Fair Housing

As Landlords and property managers, we have laws that we have to follow to ensure that we treat everyone fairly.  One of those is The Fair Housing Law.  The primary purpose of the Fair Housing Law of 1968 is to protect the buyer/renter of a dwelling from seller/landlord discrimination. Its primary prohibition makes it unlawful to refuse to sell, rent to, or negotiate with any person because of that person's inclusion in a protected class. 

When the Fair Housing Act was first enacted, it prohibited discrimination only on the basis of race, color, religion, sex and national origin. In 1988, disability and familial status were added. 

Protected class is a term used in United States Anti Discrimination Law. The term describes the characteristics or factors that cannot be targeted for discrimination and/or harassment. The following characteristics are considered "Protected Classes" and persons cannot be discriminated against based on these characteristics:  race, age, gender, religion, disability or familial status.  In some jurisdictions gender bias and sexual orientation have been added. 

The first Fair Housing Act was The Fair Housing Act of 1968, also known as Title VIII of the Civil Rights Act of 1968. Congress passed the act in an effort to impose a comprehensive solution to the problem of unlawful discrimination in housing based on race, color, sex, national origin, or religion. The Fair Housing Act has become a central feature of modern Civil Rights enforcement, enabling persons in the protected classes to rent or own residential property in areas that were previously segregated. The Dept of Housing and urban Development (HUD) is charged with enforcement of the act. It issues regulations and institutes investigations into discriminatory housing practices.

In my years as a property manager I have dealt with and heard about a lot of owners where not aware of Fair housing and said some questionable things. Once the law was explained to them they usually complied. There was one owner that asked what color the applicant was. There was another who asked what race the applicants were and even though that information was not given to him, he figured it out from their last name.  He declined the applicants because he felt that particular race would cook smelly things and ruin the kitchen.  I kid you not. Yes there really are people who are still that ignorant. 

What rights do renters have in foreclosures?

I have been asked a lot of question lately, about renters who are renting a property in foreclosure.  The first most basic question is, do they still have to pay their rent? The answer to that is yes. They are still required to pay for the property they are living in.  The owner still legally owns the property until the foreclosure is final.  The agreement to pay your rent is between you and the owner. The owner's agreement to pay his mortgage is between him and the bank. They are two separate agreements

Before May 20, 2009, most renters’ leases were null and void upon foreclosure. The rule in most states was that if the mortgage was recorded before the lease was signed, a foreclosure wiped out the lease (this rule is known as "first in time, first in right"). Because most leases are for a year or less, it was all too common for the mortgage to predate the lease and destroy it upon foreclosure.

These rules changed dramatically on May 20, 2009, when President Obama signed the "Protecting Tenants at Foreclosure Act of 2009." This legislation provided that leases would survive a foreclosure, meaning the tenant could stay at least until the end of the lease, and that month-to-month tenants would be entitled to 90 days' notice before having to move out.  The new owner may terminate the tenancy if the owner will occupy the unit as a primary residence, and has provided the tenant a notice to vacate at least 90 days before the effective date of such notice. This is the only exception to the rule that the tenant may not be evicted during the term of the lease.

A lease or tenancy shall be considered bona fide only if:  the mortgagor or the child, spouse, or parent of the mortgagor under the contract is not the tenant.  The lease or tenancy must be the product of an arm’s-length transaction; and the lease or tenancy requires the receipt of rent that is not substantially less than the fair market rent or the rent is reduced or

subsidized due to a federal, state, or local subsidy.

 If the lender believes that the tenancy or lease is not bona fide, it can proceed with

the eviction action under applicable state law. If the tenant files a responsive pleading in which it claims that its tenancy or lease is bona fide, then the issue will become a
question  for the court to determine. In the event that the court agrees with the
tenant, the lender’s eviction action will likely be dismissed. However, even if the action
is dismissed, the might find that the tenant owes rent payments to the lender.

If you find yourself in this situation, your best bet is to contact an attorney. 

Have I got a story for you?

After being in property management for many years, I have heard a lot of stories.  It seems sometimes, that almost everyone has one. I have heard some really sad stories, where good people have gotten a raw deal, and I have heard some far fetched, someone trying to pull one over on you stories.   

There have been people who pull up at the office door, with a truck loaded with all their stuff.   They walk in the office and say we need a place to live and we need to move in today.  That is almost always a big red flag.  Then there are others who try to lie about something that is really easy to check out. I once had a young lady come in and turn in an application. She had on scrubs and wrote down that she worked for a Veterinarian’s office.  The number she put down was obviously a cell phone number, so I looked up the number for the Veterinarian’s office and called to verify her employment.  They had never heard of her. I called the number that she gave me out of curiosity, and a young lady answered the phone. She just said hello, so I asked is this such and such Veterinarian’s office, and she said oh yeah sorry, Such and such Veterinarian’s office, how can I help you.   When I spoke to the applicant, she admitted she had borrowed her friend’s scrubs to pretend she worked there, because she was actually a stripper and was paid off the books.   

I once had a couple fill out an application, and put the same number down to contact them as well as their employer.  I called the number and the woman answered, pretending t be a business and then pretending to be a different person, who then got the applicant on the phone. The business they put down, didn’t exist and neither one of them actually had a job. They got really angry and came back to office to argue with me. 

There are many people who have credit issues, due to their divorce, or have been evicted, but it wasn’t their fault.  Even though they had been evicted several times.   Some people have had a whole bunch of collections on their credit report, because their identity was stolen, and no one will believe them.   A lady threatened me once, when I turned her down for a property and explained it was due to her credit and multiple evictions. She got really angry and started yelling and cursing at me, saying I was a lair, that her credit was great and that she had never been evicted.   Her credit  was actually really, really bad, and I told her that the evictions were listed in the public records, that she could look them up herself.  She wouldn’t stop arguing, so I finally hung up on her. She called back and was sent to my voice mail, where she threatened me and called me the devil’s spawn. 

So I guess you could say I have some stories myself. I have been threatened a few times, once I even contacted the police.  That time it is was a man who called, actually looking for someone else. I tried to nicely explain that I couldn’t help him, since it was not my listing, but would be happy to try to contact the agent for him. He had a few nasty things to say about Realtors and the mortgage industry and then hung up on me. The next day, when I got to the office, there was a message on my voice mail, from him saying a lot of awful things about me, and basically blaming me for the financial problems he had gotten into, due to getting a mortgage that he really couldn’t afford. Even though I had never met him, nor do I  have anything to do with mortgages.  He then went on to tell me to watch my back, that he would be looking out for me. That was when I contacted the police. They spoke to him and he seemed to have settled down.  His is actually sad story. Unfortunately it is not an uncommon one.

I once went and showed a property to a guy and when we got inside, he closed and locked the front door. I was really nervous, but I opened it back up and waited outside. When I got back to the office and looked him up, it turned out he was a convicted rapist.  I have also had people fill out applications and agree to background checks, only to find out they had been arrested several times for armed robbery, assault or drug dealing. It is pretty scary to turn people like that down. 

Property management is a very interesting business. You just never know what story the day will bring.