law or ordinance against one resident who has two pets, does not mean you may not enforce it against other residents with only one, on a going forward basis.

[3] Out of an abundance of caution, I would identify all the important ordinances, either verbatim or carefully summarized, but make it clear that this Pet Policy is for "informational purposes only", and is not to be construed as being in lieu of the actual law or ordinance. Always include the citation to the law or ordinance you are summarizing or quoting.

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.

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

There are several significant deadlines in the Oregon Legislature that start to willow down the life span of legislative proposals. The first of these deadlines was last Friday, April 7th. As of midnight on last Friday any bill in a committee in the chamber of origin (Senate bills in the Senate and House bills in the House) must be scheduled for a hearing and work session or the bill will not be considered any further during this legislative session. The exceptions to this rule are bills in Revenue Committees, Rules Committees and Ways and Means Committees which stay open the duration of the legislative session. The remaining bills will need to move out of committees by April 18th.

A number of bad legislative bills that MHCO has been fighting were stopped by last week's legislative deadline. However there are three bills that remain 'alive' that are of great concern:

HB 2004A: Prohibits landlord from terminating month-to-month tenancy without cause after first six months of occupancy except under certain circumstances with 90 days' written notice and payment of [relocation expenses] amount equal to one month's periodic rent. Provides exception for cer- tain tenancies for occupancy of dwelling unit in building or on property occupied by landlord as primary residence. Makes violation defense against action for possession by landlord. Requires fixed term tenancy to become month-to-month tenancy upon reaching specific ending date, unless tenant elects to renew or terminate tenancy. Requires landlord to make tenant offer to renew fixed term tenancy. [Repeals statewide prohibition on city and county ordinances controlling rents.] Permits city or county to implement rent stabilization program for rental of dwelling units. This bill passed the Oregon House and is now being considered in the Senate.

HB 2008: Requires landlord of manufactured dwelling park to pay tenant necessary relocation costs or applicable manufactured dwelling park closure penalty, as determined by Office of Manufactured Dwelling Park Community Relations, upon closure of park to convert to other use. Requires owner of manufactured dwelling park to give notice of final sale to office upon sale of park. Prohibits landlord from terminating without cause, unless under certain circumstances with 90 days' written notice, month-to-month tenancy consisting of rental of manufactured dwelling of float- ing home owned by landlord on space in facility. Requires fixed term tenancy consisting of rental of manufactured dwelling or floating home owned by landlord on space in facility to become month-to-month tenancy upon reaching specific end date, unless tenant elects to renew or terminate tenancy. Requires landlord to make tenant offer to renew fixed term tenancy. Requires office to produce materials to inform tenants of rights and adopt rules to require landlords to post materials in manufactured dwelling park public spaces. Directs office to establish and administer landlord-tenant dispute resolution program. Requires office to submit annual report on progress of program to interim committees of Legislative Assembly related to housing and human services for five years. Authorizes office to impose penalties for violations of landlord-tenant law against landlords of manufactured dwelling parks. Scheduled for a legislative work session on Thrusday.

HB 3331: Directs Office of Manufactured Dwelling Park Community Relations to establish and administer landlord-tenant dispute resolution program for disputes arising from notices of certain rent in- creases. Scheduled for legislative work session on Thursday.

We will be sending updates on the status of these three bills as they move through the legislative process. We are expecting significant amendments to HB 2008 but not enough to change MHCO's opposition. We are also expecting significant amendments in the Senate on HB 2004A. Again, the amendments will likely not change MHCO's opposition.

MHCO was successful in negotiating a landlord-tenant coalition bill (SB 277). This bill will be significantly amended on Wednesday in the Senate. We were also successful in exempting manufactured home communities from HB 2511. Obviously, all the bad bills left behind so far this session are a success - but we still have a lot work ahead. 

We have reached the halfway point of the 2017 Legislative Session. Unlike past legislative sessions this one looks to be a ugly and nasty fight to the end in July.    

A detailed list of bills currently being tracked by MHCO is attached - just click above the title.  

Answer. Before addressing your question directly, it is important to understand what state and federal law say about 55+ communities. Besides several qualifying requirements, a legally established 55+ community must have at least one person who is 55 years of age or older living in at least 80% of its occupied units.

This 80/20 rule is critical. Generally, communities strive to be over 80%, since falling below 80% means immediate disqualification. Does this mean that the 20% margin must be reserved for families with children? The answer is "No." In fact, a 55+ community may strive for 100% occupancy by persons age 55 or over. Does it mean that community management must accept otherwise qualified age 55+ applicants when the second or subsequent person occupant is 18 years of age or older? Again, the answer is "No."

If desired, a community may increase the age requirement for the second or subsequent occupant to 25 years, 30 years, or even 55+ years. Similarly, a community may impose a more restrictive minimum age requirement than 55. In order to maintain this exemption from the Fair Housing laws which prohibit discrimination against families with children, it is important for park owners and managers to make sure that all such age/occupancy requirements are properly reflected in the community's Rules and the Statement of Policy - and be consistently applied.

So, technically, assuming that your community demographic is well above the 80% floor, there is nothing per se' illegal with the situation you describe.[1] Say, for example, the resident was not ill, but wanted her sister and child to live in the home with her, you could - but are not required - to grant permission. Under those circumstances, if the resident subsequently became ill and was hospitalized, thus leaving the sister and her child in the home on a temporary basis, I view that as an acceptable situation, and not a violation of the law. Even though the resident is not "occupying" the home while she is in the hospital, she is the lawful occupant, and would return to that home upon her recovery.

There is, metaphorically speaking, another 80/20 rule: ORS Chapter 90 is, like most laws, enacted to address essentially 80% of the most commonly observed landlord-tenant issues. That leaves the other 20% to be dealt with on an ad hoc basis, i.e. as they arise. Your situation raises issues that while not technically addressed under the law, it is close enough, and one rather simple to justify.

• It is not a violation of the state and federal law;
• It does not endanger the health, safety or welfare of others in the community; and
• Despite some grumbling from a few residents, permitting them to stay on a temporary basis is the right thing to do, even though it may not fall directly under the temporary occupant statute. (ORS 90.275)

However, in order to avoid setting some sort of "precedent" and perhaps to quell a few complaints, you should consider having a written agreement with the sister, saying something to the effect that she and her daughter are permitted to live at the home, with the understanding that she is doing so on a temporary basis and with the knowledge and consent of the hospitalized resident; that she will abide by the community rules; and that the rent will continue to be paid on time.

You should, of course, continue to monitor the situation, making sure the agreement is being honored, and that there are periodic updates on the health of the resident. If it begins to appear that the resident may not be coming back to the space, you will have to address a sale of the home to another qualifying resident.

[1] Your question did not address whether there is a second-person age requirement. But even if there was, and the 5-year old was in violation, my answer would be the same, i.e. this is more of a charitable response to a difficult situation. And since you are the landlord - with the power to enforce violations - you can, under these circumstances, choose not to enforce the technical violation of the second-person age limit.