October 2016

Are You Ready When The Man Comes Around?  Fair Housing Testers are Coming
Requests By Third Parties for Tenant Information or Entry to Their Unit
Election Facts and Information for Renters

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Volume 17 • Issue 10

October 2016

Landlord

News

3600 South Yosemite Street Suite 828, Denver, Colorado 80237

thsnews@thslawfirm.com www.thslawfirm.com

Denver Phone 303.766.8004 FAX Completed Eviction Forms To: 303.766.1181 or 303.766.1819

Colorado Springs Phone 719.550.8004 FAX Completed Eviction Forms To: 719.227.1181

ARE YOU READY WHEN THE MAN COMES AROUND? FAIR HOUSING TESTERS

ARE COMING

The man is a fair housing tester. Fair Housing testing has greatly increased over the last twelve months. The Denver Metro Fair Housing Center (DMFHC) is leading the charge by significantly increasing their testing efforts in the Denver Metro area. Unfortunately, based on fair housing discrimination complaints filed, many communities have been taken by surprise or have not been adequately trained to handle fair housing testing scenarios.

A failed test can significantly cost a landlord. Testing is generally conducted by fair housing advocacy groups (FHAGs). FHAGs always seek significant damages for alleged fair housing discrimination based on testing. In addition to any dollar amount demanded by the tenant or prospect (the person who may have been actually damaged by discriminatory conduct), a FHAG can typically demand from $10,000 to $50,000 or more for alleged fair housing violations. Further, FHAGs are much less likely to settle because from their perspective they have the goods on you. A main point of testing is to gather evidence to be used in a housing discrimination proceeding.

FHAGs justify their demands by alleging that the landlord’s discriminatory practices have impacted (damaged) the FHAG in several ways. Standard allegations may allege that the landlord’s conduct has impeded the FHAG’s efforts to ensure equal housing opportunities for all, and have forced them to divert their resources from their typical activities (a range of educational, testing, investigative, counseling, and referral services). The FHAG will also allege that the landlord’s discriminatory conduct has forced it to identify and counteract the landlord’s discriminatory practices. Regardless of the justification, FHAGs seek significant damage awards to perpetuate their mission and to engage in further fair housing testing.

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REQUESTS BY THIRD PARTIES FOR TENANT INFORMATION OR ENTRY TO THEIR UNIT

There are situations where third parties may appropriately have access to information that has been exchanged between you and your tenants and there are some instances when government agencies or third parties may have a right of entry into the apartment unit. Because of the wide variety of requests an owner/ manager may receive and the numerous laws applicable to the release of tenant information it is sometimes difficult to know how each situation should be handled.

Some of the most frequent third party requests received by owners or managers for information about a tenant, or access to a tenants unit are:

aa police officer may request access to a unit or a copy of a tenant lease;

aa property management company may request tenant

information in connection with a rental application a

tenant submitted to another community;

aa census taker may request information about the resi-

dents in a unit after being unable to contact the resi

dents; or

atenant records may be subpoenaed in litigation in

which the landlord is not a party.

Let us consider whether or not these items are appropriate to share with third parties under specific circumstances.

Entry into the Apartment

Requests by a third party for entry into an apartment that are legally appropriate are:

u Law enforcement with a valid search warrant can enter a unit.

u Law enforcement officials may enter a unit without a search warrant:

awhen in “hot pursuit” of a fleeing criminal

awhen in emergency situations involving im-

mediate hazards to life and limb or serious

damage to property (i.e. generally in situations continued on page 2

ARE YOU READY WHEN THE MAN COMES AROUND? FAIR HOUSING TESTERS ARE COMING

continued from page 1

FHAGs also use the threat of attorneys’ fees as leverage to obtain significant settlements. We defend more fair housing cases than any law firm in Colorado. Often these cases are marginal at best, meaning there is no discrimination, no intent to discriminate, or the alleged disparate treatment was based on an honest mistake, and nobody has been significantly damaged. When we tell a FHAG or the attorneys’ representing them that a matter is a marginal case, the response is typically, “We don’t care. It doesn’t matter if the tenant was not significantly damaged. If we win $1, your client will have to pay over $100,000 in attorneys’ fees to defend the case, in addition to our attorneys’ fees.”

Now that you are clear on the significant consequences of failing a fair housing test, let’s take a moment to discuss fair housing testing. The Fair Housing Enforcement Project run by Alaska Legal Services gives an excellent and concise definition of testing. “Testing is an investigative tool used by fair housing organizations and government agencies to uncover illegal housing discrimination. Testing is a simulated housing transaction designed to obtain evidence of any differential treatment based on protected classes. Typically, testing involves using people with similar profiles, but who differ in one protected characteristic, such as race. Common tests include responding to a rental or sale advertisement and viewing an advertised property.”

The best defense against fair housing testing is highly educated and trained onsite teams. Any onsite team member that regularly interacts with prospects or tenants, either in person, on the telephone, or via the web, should be educated and trained. No one should ever be deployed onsite before they have fair housing training. It only takes one slip up to become a target of a fair housing testing investigation. Fair housing testers do not discriminate. If you think that testers only target bigger players, you are mistaken. Because of their deeper pockets, companies that own or manage larger portfolios are attractive targets. However, testers also regularly test small landlords (probably because they assume onsite personnel is not adequately trained). The Denver Metro Fair Housing Center recently tested a 28-unit apartment community resulting in a $75,000 settlement.

Onsite teams must be trained in fair housing basics, but general training is not sufficient. Without specific training, even well trained teams have been stumbling in response to the latest testing tactics. Testers carry out these tactics either over the phone or via email. Two questions illustrate these tactics. Example one, the

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REQUESTS BY THIRD PARTIES FOR TENANT

INFORMATION OR ENTRY TO THEIR UNIT

continued from page 1

fire, smoke, odors of gas or hazardous

chemicals, indications of physical distress

such as cries of pain)

aprevent the imminent destruction, removal,

or concealment of evidence.

u Some subsidized housing programs administered by HUD require annual unit inspections. As a condition of qualifying for the subsidy, the tenant is contractually required to grant access to the premises for the annual inspection.

In the absence of one of the situations above, a conservative landlord may not want to provide access to the unit.

Another situation that arises with some frequency is when the Tenant has been hospitalized or has passed away. In the event of a Tenant Death, please contact the firm to discuss the issues and get a copy of the Firm’s Tenant Death Memorandum. In the event of a hospitalized Tenant, access may be provided to someone with a valid power of attorney, again contact the firm to discuss before allowing access in this situation as well.

Document Requests

aTaxing Authorities. In some instances, the IRS may be entitled to view records without a subpoena for purposes of tax administration, provided that the tenant, as the taxpayer, is given prior notice of the inspection. Title 26, United States Code §7602 allows the IRS to “examine any books, papers, records, or other data which may be relevant…for the purpose of ascertaining the correctness of any return, making a return where none has been made, determining the liability of any person for any internal revenue tax…of any transferee or fiduciary, or collecting any such liability.” This power is subject to giving the taxpayer “reasonable notice in advance” that contacts with the lessor/ manager will be made for these purposes, and is unlikely to result in a surprise inspection.

aCensus Takers. Title 13, United States Code §223 requires third parties to assist census takers seeking information about residents in apartment buildings. The owner or manager must “furnish the names of the occupants of such premises, or … give free ingress thereto and egress therefrom.” Refusal or willful neglect to comply with this inquiry subjects the lessor/ manager to a fine of $500.00. The census taker is entitled to general access to the entryways of individual units and not the units themselves.

aSubpoenas Issued in Lawsuits. When the tenant is a party to a lawsuit, the other party may have the right to compel property owners and managers to provide

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October 2016

ARE YOU READY WHEN THE MAN COMES AROUND? FAIR HOUSING TESTERS ARE COMING

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tester calls and says, “I’m disabled, and if I rent at your community can I get a close up reserved parking space?” Example two, the tester calls and says, “I’m disabled, if I rent at your community can I have an ESA (Emotional Support Animal)?”

The answer to both of these questions is simple. The answer to both questions is “Yes”. However, this answer is rarely given for a variety of reasons. The team member may not be adequately trained or familiar with how to handle reasonable accommodation requests. The landlord may not have an adequate SOP for handling reasonable accommodation requests (every landlord needs to have an SOP for reasonable accommodation requests). The team member might be adequately trained and there is a solid SOP in place, but by default, the team member mistakenly attempts to apply the SOP to a situation that it was not designed to address, and gets caught up in the legal requirements. Reasonable accommodation request SOPs are generally designed to deal with requests made by existing tenants, and usually for requests made in person.

Assuming the team member knows the legal requirements (disability, need, and reasonableness), trying to apply them to a one-off telephone call coming in from left field is problematic at best. I know what you’re thinking because we hear it all the time. When a prospect calls and makes one of these requests, how do you know that the person is disabled? The caller said they were disabled. How do you know that caller has a disability related need for the request? You don’t, but in good faith you assume they wouldn’t make the request unless they had a disability related need. What happens if the caller shows up to apply, and isn’t disabled or doesn’t have a disability related need for the request? You deal with it at that time (more on that momentarily).

When you say yes, the conversation is over. When you say something else, the conversation has the potential to go terribly wrong. Did I mention that these testing calls might be recorded? Rather than risking a bad conversation (a conversation that creates liability or that results in the landlord being targeted for further testing), the landlord would be much better served by simply taking the caller’s word that the caller meets the legal requirements, and saying yes.

If you say yes, one of two things is going to

happen in the vast majority of cases. The tester has moved on looking for the community that says no, or gives some other perceived inadequate answer. Two, the caller is a genuine prospect and shows up to apply.

If the caller is a genuine prospect, the request can be revisited if and when the caller shows up to apply. For example, if the caller shows up and is not obviously mobility impaired, you can and should ask for documentation regarding his disability and need for a close up reserved parking space. If the applicant’s disability and need is not obvious, but the applicant insists that they are entitled to the request based on the previous “Yes”, the response is simple. We take callers at their word and assumed that you met the legal requirements, but since your disability and need for the request are not obvious, we are entitled to documentation that you meet the legal requirements.

Some may argue that the answer should be “yes, if you meet the legal requirements”. While a good answer, this answer can be difficult to execute, and therefore could be problematic as well. Specifically, to execute this answer, the team member answering the phone must be knowledgeable about the legal requirements. Are you confident that any team member answering the phone can explain the legal requirements? Let’s use one of the previous examples to illustrate potential problems.

Prospective Tenant: “I’m disabled. If I rent at your community can I have an Emotional Support Animal?” Team Member: “Yes, if you meet the legal requirements”. Prospective Tenant: “What are the legal requirements?” If the team member doesn’t know the legal requirements, this conversation has a high probability of going bad. Let’s assume the team member knows the requirements (disability, disability related need, and reasonableness), and explains them. The prospective tenant is going to respond: “Look, I already told you that I was disabled”.

Regardless of what the team member says in response to this statement, the answer is not likely to be accepted by the caller. Almost any answer is rather likely to create the impression that the community discriminates against disabled individuals by not granting reasonable accommodations or attempts to erect barriers to prevent disabled individuals from renting at the community. Two possible answers illustrate the issue.

Answer one: “Yes, you told me that you were disabled, but how do I know that?” The caller may conclude that the team member is calling them a liar. Answer two: “Yes, but we don’t know if you have a disability related need for the ESA.” The caller is likely to say, “I’m telling you that I need it.” At this point, in order to prevent the call from going bad, the team member would have to

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ARE YOU READY WHEN THE MAN COMES AROUND? FAIR HOUSING TESTERS ARE COMING

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provide very detailed knowledge about the “need requirement”, and be able to explain it to the caller. The probability of the team member being able to do this at all, let alone consistently, is not very likely.

If the team member answers either of our example questions by saying, “we are a dedicated fair housing provider, and consider all requests for reasonable accommodations,” problems may still result. Prospective tenant (tester) might say, “well I just made a request so what is your answer?” If the team member says, “we have procedures to handle these requests, let me send you the forms.” The tester might say, “I already told you what you need to know, I’m not going to fill out any forms, if I rent at your property, do I get the ESA or not?”

Even if the tester is willing to complete the forms, can the team member consistently process the situation correctly, and send the right forms? Further, many reasonable accommodation SOPs we have reviewed involve forms that wouldn’t gather any further useful information, or may request information that the caller has already provided (asking for documentation regarding disability when the caller said, “I’m disabled”). Additionally, onsite resources are limited. Saying yes handles the situation in seconds. Engaging in a standard SOP for prospects that have no intention of applying is not a good use of resources.

Let’s take a minute to discuss what not to say. Similar to responding to any reasonable accommodation request, if nothing else, team members should never say “NO” when a prospective tenant (tester) calls. Thus, at a minimum, team members need to be trained never to say no. To consistently avoid the liability of saying no, team members need to be familiar with reasonable accommodation requests (disabled individuals are entitled to exceptions based on disability related needs), be able to identify reasonable accommodation requests made by prospects, and should know that testers may call to make such requests. Absent such training, the team should be instructed to avoid saying no, along with “I don’t know the answer, but we consider all such requests, let me look into it, and get back with you”. Instructing the team to never say no should be a landlord’s highest priority. Regardless of a landlord’s overall SOP, instructing the team to never say no can be easily executed, and therefore is the simplest step to significantly reduce potential liability.

Landlords should maintain a log of disability related requests made by prospects. Recording the details of such requests (when made, what was requested, and the team’s response) can be used to defend the landlord against discrimination charges. The log can also be used to evaluated the team’s response, develop SOPs, and assess whether further training is necessary. Landlords should also have a SOP to deal with email requests. Unless you have a high degree of confidence that team members can adequately respond to email (written) requests made by prospects, all written requests made by prospects should be handled by a team member that is adequately trained to respond. Otherwise, incorrect answers, or denials (NOs) are now in writing.

Being unprepared for fair housing testing can significantly cost you. Given the increased amount of testing, it is probably a matter of when and not if, a fair housing tester will contact your communities. Most landlords have given reasonable accommodation response substantial thought and developed SOPs. However, many reasonable accommodation SOPs overlook the possibility of testing, or onsite teams frequently don’t realize that testers will make reasonable accommodation requests. To avoid liability, you must educate and train your teams on testing scenarios, but education and training is not enough. Landlords should also regularly (at least annually) test their communities. Landlords shop their own assets to evaluate service. Fair housing testing and evaluation should be incorporated into any onsite testing and evaluation. If a landlord is not testing their teams, then the onsite teams are just a box of chocolates, and the landlord will never know what they are going to get if a fair housing tester comes calling.

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October 2016

October 2016

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REQUESTS BY THIRD PARTIES FOR TENANT

INFORMATION OR ENTRY TO THEIR UNIT

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information concerning their tenancy through a subpoena. Materials to be produced by the property owner or manager will be described in the subpoena. Generally the opposing party will have given the tenant or their attorney notice of the material being sought. It is recommended that our client owners/managers refrain from responding to the subpoena until discussing this request with an attorney at the Firm.

aSubpoenas Issued by Governmental Agencies. Some governmental agencies, such as the DEA, have subpoena powers. The subpoena will describe the documents to be provided to the agency.

aTenant Authorizations. A landlord may provide tenant information when authorized by the tenant in writing.

aLaw Enforcement. In light of tenant privacy rights, cautious landlords may decline to provide law enforcement officers with direct information or documents about tenants (particularly name, social security number, signature, physical characteristics or description, address, telephone number, passport number, insurance policy number, education, employment history, bank account number, credit card number, debit card number, driver license number, state id card number, or any other financial account number or medical information unless the officer provides a subpoena.

aRental property owners/managers who don’t want to risk breach of privacy claims should adopt policies of not providing tenant information, or access to tenant units, unless the person requesting the information or access has the legal right to the information or access.

If a property owner or manager is not certain whether he or she should provide information or access, even if the request falls within the accepted legal categories listed above, you should call the Firm to clarify the appropriate action that you should take.

ELECTION FACTS AND

INFORMATION FOR RENTERS

Historically renters have had minimal impact in federal elections because they vote in such small numbers. But as the number of renters has grown so has the number of renters who are now voting. This signifies that, with the number of renter voters increasing, the impact of renters in elections can be significant. Statistics indicate that one-third of the eligible votes in the 2016 election could be renters.

In the past renters were considered to be younger, more transient and less likely to vote. However, trends in the rental industry show that today’s renters are less transient and embrace the rental lifestyle as a choice not an option by necessity. For the first time, millennial voters who are a large segment of the rental population are poised to match baby boomers and exceed older generations as a share of the electorate.

With these facts in mind, owners/managers may want to provide tenants with the following information regarding voting in Colorado as a service to their residents.

1. You may register to vote at any time up to and including on Election Day. You can do so on the Colorado Secretary of State’s website or in person at a Voter Service and Polling Center. If you want to receive a ballot by mail, you must register no later than October 31.

2. To Vote by Mail –Ballots for the 2016 general election will be mailed to every registered voter in Colorado beginning on October 17th. Be certain that your address is current on your registration. To return your voted mail ballot, either drop it in the mail (postage is required) or deposit it at a ballot drop-off site in your county.

3. To Vote in Person, you can do so at any Voter Service and Polling Center (VSPC) in your county beginning on October 24th or at your designated Precinct Polling Site on Election Day. To find the closest VSPC to you, visit the Just Vote Colorado homepage, scroll down to “FIND VOTER SERVICE & POLLING CENTERS”, and enter your address into the map feature.

Note: All ballots must be received by the County Clerk no later than 7:00 p.m. on Election Day, November 8, 2016. Postmarks DO NOT count. If you are returning your ballot by mail, please allow adequate time for it to be received by 7:00 p.m. on Election Day

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October 2016

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Landlord News

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