Need to Know!

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

October 10, 2013 5:01 pm

Seattle Criminal Records Ordinance – Effective November 1!!

Half the battle in managing a successful business these days is making sense of (and navigating) the mind-numbingly complex, at times ambiguous and often conflicting patchwork of federal, state and local laws.  That is certainly the case when it comes to equal employment opportunity (EEO) law.  In less than a year the federal Equal Employment Opportunity Commission (EEOC) and the Seattle City Council took action to limit use of criminal records for employment screening purposes.  What follows is a discussion of those actions and specific suggestions as to how you might navigate this increasingly complex legal environment. Equal Employment Opportunity Commission The EEOC recently published updated Enforcement Guidance regarding use of criminal records for employment screening purposes.  The Guidance states that use of criminal records in making employment decisions in some instances violates the prohibition against employment discrimination under Title VII of the Civil Rights Act of 1964.  The EEOC’s position... View Article

October 3, 2013 5:29 pm

Tenant & Employee Screening – Take the Legal High Road!

The rapid pace of legal and regulator change affecting resident and employee background checks shows no sign of abating. Staying on top of changes in state, federal and now local law, and adapting to those changes, can be overwhelming – especially for those who operate across multiple jurisdictions.  That’s the bad news.  The good news is that there are specific (best) practices that, if followed, make it possible to thoroughly vet prospective residents (and employees) and NOT become a target for regulators or trial lawyers. Background There are several factors driving the changing legal and regulatory landscape, including the: Disparate impact legal theory; Increase in the number of applicants (consumers) with criminal records – combined with the correlation between joblessness on repeat offenses; Current economy (unemployment); and Ease of access to credit and public records (criminal and eviction) data – combined with questions of accuracy. The disparate impact discrimination theory... View Article

July 29, 2013 9:37 pm

Screen Prospective Tenants – Reduce Problems & Improve the Bottom Line

Carefully screening prospective tenants does more to reduce problems and improve the bottom line than just about anything else a landlord can do.  Yet there are those who, due to financial pressures or lack of experience either fail to screen tenants or do so poorly. Poorly screened tenants are more likely to damage the property, be the subject of noise complaints, make late payments and otherwise fail to comply with the terms of the lease.  They increase turnover due to their impact on others and, ultimately, reduce rents, decrease net operating income and hammer owner equity. That is not to say that screening prospective tenants is easy.  Landlords must navigate a rapidly evolving and increasingly complex legal and regulatory environment, state and federal fair housing and consumer reporting law.  There are vast differences in the quality (completeness and accuracy) of data provided by tenant background check services. Step one in... View Article

July 17, 2013 9:02 pm

Authentication – Background Check Best Practice #7

Food & shelter are among the basic biological or physiological needs identified by Abraham Maslow in his “Hierarchy of Needs” motivational model.  It is not surprising then, that there are those who resort to fraud or identity theft to secure a job or place to live.  They may present with the name, Social Security Number (SSN), credit, employment and residence history of a friend… or that of a perfect stranger.   Either way, you are at considerable risk if you accept them – risk of credit loss or worse.  Applicant Authentication – Best Practice #7 Data returned in background checks or otherwise developed as part of the screening process, is of no value unless we are certain that the applicant is who they say they are.  The first step in the tenant or employee screening process, therefore, must be to confirm the identity of the applicant.  Human resource and property management... View Article

July 10, 2013 6:23 pm

Tenant Screening 101 – First Come-First Serve

When we think about tenant background checks, we tend to think in terms of screening a single application for a single rental unit.  Simple, right?  We take an application and collect a screening fee.  We conduct a tenant background check and either approve, approve conditionally or deny tenancy. But from time to time we are fortunate enough to have multiple applicants for the same rental unit.  What then?  Do we screen them all at once and “pick the best” – or do we screen them on a first come-first serve basis? Best Practice – Screen Applicants on a First come-First serve Basis Landlord tenant law often prohibits “…a landlord <from requiring> a fee or deposit from a prospective tenant for the privilege of being placed on a waiting list to be considered as a tenant for a dwelling unit”.  But the statutes may be silent or specifically allow collection of... View Article

June 19, 2013 8:10 pm

Private Landlords – A Target on Your Back?!

Adverse selection is a “term used in economics, insurance, risk management, and statistics.  In a rental housing context it translates into a propensity of people with a history (and therefore greater likelihood) of lease violations to find landlords who fail to adequately vet prospective residents. Professional property managers understand the importance of conducting thorough background checks and know that if they fail to do so, they are likely to pay a price in terms of resident profile, NOI and owner equity.  Plus, they have access to quality tenant screening products. Private landlords, however, may lack knowledge of leasing best practices and often lack access to quality tenant screening products.  High risk tenants know (or quickly learn) that their odds of being approved for tenancy are better among private landlords.  So guess what?  If you fail (intentionally or unintentionally) to thoroughly screen prospective residents – the market will reward you with... View Article

June 11, 2013 3:16 pm

Seattle Restricts Use of Criminal History for Employment Purposes – Creates New Protected Class!

Advocates may quarrel with that characterization, but the fact remains that this change to the Municipal Code (Chapter 14.17 – Use of Criminal History in Employment Decisions) offers specific protections to those with a criminal history – regardless of whether they are otherwise protected based on race, national origin, etc.  If it looks like a duck and quacks like a duck…. Specifically, the ordinance says: Employers shall not carry out a tangible adverse employment action solely based on an employee’s or applicant’s criminal conviction record or pending criminal charge, unless the employer has a legitimate business reason for taking such action. A legitimate business reason shall exist where, based on information known to the employer at the time the employment decision is made, the employer believes in good faith that the nature of the criminal conduct underlying the conviction or the pending criminal charge either: 1. Will have a negative... View Article