CRIMINAL BACKGROUND CHECKS & DISPARATE IMPACT
Landlords who deny applicants on the basis of criminal convictions may be in violation of Fair Housing law. HUD’s position is that people of color have a higher rate of criminal conviction than do white people, so by arbitrarily denying the applicant on the basis of any felony conviction the land- lord’s policy is having a disparate impact on people of color. The reasoning is that people with higher income and more resources are able to hire attorneys to put forth a stronger de- fense than do poor defendants that are represented by over- worked public defenders. This doesn’t mean that a landlord can’t conduct criminal
background checks. It means that the landlord needs to estab- lish criteria for which convictions are not acceptable because of sound business practices. If you perform criminal back- ground checks as part of your tenant screening, you should re-examine that policy and, if you continue to conduct crim- inal background checks, make sure your updated policy iden- tifi es those convictions that demonstrate why the applicant is a bad credit risk or a high risk for physically abusing the prop- erty. Some property managers have ceased to perform crimi- nal background checks as part of their screening process. As it turns out, most of the “criminals” that a landlord may want to turn away also have bad credit — so it’s a non-issue.
HOSTILE ENVIRONMENT & DISPARATE IMPACT
Another new position adopted by HUD is that the landlord of a multi-family property may be in violation of Fair Housing law if it comes to the landlord’s attention that one of their residents has created a “hostile environment” for other residents and the landlord does nothing to rectify the situation. This issue will prove much more challenging for property managers. Imagine you are managing a duplex or apartment property.
One of your residents is an extremely rude, out-spoken, and unreasonable person. We will refer to him as Mr. Rude. Another of your residents is of a different background than Mr. Rude. We will refer to him as Mr. Innocent. Every time Mr. Rude sees Mr. Innocent he makes disparaging remarks and is insulting. Does Mr. Rude have the right under our constitution to ex- press these opinions? And when do these comments cross a line and create a “hostile environment”? That will be for courts to decide.
EMOTIONAL SUPPORT ANIMALS This topic continues to create confusion among property managers. HUD places no restriction on what animal can be
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an “emotional support” or “comfort” animal. However some insurance companies refuse to insure properties with dogs which the insurance company considers dangerous, such as a Pit Bull, Rottweiler, Doberman, etc. HUD has issued a memo stating that Fair Housing law re- quires landlords to make “reasonable accommodations” for disabled residents. Cancellation of the landlord’s insurance policy is considered by HUD as an unreasonable accommo- dation. If you get an application to rent from a prospect that claims their emotional support animal is a dog which the land- lord’s insurance policy prohibits, make sure to get a letter from the insurance company for your fi le documenting that the acceptance of this particular animal in the premises would re- sult in a cancellation of the insurance policy. HUD’s memo on this topic specifi cally directs that the investigator substan- tiate the landlord’s claim regarding the loss of coverage with the insurance company.
CHANGES TO GAR FORMS As a result of these changes to HUD policies, the GAR
Forms Committee has changed the Rental Application (F44) and the Pet Exhibit (F137). The Rental Application no lon- ger asks questions about the applicant’s criminal record and several new questions have been added regarding the appli- cant’s credit history. The form has also been re-formatted so that property managers can fax the signed form to former land- lords showing the applicant’s authorization to release the re- quested information but without compromising any of the applicant’s sensitive information. The Pet Exhibit has been modifi ed to permit more fl exibil- ity for landlords and property managers to charge pet depos- its and/or pet fees, to have either the landlord or the tenant responsible for steam cleaning carpets and spraying for fl eas, and it reminds tenants that have “service animals” or “emo- tional support animals” that, while they may not have to pay an additional deposit or pet fee, the tenant is still responsible for any damage to the property caused by the animal. Defending Fair Housing complaints is expensive and time consuming. Make sure your policies and procedures comply with HUD’s interpretations of Fair Housing law so you can avoid being the test case and trying to defend your policies and procedures after a complaint has been fi led. MIKE NELSON, GRI®
MPM® RMP® IS THE
PRESIDENT OF EXCALIBUR HOMES, LLC CRMC® WHICH MANAGES ABOUT 1300 RENTAL HOUSES IN THE METRO ATLANTA AREA. MIKE IS ALSO AN INSTRUCTOR ON TOPICS RELATED TO PROPERTY MANAGEMENT FOR THE GEORGIA REALTORS®
AND
THE NATIONAL ASSOCIATION OF RESIDENTIAL PROPERTY MANAGERS (NARPM).
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