Need to Know!

May 27, 2014 5:35 pm

Marijuana – Tenant Screening & the Lease

Changing laws and attitudes regarding possession and use of marijuana raise a number of questions for rental property owners and managers – the answers to which may impact tenant screening practices and the lease itself.  What we Know Washington State and Colorado now allow recreational use and possession of up to one ounce of marijuana by adults over the age of 21; 21 states (including Washington and Colorado) allow use of “medical marijuana”; and Possession and use of marijuana remain a crime under federal law. Complicating matters further: Use of medical marijuana may be associated with a disability, raising the question of “reasonable accommodations” under the Americans with Disabilities Act (ADA); and Marijuana can be ingested as well as smoked. What to Do? The easiest way to wrap your head around (and decide) this issue is to start with the options – which are pretty straight forward: Prohibit possession and... View Article

April 18, 2014 11:04 pm

FCRA Accuracy Requirement – Recent FTC Enforcement Activity

Section 607(b) of the Fair Credit Reporting Act [15 U.S.C. § 1681e] (FCRA) reads as follows: (b) Accuracy of report.—Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates. It is hard to argue with the spirit of this provision.  Tenant and employee screening reports impact individuals when they are most vulnerable – in their search for housing or employment.  That said, landlords and employers have the right (and duty) to thoroughly vet prospective tenants and employees – to protect themselves, residents, employees and clients. We rely on our screening company to provide the information needed to adequately screen prospective tenants and employees.  If that data is flawed – if it is either incomplete or inaccurate – someone gets hurt.  Landlords and employers are negatively impacted either way – whether... View Article

April 4, 2014 5:34 pm

Tenant Screening – Washington Legislature Further Limits Access to Juvenile Records

The Washington legislature passed (and the governor signed)HB 1651, further limiting access to juvenile records for tenant screening purposes. SB 1651 modifies RCW 13.50 by adding a section that requires the court to hold regular “sealing hearings” and to “administratively seal” juvenile court records at the first such meeting after “…the latest of the following events: The respondent’s eighteenth birthday; Anticipated completion of respondents probation, if ordered; <and> Anticipated release from confinement.” Under the new law, the court shall enter a written order sealing an individuals juvenile court record if one of the offenses is not at the time of the offense: A Most Serious Offense, as defined in RCW 9.94A.30;/li> A sex offense under chapter 9A.44 RCW; or A drug offense, as defined in RCW 9.94.030 – which in turn refers to RCW 69.50 (the Uniform Controlled Substances Act) RCW 9.94A.030 defines “Most Serious Offense” as any of the... View Article

March 14, 2014 7:21 pm

Consumer Financial Protection Bureau (CFPB) – Notice to Users of Consumer Reports

The Fair Credit Reporting Act (FCRA) imposes significant obligations on landlords and employers who use Consumer Reports, as defined by the FCRA.  Tenant and employee screening reports clearly fall within the definition of a Consumer Report.  The Consumer Financial Protection Bureau (CFPB) publishes a document titled “Notice to Users of Consumer Reports: Obligations of Users under the FCRA“.  It is a nicely organized summary of requirements imposed on landlords and employers (among others) who rely (in whole or in part) on tenant and employee screening reports to decide whether to hire or grant tenancy. The CFPB (and FTC) have become quite vigorous in their enforcement of the FCRA, so it pays to review the Notice to Users… from time to time.  Here are a few of the high points. Permissible Purpose Users must have a Permissible Purpose (as defined by Section 604 of the FCRA) before procuring a Consumer Report.  ... View Article

March 7, 2014 11:44 pm

Tenant Screening – Between a Rock and a Hard Place

Landlords are truly caught between a rock and a hard place when it comes to tenant screening. The Rock A failure to adequately screen prospective residents can have a devastating impact on the bottom line – NOI & equity. Further, there is a well-established duty to exercise care in screening prospective residents.  A failure to do so has resulted in disaster – followed by substantial civil penalties.  The Hard Place There has never been a more hostile legal and regulatory environment when it comes to tenant screening. First, there is a large and evolving body of law regulating consumer reporting (including tenant screening).  There is, of course, the federal Fair Credit Reporting Act (FCRA) as amended by the FACT Act.  States often have their own consumer reporting statutes – which may or may not align neatly with the FCRA.  Bottom line – these laws impose specific requirements on landlords (End-users... View Article

January 23, 2014 5:58 pm

Limits on Access to Juvenile Records – Washington State

Washington lawmakers are again considering limits on access to juvenile records.  House Bill 1651 (SB 1651), originally introduced in 2013, has been reintroduced in 2014. SB 1651 states the “The official juvenile court file of any alleged or proven juvenile offender shall be confidential unless the juvenile has been adjudicated of a sex offense… a serious violent offense as defined in RCW 9.94A.030, arson in the first degree or criminal solicitation of or criminal conspiracy to commit arson in the first degree, assault of a child in the second degree, kidnapping in the second degree, leading organized crime, or malicious placement of an explosive in the first degree….” “Serious violent offenses” is a subcategory of violent offense and means: Murder in the first degree; Homicide by abuse; Murder in the second degree; Manslaughter in the first degree; Assault in the first degree; Kidnapping in the first degree; Rape in the... View Article

January 21, 2014 7:25 pm

Washington Tenant Screening Bill – Well Intended but Misses the Mark

There is no doubt that low income individuals are more likely than others to pay multiple tenant screening fees before finding a landlord or property manager who will work with them.  Housing advocates are well aware of the problem and relentless in their pursuit of a solution – primarily through the legislature.  2014 will be no exception. Washington Senate Bill 6291, introduced by Senator David Frockt (D-North Seattle), attempts to resolve the problem with a change to the Residential Landlord Tenant Act that: First defines a so-called “Comprehensive Screening Report” – which in theory will be acceptable to the majority of landlords; and then Prohibits landlords from charging a tenant screening fee if such a report (prepared within 30 days of the application date) is made available to them – presumably via the tenant screening company. SB 6291 is well intended but will not work.  Here’s why. Fair Credit Reporting... View Article

December 27, 2013 8:57 pm

Tenant & Employee Screening Reports – Content Restrictions

Did you know that… (1) The Fair Credit Reporting Act (FCRA) imposes specific limits on the type of information Consumer Reporting Agencies (CRA’s) may include in tenant and employee screening reports; and that (2) State law often imposes additional limitations? Section 605 of the FCRA states that with few exceptions, “…no consumer reporting agency may make… consumer reports containing any of the following items of information: (1) Cases under Title 11[United States Code] or under the Bankruptcy Act that, from the date of entry of the order for relief or the date of adjudication, as the case may be, antedate the report by more than 10 years. (2) Civil suits, civil judgments, and records of arrest that, from date of entry, antedate the report by more than seven years or until the governing statute of limitations has expired, whichever is the longer period. (3) Paid tax liens which, from date... View Article

December 11, 2013 11:36 pm

Use of Criminal Records Data for Employment Screening Purposes

There has been a marked increase in the number of bills dropped (in state legislatures), federal regulatory actions and lawsuits targeting access to (and use of) criminal records data for employment screening purposes.  The trend is likely to continue and accelerate, since it is supported by legislators on both ends of the political spectrum – conservatives motivated by privacy concerns and liberals concerned with the “disparate impact” form of discrimination in housing and employment.  The federal Equal Employment Opportunity Commission (EEOC) recently updated their enforcement guidelines regarding use of criminal records for employment screening purpose.  They made clear that use of criminal records data, in some instances violates the prohibition against employment discrimination under Title VII of the Civil Rights Act of 1964.  The focus is so-called “neutral policies”  that have a disproportionate (or disparate) impact on protected groups.  According to the EEOC, “National data supports a finding that criminal... View Article

November 7, 2013 7:28 pm

Oregon Residential Landlord-Tenant Law – Limits Use of Public Records

Oregon Senate Bill 91(SB91) was passed by the legislature and signed by the governor in June of this year (2013).  The bill added new provisions and amended some chapters of ORS Chapter 90 – Oregon’s Residential Landlord and Tenant law.  It is effective on January 1, 2014.  Section 3 of the bill imposes specific limits on the landlord’s use of the public record for tenant screening purposes.  What you don’t know may well hurt you in this case, so here goes: Eviction Records Section 3(1) states that landlords may not consider “actions to recover possession” that were “…dismissed or resulted in a general judgment for the applicant (prospective resident) before the applicant submits the application or general judgments against the applicant entered five or more years prior to submission of the application. This restriction does not apply “…if the action has not resulted in a dismissal or general judgment at... View Article