Mind Your Business – Tia’s Tips for Better Rental Management

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Testing, Testing, 1-2-3!
Ever been tested by the Fair Housing Council of Oregon (FHCO)? If you abide by best practices and an awareness of protected classes under Fair Housing law, you may never know; violate Fair Housing law with a tester and you will most definitely know. Hopefully, your violation is minor and you will be warned for the future, but violators can be financially penalized, and the fines start at $16,000. Protected classes include, Federal: race, color, national origin, religion, gender, familial status (families with children), and disability; State of Oregon: marital status, source of income (now including housing subsidies like Section 8), sexual orientation, and gender identity; City of Eugene: type of occupation, ethnicity and domestic partnership. Active duty military and victims of domestic violence have additional protections under landlord-tenant law.
Fair Housing claims against landlords often begin with the advertisement of their rental property. Place a discriminatory ad or say the wrong thing to a potential applicant, and a complaint may be filed against you. If a complaint is filed, the Fair Housing Council of Oregon will often conduct multiple tests on you to determine whether or not the complaint is legitimate.
Random testers are operating across the state right now, focusing mainly on landlords who are violating the new Housing Choice Act of 2013. That bill outlawed discrimination against housing subsidies, most frequently in regards to Section 8, but including other agency subsidies such as those administered through the Department of Human Services, Lane County Mental Health, and ShelterCare, among others. Most current violators are placing ads that say, “No Section 8.” For now, the Fair Housing Council’s mission is education, but that won’t last forever. Also, in case you haven’t heard, our local Section 8 program has now changed its parameters for leasing to allow month-to-month rental contracts. That means no more excluding Section 8 applicants by offering only month-to-month tenancies.
In regards to the advertising or leasing of rental property, there are a few definitions which you should be aware of: disparate impact, chilling effect and steering. Disparate impact describes policies or procedures which have a discriminatory effect on members of a protected class. You may unknowingly violate the law by having screening criteria that adversely impacts members of protected classes, even if you apply those criteria in an un-discriminatory fashion. Develop criteria that make allowances for members of protected classes. Chilling effect describes language, written or spoken which is off-putting to members of protected classes or causes them to fear discriminatory treatment. Beware the chilling effect of word choice. An ad that expresses a preference for tenants who are “mature and quiet” for example, could discourage families with children from applying. Steering describes policies, ads or language that encourages applicants in a protected class to go toward one rental unit or away from another. “You would like this apartment better because there are more children on this end of the complex,” or “You might not like it here because there are no other Hispanic families nearby.”
A good rule of thumb when you are advertising a rental property: Describe the property, not the people. If your property has features that would appeal to a certain demographic, just describe that benefit in your ad; the tenant who desires what you have to offer will find it. It is okay to advertise pet friendly, close to campus, wheelchair accessible, universal design, convenient location, low-maintenance landscaping, huge fenced yard, close to schools. These are all related to features of the property, not the type of person you think should live there. You may advertise public amenities such as schools, parks, shopping, proximity to bus lines or freeways, cultural attractions, trails, recreational activities, etc. You may not advertise private schools, membership-only groups such as country clubs, or any other private club, group or attraction.
Most landlords these days do a good job with their ads, but stumble when it comes to service or aid animals. You may have a “No Pets” policy, but because service or aid animals are not pets, you may not exclude an otherwise qualified applicant based on their disability-related need for an animal. You may require documentation, but when a potential applicant responds to your ad, you will get in trouble if you don’t know the difference between a pet and a service animal. In a recent local case, a landlord was found to be in violation of Fair Housing law when a complaint was filed by a prospective applicant who called on a “no pet” property, but told the landlord he had a service animal. The landlord said, “We don’t take pets.” The landlord was tested multiple times. He failed those tests, and FHCO levied a substantial fine.
Enforcing unreasonable occupancy standards is another stumbling block for the uneducated landlord. Check out the following ad I recently found on Craigslist: “Seeking clean, responsible, mature individual for respectful living situation. We have a mother-in-law type of room in that it is located in a separate building and offers complete privacy with separate entrance etc… If you are looking for a quiet place to study or just like peace and quiet this might work for you. Single occupant only, no overnight guests. MUST BE GAINFULLY EMPLOYED.” In addition to occupancy standards, this ad violates the source of income provision within Fair Housing law by requiring employment, and blatantly attempts to exclude children. Why would this unit be unsuitable for a single parent with a young child, a couple living on disability payments, students receiving financial aid, or a retiree? Banning overnight guests is a topic for another article…
Occupancy standards are created by Housing and Urban Development (HUD), the housing agency of the federal government (www.hud.gov/offices/fheo/library/occupancystds.pdf). In the past, landlords used unreasonable standards related to occupancy that served to create a disparate impact on families with children, and families from cultures where intergenerational living is commonplace. To combat this widespread problem, HUD developed guidelines that are broadly interpreted as: two per bedroom, plus one, not counting children under the age of two – but this is just a guideline. If your property is quite large, occupancy can exceed this standard. If it is quite small, or the property systems will not handle a larger number of occupants, it is okay to have standards that vary from the HUD standard or that serve to limit occupancy, but you’d better be able to defend it if challenged. Also, you may not charge more rent per tenant or a larger deposit for larger occupancies.
(There are some carve-outs in occupancy standards for fraternities, sororities, substance abuse or post-prison support homes, and professional care facilities, among others. The city of Eugene currently has a code which prohibits more than five unrelated adults from sharing a home zoned for single-family occupancy. To my knowledge, there is no case law in regards to the potential contradiction of this city code to federal Fair Housing law.)
Landlord prejudices seem to come to the fore most often when fielding calls from prospective applicants. Time after time, Fair Housing testers get different responses from landlords based on foreign accents or the questions they ask about the unit. Avoid problems by saying the same thing to each person who calls. If a caller inquires as to the specifics of their situation, and it is related to their membership in a protected class, just repeat, “I do not discriminate based on any protected class. Would you like to schedule a showing?” If you are showing a unit and a potential applicant asks about the specifics of their situation and it is related to their membership in a protected class, just repeat, “I do not discriminate based on any protected class. Would you like an application?” Don’t pre-screen an applicant or ask questions about their employment, children, religion, marital status, relationship status, citizenship status, disability, etc. The pertinent questions will be answered by the information provided on an application. You may inquire as to the number of applications they want you to bring for the number of adults (over the age of 18, or emancipated minors) who are applying to rent.
The bottom line for landlords is to check your prejudices at the door to your rental unit. Stay aware of Fair Housing law and law changes, and remember, this is a business transaction, if the applicants meet your criteria, don’t concern yourself with things that really don’t matter. Whether applicants are gay or straight, married or unmarried, get their income from a job or a housing subsidy, are undergoing gender reassignment, work in a field you find distasteful, have children out of wedlock, have immigrated from another country, belong to an unfamiliar culture, have lots of children or none at all, go to a church you think of as a cult, or have no religious affiliation, is none of your business, they are customers plain and simple. You should care about their ability to pay the rent, maintain the peaceful enjoyment of the neighbors, and take good care of your property, period.
This column offers general suggestions only and is no substitute for professional legal assistance. Please consult an attorney for advice related to your specific situation.

By Tia Politi, Rental Owner, ROA Board Member,
Lead Property Manager for Acorn Property Management

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