There are enough risks in being a rental landlord, but making needless mistakes in the perilous waters of marketing your rental to tenants and complying with Fair Housing and Americans with Disabilities laws, can be avoided relatively easily and inexpensively. We explain the game, how to avoid it and where to go for help.
Recently in Arizona a case against a government funded “tester” highlights the operation of these private “non-profit” rights organizations. What started out as a sound idea to identify discrimination based on Fair Housing legislation and later,The Americans with Disabilities Act, in some cases has morphed into an unethical shakedown. This is a departure from the original goal to advise on compliance and provide time for the landlord or business to remedy the situation.
Some of these contractors have learned how “to work the system.” They have graduated from compliance to reaching revenue goals. These non-profit activists claim to be working for a wronged tenant or other class of potential victim. Their approach and phone script is designed to create the non-compliance. This entrapment strategy is 180 degrees from the original advice and right to remedy mission. The landlord’s first notice is a formal complaint, and an offer to settle for a fee to avoid protracted litigation and the risk of a larger fine. Who wouldn’t choose the cheaper of two payments, or the lesser of two evils?
HOW THE GAME WORKS
In a five-year Ohio long case beginning 2008, Helen Grybosky, a senior on Social Security, decided she needed to rent out a three-unit property she had unsuccessfully tried to sell. Her rental ad stated “no pets.” The Fair Housing Resource Center Inc. (FHRC, Painesville, Ohio) tester called posing as a prospect with a made-up therapy dog scenario. The agency did not like the phone responses of this unsophisticated 77-year-old widow.
FHRC proceeded to follow up almost monthly using “seeing-eye and anxiety assistance dog” stories with imaginary tenants and imaginary dogs. The “potential tenant” called and claimed they require a companion animal as support for their anxiety or other malady. The landlord’s standard is not to allow pets, but given their anxiety and and the landlord’s sympathy, the landlord relents on “no pets” and asks them to pay a small refundable deposit in case they need to clean up after the (in this case imaginary) animal. The next thing charges are filed with the Department of Housing and Urban Development. In the Grybosky case the renter was a fraud with no anxiety and no animal. The tenant was a “tester” calling from a local nonprofit fair housing organization.
They “believe” that subtle discrimination occurred, so they allege discrimination. HUD sends the case to the Ohio Civil Rights Commission.
During OCRC mediation Grybosky was told to pay the local fair housing organization $5,000 to drop the charges. Grybosky’s alternative was not to pay and risk prosecution. Your (expensive) lawyer explains your option is to not pay and litigate, but if you lose you will also have to pay the state’s and the fair housing organization’s attorney costs also. Actual and punitive damages could also be assessed in favor the fair housing organization. This is the same non-profit contract organization that received some of your tax dollars from HUD for “testing.”
AMERICANS WITH DISABILITIES
In Arizona the Attorney General’s office has recently intervened in an ADA controversy where Phoenix businesses have been hit with lawsuits over Americans with Disabilities Act compliance. Landlords (commercial or residential) are similar and equally easy targets for which there is little political sympathy. Some big city politicians exploit this.
In Arizona, Advocates for Individuals with Disabilities, LLC and their lawyer have filed more than 1,000 claims. AID has said the intention of the lawsuits is to make businesses compliant but the attorney general’s office says AID are “apparently engaging in ‘trolling’ litigation tactics designed to induce defendants into quick pre-suit or post-complaint settlement that merely enriches the Plaintiff AID.”
WHAT THIS MEANS TO YOU?
Responsible landlording requires following Fair Housing requirements. DFW Investors encourages education and compliance but not at the expense of common sense and individual rights. Rogue contract tester stories are a perceived obstacle to the nearly 10 million individual Americans who provide the very necessary rental homes to some 22 million American families. DFW Investors is a great place to learn from others who can help.
STRATEGIES TO AVOID TESTING TRAPS
If you are a do-it-yourself landlord and are serious about compliance, ensure:
- You have a standard approach (script) and system that begins with an application form for all applicants.
- The applicant fills out your standard application as a first step in fielding prospect tenant calls.
- Treat all applicants the same and make them follow the identical process.
- Before you answer any questions (and we mean any questions!) about the property, REQUIRE THEM TO COMPLETE THE APPLICATION.
- Attempt to set an appointment for them to visit the property.
The application and your insistence on scheduling a visit with the prospect is often more than “the tester telemarketer” can deal with and so they move on.
The nature of this business has changed and staying up with the local, state and Federal laws is an important justification for hiring a full-time property manager. They relieve you of all of this liability and anxiety. Familiarity with ever changing Fair Housing and ADA compliance (Federal, plus state and municipal rules,) their access to legal representation, as well as business liability and errors & omissions insurances, work to shield you from these testing attempts or claims. If you wish to learn more about these types of issues and solutions, join DFWI or consult 2020REI.com on how they can advise.