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VAWA Reauthorization Act of 2013 - Updated HUD Guidance - Notice H 2017-05

On June 30, 2017, HUD issued Notice H 2017-05, Violence Against Women Act (VAWA) Reauthorization Act of 2013 - Additional Guidance for Multifamily Owners and Management Agents. This notice provides guidance to owners and management agents (O/As) of HUD multifamily assisted housing on the requirements of VAWA 2013. The notice supersedes Housing Notices H 2010-23 and H 2009-15. The notice is applicable to the operation of the following programs: Project-based Section 8 programs under the United States Housing Act of 1937; New Construction State agency financed Substantial rehabilitation Section 202/8 Rural Housing Services (RHS) Section 515/8 Loan Management Set-Aside (LMSA) Property Disposition Set-Aside (PDSA) Section 202/162 Project Assistance Contract (PAC); Section 202 Project Rental Assistance Contract (PRAC); Section 202 Senior Preservation Rental Assistance Contracts (SPRAC); Section 811 PRAC; Section 811 Project Rental Assistance (PRA) Section 236 (including RAP); and Section 221(d)(3)/(d)(5) Below Market Interest Rate (BMIR) Background On November 16, 2016, HUD published its VAWA Final Rule implementing the requirements of VAWA 2013. This notice expands on and clarifies the HUD Final Rule. Major changes for HUD Multifamily Housing programs include: Specifies "sexual assault" as a crime covered by VAWA in HUD-covered programs; Establishes new definitions (e.g., affiliated individual and sexual assault, and others) and revises previously defined terminology (e.g., bifurcate and stalking); Establishes new requirements for notification of occupancy rights under VAWA, and transmits a Notice of Occupancy Rights under VAWA, form HUD-5380; Establishes the requirements for creating an emergency transfer plan and for related record keeping and reporting, and provides both a model "Emergency Transfer Plan for Victims of Domestic Violence, Dating Violence, Sexual Assault, or Stalking," form HUD-5381, and an "Emergency Transfer Request for certain victims of Domestic Violence, Dating Violence, Sexual Assault, or Stalking, form HUD-5383; Revises requirements for documenting the occurrence of Domestic Violence, Dating Violence, Sexual Assault, or Stalking, and provides a new "Certification of Domestic Violence, Dating Violence, Sexual Assault, or Stalking, and Alternate Documentation," form HUD-5382; Where the O/A exercises the right to bifurcate a lease and the evicted or terminated tenant was the recipient of assistance at the time of bifurcation, establishes a new requirement for reasonable time periods during which a tenant who is a victim of domestic violence, dating Violence, sexual Assault, or stalking may remain in the unit while establishing eligibility under the current housing program or under another covered housing program, or seeking alternate housing; and Clarifies that O/As may establish a preference for victims of domestic violence, dating Violence, sexual assault, or stalking, but are not required to do so. Determining Who May Receive VAWA Protections VAWA protections cover applicants, tenants and assisted families (both women and men), as defined under program regulations for the covered housing. Guests, unassisted members, and live-in aides of a household are ineligible for VAWA protections that are available only to tenants. As a reasonable accommodation, a tenant can request VAWA protections based on the grounds that a live-in aide is a victim of domestic violence, dating violence, sexual Assault, or stalking. If qualified, the tenant may request an emergency transfer for the entire household, including the live-in aide. In cases where a guest or unassisted member is a victim, a tenant cannot be evicted or have assistance terminated based on the domestic violence, dating violence, sexual assault, or stalking of the guest or unassisted member. Determining Eligibility for VAWA Protections O/As may have to determine whether an adverse factor is a "direct result" of domestic violence, dating violence, sexual assault, or stalking. The law prohibits O/As from denying admission to, denying assistance under, terminating participation in, or evicting a tenant based on a adverse factor, if the adverse factor is determined to be a direct result of the fact that the applicant or tenant is or has been a victim of domestic violence, dating violence, sexual assault, or stalking. An adverse factor refers to any factor that can be used as a basis for denying admission or assistance, terminating assistance or participation in a program, or evicting a tenant. If a denial or termination is required by a federal statute, based on a particular adverse factor, the O/A must comply with that statute, even if the adverse factor is a direct result of domestic violence, dating violence, sexual assault, or stalking. For example, if an applicant is subject to a lifetime registration requirement as a sex offender, the O/A must deny the applicant admission, even if the sex offense(s) was (or were) a direct result of the fact that the applicant was a victim of domestic violence, dating violence, sexual assault, or stalking. The presence of an adverse factor may be due to an underlying experience of domestic violence, dating violence, sexual assault, or stalking. An adverse factor may be present during much of an abusive relationship, or it may present itself only when a victim is attempting to leave, or has left, the abusive relationship. Examples of when adverse factors might be a direct result of domestic violence, dating violence, sexual assault, or stalking include: Poor credit history - for example: Forcing a victim to obtain credit, including credit cards for the perpetrator s use; Using a victim s credit or debit card without permission; Selling the victim s personally identifiable information; Running up debt on joint accounts; Obtaining loans/mortgages in a victim s name; Preventing a victim from obtaining and/or maintaining employment; Sabotaging work or employment opportunities, or causing a victim to lose his or her job by physically battering the victim prior to important meetings or interviews; Placing utilities or other bills in a victim s name and then refusing to pay; Forcing a victim to work without pay in a family business, or forcing him or her to turn earnings over to an abuser; Job loss or employment discrimination due to status as a victim; Job loss or lost wages due to missed work to attend court hearings, seek counseling or medical care; and Hospitalization and medical bills the victim cannot pay or cannot pay along with other bills. Poor rental history - for example: Property damage; Noise complaints; Harassment; Trespassing; Threats; Criminal activity; Missed or late rental or utility payments; Writing bad checks to the landlord; and Early lease termination. Criminal Record - for example: Forcing a victim to write bad checks; Property damage; Theft; Disorderly conduct; Threats; Trespassing; Noise complaints; Family disturbance/trouble; 911 abuse; Public drunkenness; Drug activity (drug use of the selling of drugs); Crimes related to sex work; Failure to protect a child from a batterer s violence; Crimes committed by a victim in self-defense; and Human trafficking. Failure to pay rent - for example: The victim s injury or temporary incapacitation; The arrest of the only wage earning member of the household; Preventing the victim from obtaining and/or maintaining employment; Sabotaging work or employment opportunities; and Causing the victim to lose the victim s job. Determining When Adverse Factors Are a Direct Result of Domestic Violence, Dating Violence, Sexual Assault, or Stalking To trigger the direct result analysis, it is the responsibility of the applicant or tenant to: Inform the O/A that he or she is a victim of domestic violence, dating violence, sexual assault, or stalking, and Provide enough information for the O/A to make a determination regarding the adverse factor and that the adverse factor was the result of domestic violence, dating violence, sexual assault, or stalking. The O/A should consider the individual s statement and any supporting documentation in determining if an adverse factor was a direct result of domestic violence, dating violence, sexual assault, or stalking. If further information is necessary for this determination, the O/A may request additional supporting documentation. However, any request for additional documentation must: Be in accordance with the O/As policies or practices; Not require evidence of domestic violence (other than as permitted by the VAWA statute); and Comply with the VAWA confidentiality requirements. The O/A must make an objectively reasonable determination, based on all the circumstances, whether the adverse factor is a direct result of the fact that the applicant or tenant is or has been a victim of domestic violence, dating violence, sexual assault, or stalking. Certification & Documentation of Victim Status The "Certification of Domestic Violence, Dating Violence, Sexual Assault, or Stalking, and Alternative Documentation," form HUD-5382 may be used to document instances of domestic violence, dating violence, sexual assault, or stalking. This form supersedes the Multifamily Housing VAWA Certification form, JUD-91066, which is now obsolete. The HUD-5382 must be made available by the O/A in multiple languages, consistent with HUD s LEP guidance. The notice provides additional guidance on the type of documentation that may be required to demonstrate victim status. Acceptance of verbal statement - O/As are not required to ask for documentation when an individual presents a claim for VAWA protections. The O/A may choose to provide protection based solely on an individual s verbal statement. Requesting documentation - if the O/A chooses to require that an applicant document status as a victim of domestic violence, dating violence, sexual assault, or stalking, the O/A must make such request in writing. Simply providing the victim the certification form HUD-5382 does not constitute a written request for documentation. Time to Submit Documentation The O/A may require submission of documentation within 14 business days after the date that the request for documentation is made. Once a victim provides documentation, the O/A is "encouraged" to acknowledge receipt of the documentation in a timely manner. (Note - HUD will clarify this issue when next updating HUD Handbook 4350.3). Requests for Third Party Documentation of Victim Status The VAWA final rule prohibits an O/A from requiring the victim to provide third party documentation of victim status, unless: More than one applicant or tenant provides documentation to show he or she is a victim of domestic violence, dating violence, sexual assault, or stalking, and the information in one person s documentation conflicts with the information in another person s documentation, or Submitted documentation contains information that conflicts with existing information already available to the O/A. In the case of (a) or (b) above, applicants or tenants may submit any of the following to meet the third party documentation request: A document: Signed by an employee, agent, or volunteer of a victim service provider, an attorney, or medical or mental health professional from whom the victim has sought assistance relating to domestic violence, dating violence, sexual assault, or stalking, or the effects of abuse; Signed by the applicant or tenant; and That specifies, under penalty of perjury, that the professional believes in the occurrence of the incident of domestic violence, dating violence, sexual assault, or stalking that is the ground for protection and remedies under the VAWA final rule, and that the incident meets the applicable definition of domestic violence, dating violence, sexual assault, or stalking under federal law; or A record of a Federal, State, tribal, territorial, or local law enforcement agency, court, or administrative agency that documents the incident. At the discretion of the O/A, a statement or other evidence provided by the applicant or tenant. Timeframe to Respond Applicants or tenants must be given 30 calendar days from the date of the request to provide such documentation. If an applicant does not submit any third party documentation within the required time or submits documentation that does not meet the criteria in 1a, 1b, or 1c, above, the O/A may, but is not required to, accept that applicant or tenant s assertion (form HUD-5382 or verbal statement) of victim status for the VAWA protections. Denying VAWA Protections If the O/A requests, but does not receive, third party documentation, the O/A has the option to deny VAWA protections and must notify the applicant or tenant. If this results in one of the tenants being terminated from assistance, the O/A must hold a separate hearing for that tenant. Alternatively, the O/A may develop or follow an existing family break-up policy that may provide assistance to both persons seeking VAWA protections. VAWA Lease Addendum The Office of Multifamily Housing will soon issue an updated form HUD-91067, "VAWA Lease Addendum," which will include the additional provisions required in the final rule. The updated lease provisions will include updates regarding: Definitions; VAWA Protections; Documenting the occurrence of domestic violence, dating violence, sexual assault, or stalking; and Remedies available to victims. O/As must provide a new VAWA lease addendum (when issued) to all current households. This may be done at each household s next Annual Recertification (AR) or at another timely opportunity. All subsequent new move-ins must also receive the updated VAWA lease addendum. Notice of Occupancy Rights, form HUD-5380 O/As must issue the VAWA Notice of Occupancy Rights without changes to the core protections and confidentiality rights in the Notice. O/As must customize the Notice to reflect the specific program and specify the program operations that may pertain to or affect the VAWA Notice of Occupancy Rights. This may include additional language, so long as the language does not make changes to the core protections and confidentiality rights. Any added language cannot include additional requirements to receive VAWA protection. The VAWA Notice of Occupancy Rights, along with the certification form HUD-5382, must be provided to existing households, applicants, and new move-ins/initial certifications no later than each of the following times: For applicants - At the time the household is provided assistance or admission, and At the time the applicant is denied assistance or admission. For existing households - Through December 15, 2017, at each household s annual recertification (AR), and With any notification of eviction or termination of assistance, (but not with subsequent eviction or termination notices sent for the same infraction). If households have already had their AR for 2017 and they were not provided with the forms, the O/A must provide the forms to those households through other means no later than 12/15/17. A note or documentation must be made in the files of those tenants indicating when the forms were provided to the household. Note - while the VAWA Final Rule does not require an applicant/household to sign acknowledgement of receipt of the forms, it is strongly recommended that O/As document each tenant file in a way that demonstrates when the required documentation was provided. It is recommended that the files be documented each time the documents are provided. HUD also encourages O/As to post the VAWA Notice of Occupancy Rights and certification form on their websites and in public areas such as waiting rooms, community bulletin boards, and lobbies, where all tenants may view them. HUD assumes that by December 15, 2017, all current households will have received the required forms and O/As are not required to provide the notice and certification form at future ARs. Victim Confidentiality Any information submitted to an O/A, including the fact that an applicant or tenant is or has been a victim of domestic violence, dating violence, sexual assault, or stalking, must be maintained in confidence by the O/A. Employees of the O/A (or those who administer assistance on their behalf, e.g., contractors) must not have access to the information unless explicitly authorized by the O/A for reasons that specifically call for these individuals to have access to such information under Federal, State, or local law, and the O/A must not enter this information into any shared database, or disclose this information to any other entity or individual, except to the extent that disclosure is: Requested or consented to in writing by the victim in a time-limited release; Required for use in an eviction proceeding or hearing regarding termination of assistance; or Otherwise required by applicable law. The prohibition against entering this information into any shared database does not preclude the O/A from entering this information into a databases system used by the O/A that meets all requirements for securing sensitive personally identifiable information (PII). Communicating with the Victim Unless given permission by the victim to do so, the O/A must not leave messages that contain confidential information or refer to VAWA (e.g., asking the victim to come to the management office to pick up form HUD-5382) on the victim s voicemail system or with other individuals, including members of the victim s household. Leaving a voicemail requesting that the victim contact the O/A without reference VAWA is permissible. O/As should not send mail regarding the incident of domestic violence, dating violence, sexual assault, or stalking to the victim s address, if the perpetrator may have access to the victim s mail. O/As may determine the procedures for requesting documentation in writing on a case-by-case basis. For example, policies should state whether the applicant or tenant requesting VAWA protections is required to come to an office or other space that may be safe for the individual to receive the written request and that reasonable accommodations will be made as necessary. If the victim gives the O/A permission to contact him or her about the incident of domestic violence via mail, voicemail system, electronic mail, or other method approved by the victim, it is strongly recommended that this permission be obtained in writing. When discussing these matters directly with the victim, take reasonable precautions to ensure than no one can overhear the conversation. O/As may suggest - but cannot require - that the victim designate an attorney, advocate, or other secure contact for communications regarding the request for VAWA protections. Best Practices to Collect Information & Avoid Unintentional Disclosure Conduct the intake session in a private room, where the individual and staff person can talk without the risk of other staff or clients overhearing; Explain the O/As information sharing policies; Communicate to the individual which property management staff person is responsible for handling questions or complaints about confidentiality; Provide adequate time for the individual to review and sign forms; Post confidentiality notices in the management office and around the property; Ensure that relevant staff understand confidentiality policies; Post notices about the importance of maintaining confidentiality throughout the office; Direct staff to respond to third-party inquiries only after verifying that written client consent has been obtained; Clarify information sharing policies with referring/referral agencies and other service and business partners; Maintain distinct phone lines for certain purposes; Avoid using language referencing domestic violence in agency names, program name, organization names, and staff titles; Use a post office (PO) box to receive written correspondence; Serve individuals off-site as needed or when appropriate; Provide interpretation and/or documents translated into the appropriate language when necessary; and Provide accessible documents or assistance filling out forms for individuals with disabilities. It should be noted that these are best practice recommendations, and some may not be feasible for all O/As. Emergency Transfers - Note: this Notice contains requirements that are not specifically contained in the Model Emergency Transfer Plan provided by HUD Emergency Transfer Plan The VAWA Final Rule requires O/As to adopt an Emergency Transfer Plan, based on HUD s Model Emergency Transfer Plan (form HUD-5381). O/As must have adopted an Emergency Transfer Plan no later than June 14, 2017. For Management & Occupancy Reviews (MORs) conducted after June 30, 2017, but before December 14, 2017, reviewers will issue a Recommendation, rather than a finding, for non-compliance relating to the Emergency Transfer Plan. For MORs conducted after December 14, 2017, a Finding will be issued for non-compliance relating to the Emergency Transfer Plan. I recommend that all O/As carefully review the Emergency Transfer Plan requirements of this notice and revise Emergency Transfer Plans to ensure the Plans contain all elements required by the notice. Internal Transfers (moving to a unit in the same project) The Emergency Transfer Plan must allow tenants who are victims of domestic violence, dating violence, sexual assault, or stalking to make an internal emergency transfer with a safe unit is immediately available. A victim determines whether a unit is safe. A best practice is to define "immediately available" as a vacant unit, ready for move-in within a reasonable period of time. It is up to the O/A to define "reasonable period of time." The Plan must describe policies for assisting a tenant in making an internal emergency transfer when a safe unit is not immediately available, and describe reasonable efforts the O/A will take to assist a tenant who wishes to make an external emergency transfer when a unit that meets the victim s safety standard is not available. O/As are encouraged to review their transfer waiting list policies in their Tenant Selection Plans in order to facilitate emergency transfers. The emergency transfer requirements do not supersede any eligibility or occupancy requirements that may apply under a covered housing program. External Emergency Transfers (moving away from the project to another project) O/As are required to make reasonable efforts to assist a tenant who requests to make an external emergency transfer when a safe unit at the current property is not immediately available. O/As are not required to research available units and/or arrange for the move, but they can if they choose. Efforts should include providing contact information for relevant local service providers, government agencies, and other affordable housing developments in the area. Emergency Transfer Plans must include the following: A description of the reasonable efforts the O/A will take to assist a victim who wished to move to alternative housing, if a safe unit is not immediately available; A statement that a tenant must be allowed to seek an internal and external emergency transfer concurrently if an internal safe unit is not immediately available; and Policies for both assisting a tenant/applicant who is seeking an external emergency transfer under VAWA out of the property and an applicant who is seeking an external emergency transfer under VAWA into the property from another property. Record Keeping & Reporting Requirements The VAWA Final Rule requires that requests and outcomes of VAWA requests be reported to HUD annually. HUD plans to add these data elements to a future release of the Tenant Rental Assistance Certification System (TRACS). The following items should now be tracked to assist in reporting when the TRACS system is updated: Number of emergency transfer requests received; Number of requests resolved; Number still pending; Outcomes of requests - Number of internal unit transfers (within same project); Number relocated to other HUD-funded housing sites (e.g., other multifamily assisted, public housing/housing vouchers/ or HOME); Number of other move-outs; and Number of tenants who chose to remain in unit. The requirement to report this information in not in effect until TRACS has been updated. HUD will communicate additional details at a later date. Tips When Bifurcating a Lease VAWA permits owners (when otherwise allowed by State or local laws) to "bifurcate" a lease in order to remove a perpetrator from a unit while permitting the victim to remain in the unit. While it may be a necessary step to protect victims of domestic violence, dating violence, sexual assault, or stalking, bifurcation may also result in family break-up. The HUD notice provides extensive guidance relating to family break-ups, and based on that guidance, I offer the following tips. If a victim informs the O/A that a family member is committing domestic violence against him or her and he or she wishes to remain in the unit, the following steps are recommended: The O/A should already have provided the household members with their VAWA rights, but if not, this should be done immediately. Even if the victim was previously informed of his or her rights under VAWA, the O/A is again encouraged to provide the victim with the VAWA Notice of Occupancy Rights and certification form; Accept the victim s statement or request permitted documentation; Ensure the victim knows of the upcoming notification of eviction of the perpetrator, including the exact date the notification will take place. At the same time, provide the victim with contact information for local victim service providers (the victim may need to leave the unit temporarily and stay in a domestic violence shelter until the eviction takes place); Begin the eviction process. If the victim wants to move out of the unit for his or her safety, follow the requirements of the Emergency Transfer Plan. If the victim wants to stay in the unit, the O/A should bifurcate the lease by evicting the perpetrator and allowing the victim to remain on the lease. An Interim Recertification (IR) should be conducted to determine the new rent (this is required due to the change in family composition); If the perpetrator requests a hearing, the O/A is encouraged to conduct an expedited hearing within no more than ten days following the effective date of the notice. The perpetrator has a right to examine the O/As documentation relevant to the eviction. This means the perpetrator has a right to examine the relevant documentation the victim provided when claiming VAWA protections. This is an exception to the victim s confidentiality rights). To protect the victim s safety, any information that would reveal the location of the victim, or the location of any services that the victim is receiving must be maintained confidentially (i.e., redacted from the shared documentation), unless it meets the exceptions noted in the law. O/As are encouraged to consult with local domestic violence experts or victim service providers (that have not worked with either the victim or perpetrator) to serve on the grievance hearing panel; If it is determined that the perpetrator did indeed commit the acts, the case will then be moved to eviction court; and If the eviction is upheld, the O/A processes the IR to remove the household member and completes the bifurcation of the lease agreement. Remember, VAWA protections, including bifurcation, do not apply to guests or unreported members of a household or anyone else living in a unit who is not a tenant. Eviction, removal, termination of occupancy rights, or termination of assistance must be done in accordance with the procedures prescribed by federal, state, or local law. Some jurisdictions may prohibit partial or single tenant evictions. Once a lease is bifurcated, it becomes null and void once the O/A regains possession of the unit. The O/A should then execute a new lease with the victim. Note - as a result of lease bifurcation, it may be necessary to transfer the existing household to an appropriate size unit in accordance with the lease. Establishing Waiting List Preferences O/As may establish an admission preference for victims of domestic violence, dating violence, sexual assault, or stalking. HUD approval is not required to adopt such a preference, but O/As must modify their Tenant Selection Plan to include the owner-adopted preference. This synopsis provides a summary of some of the major elements of the new HUD notice. The notice itself is very comprehensive and all O/As of covered properties should obtain and review the notice in detail. In order to avoid potential non-compliance with VAWA requirements, all O/As should have VAWA procedures in place and fully understood no later than December 14, 2017.

Owner and Agent Responsibilities When Using Consumer Reports

Owner and Agent Responsibilities When Using Consumer Reports Property owners who use background checks to screen potential residents must comply with the Fair Credit Reporting Act (FCRA) and the Federal Trade Commissions (FTC) Disposal Rule. Any report that contains information about a person s credit, rental history, or criminal history is considered a consumer report. These reports are generally prepared by a credit-reporting agency (CRA). Examples of such reports include: A credit report from a credit bureau, such as Trans Union, Experian, and Equifax; A report from a tenant screening service; A report from a reference checking service; and A report from a background check company about the criminal history of an applicant or resident. Owners may obtain consumer reports on persons who apply to rent housing or renew a lease. In order to request such reports, the owner must have written permission from the subject of the report, and the report may only be used for legitimate business purposes. Anytime an "adverse action" is taken against a person due to a consumer report, certain steps must be taken. An adverse action is any action by an owner that is unfavorable to the interests of a rental applicant or tenant. Examples include: Application denial; Requiring a lease co-signer; Requiring a higher than normal security deposit; and Charging higher rent than that charged for other residents. When an adverse action is taken due to information on a consumer report, the person must be given notice of the action either orally, in writing, or electronically. This notice must include: The name, address, and phone number of the consumer reporting company that supplied the report; A statement that the company that supplied the report did not make the adverse decision and cannot give specific reasons for the decision; and A notice of the person s right to dispute the accuracy or completeness of any information in the consumer report, and their right to obtain a free report from the company if requested within 60 days. The adverse action notice is required even if information in the consumer report was not the primary reason for the adverse decision. As mentioned above, oral notices are allowed. However, I strongly recommend that written notices be provided, since this will provide proof of FCRA compliance. Some owners obtain "investigative reports," which are reports based on personal interviews concerning a person s character, reputation, personal characteristics, and lifestyle. If such reports are obtained, there are additional requirements. These include (1) giving written notice that you may request or have requested an investigative consumer report; and (2) provide a statement that the person has a right to request additional disclosures and a summary of the scope and substance of the report. These requirements are covered under 15 U.S.C. 1681d(a) and (b) and are very strict. Landlords rarely use reports of this type and they are not generally recommended.   Disposal of Consumer Reports The FTC Disposal Rule ("Disposal Rule" of the Fair and Accurate Credit Transactions Act of 2003, known as the FACT Act, 69 Fed. Reg. Reg. 68690) requires that when you are done using a consumer report, the report, and any information obtained from it, must be securely disposed of. Any business or individual who uses a consumer report for a business purpose is subject to the requirements of the Disposal Rule. Under federal law, landlords must take special care that consumer reports are stored in a secure place where only those who "need to know" have access. In addition, landlords must carefully dispose of consumer reports when they are done with them. Disposal can include burning, shredding or pulverizing paper reports and destroying or erasing electronic files. This portion of the FACT Act was passed in order to deal with increasing identity theft. It applies to every landlord who obtains a consumer report, no matter how small the rental operation may be. Recommendations for Handling Consumer Reports Maintain applicant, tenant, and employee files in a locked cabinet. Only employees who need to know the information should have access to the files. Develop a policy regarding the point at which a consumer report is no longer needed. The Act requires that the reports, and any information obtained from them, be disposed of when they are no longer needed. Many landlords are unaware of this requirement. The question for landlords is "When is the report no longer needed?" Such reports may be essential in refuting a fair housing claim, and under federal law, such claims must be filed within two years of the claimed discrimination, but some states set longer periods. I recommend that the credit reports be retained for at least two years after a resident moves in, but check with your attorney before actual disposing of the records. Establish a system for destroying old consumer reports. Establish a purge date for every applicant for whom a consumer report is pulled and set up a tickler system to remember the deadline. Choose an effective disposal system. The Disposal Rule requires you to choose a level of document destruction that is reasonable in the context of your business. For example, a landlord with a few rentals is probably fine with an inexpensive shredder, but a multi-property operation may want to contract with a disposal service. Decide how to deal with computer files. Reports stored on your computer, BlackBerry, IPhone, or other device, or information derived from them, must also be kept secure and deleted when no longer needed. There are utility programs that can completely remove, or "wipe" the data; such programs remove not only the directory, but the text as well. The Disposal Rule has significant penalties for landlords who willfully disregard the law - i.e., those who know the law but refuse to follow it. Landlords may be liable for a tenant s actual damages (e.g., the cost of covering a portion of a credit card s unauthorized use), or damages per violation of $100 to $1,000, plus attorney s fees and costs of suit, plus punitive damages. The FTC and state consumer agencies can also enforce the Act and impose fines. The key for landlords is to develop a company-wide disposal plan and make sure all properties are aware of how it should be implemented. While enforcement actions in this area of law are rare, it is still a good practice to ensure the security of applicant/tenant information.

Zero Income Households - Steps Recommended for Management

Zero income households are an area of both concern and irritation for affordable housing managers (such households can only exist in units that receive rental assistance). Applicants or existing households sometimes claim to have no income from any source. When this happens, managers have every right - in fact they have a duty - to be skeptical. During management reviews, HUD auditors take a very hard line on such households and carefully scrutinize such claims. If HUD determines that an owner/agent (O/A) has not been diligent in determining potential income, HUD may require that the owner reimburse the government for excess subsidy. There are five important steps that should be taken by management anytime a household claims to have no income. It is possible that a household may end up with a zero-income certification due to excluded income and/or deductions from gross income. Families may also have zero income for temporary periods. Many applicants will be totally unfamiliar with the HUD definition of income and may actually believe they have no income. It is the job of a professional housing manager to inform all applicants that all income must be reported, and to provide examples of what counts as income. Exhibit 5-1 of HUD Handbook 4350.3 may be used in providing such examples. Applicants should be informed of all income that may be included for HUD purposes. However, I do not recommend reviewing the list of excluded income with applicants. Require that they provide all sources of income, and then decide what types of income may be excluded. It is especially important to remind prospects that money other than employment must be counted, including government benefits and family gifts. Ask members how they plan to make ends meet - how will they survive from day-to-day? How will expenses such as food, transportation, and toiletries be covered? Remind them that food stamps provide only food and are not accepted for other necessary items of daily living. Even doing this will not keep some households from claiming no income. They may claim to get gifts on an as-needed basis from friends and family. In this case, managers should complete a current expense analysis in a spreadsheet. Require that the household list all current expenses, determine the status of each expense, and compare this to the reported income. Any discrepancies must be resolved. Send verification forms to government agencies. Have a policy that requires that these additional levels of verification be requested for all households reporting zero income and explain this policy to the applicant. This policy should require that no-income claims be verified with several agencies, including the Social Security Administration and local welfare agencies, including child support agencies. Management should maintain a list of the most common sources of government payments and use that list to collect information on any adult household member who claims no income. To avoid discrimination claims, make sure verification forms are sent to each agency for anyone claiming no income. If no income is found, and if the property is federally assisted (e.g., HUD or Rural Development), perform a re-interview of the household at least every 90-days. A court case (Thompson v. Housing & Redevelopment Authority of Duluth, October 2013) upheld the right of an owner to conduct monthly recertification meetings of a zero-income household. The housing authority had approved the resident s application and issued a voucher, subject to its rule that voucher recipients claiming no income must appear in person each month to recertify their zero income status. The resident repeatedly failed to appear at monthly recertification meetings, requested many schedule changes, failed to appear at rescheduled meetings, and attempted to recertify by mail. The resident had argued that the monthly meetings were an "impossible burden." The court stated that the fact that the resident appeared in person on two occasions demonstrated that doing so was not "impossible" in a legal sense. The court indicated that while the burden may have been "heavy," it was not impossible, and therefore the decision to terminate the resident s voucher was not arbitrary. The court also stated that accurate reporting of financial data is a legitimate objective of federal housing policy. The housing authority argued that in-person interviews may enhance accuracy because a recipient is less likely to lie when face-to-face with a housing authority representative and because the representative can ask follow up questions to test the recipients veracity and credibility. Require household members to sign affidavits certifying that they are not employed and have no income, including a statement regarding how household expenses are met. This statement should be made under penalty of perjury. Finally, remember to keep a record of all actions taken during the interview process, and be able to show that the procedures are applied consistently to all applicants reporting zero income.

Combining the Low-Income Housing Tax Credit with Assisted Living Developments

Combining the Low-Income Housing Tax Credit with Assisted Living Developments Low-Income Housing Tax Credits (LIHTC) may not be used to develop hospitals, nursing homes, sanitariums, life-care facilities, or mobile home parks. The General Explanation of the Tax Reform Act of 1986 (the "Blue Book") states, "Residential rental units must be for use by the general public and all of the units in a project must be used on a non-transient basis. Residential rental units are not for use by the general public, for example, if the units are provided only for members of a social organization or provided by an employer for its employees. Generally, a unit is considered to be used on a non-transient basis if the initial lease term is six months or greater. Additionally, no hospital, nursing home, sanitarium, life-care facility, retirement home providing significant services other than housing, dormitory, or trailer park may be a qualified low-income project." In addition, the Blue Book states, "unlike the requirements for units in projects financed with tax-exempt bonds, certain single room occupancy housing used on a non-transient basis may qualify for the credit, even though such housing may provide eating, cooking and sanitation facilities on a shared basis." Private Letter Ruling (PLR) 9740007 applied to tax-exempt projects, but gives good guidance on what constitutes assisted living. While a PLR cannot be cited as precedent, they are often indicative of IRS thinking on a particular issue. In this case, the Service stated that a key distinction is whether the facility provides residences for individuals or bed-space in a health care facility. The PLR indicated, "health care facilities may be characterized by certain common qualities:" They are regulated by the appropriate health department of a state as a health care institution; They specifically accentuate the availability of immediate medical services to and/or the care of persons being serviced; The laws of the state and/or the regulations and rules of that states health department specify numerous procedures, measures and standards pertaining to both medical treatment of residents and requirements for the staff; and The required treatment of the residents/patients is far beyond a landlord/tenant relationship that may limit use by the tenant or may require the landlord to provide amenities such as food and laundry services. In outlining these elements, the IRS made clear that no individual criteria is determinative; all factors should be considered in determining whether a facility is a health care facility or residential rental property. In PLR 8945036, the IRS opined that an independent living facility may be residential rental housing as long as it does not provide professional nursing or medical care, except for emergency medical services. In the case of the project subject to the PLR, the facility had common dining, cooking, and recreation areas. Optional services included Meals, housekeeping, and laundry services; Assistance in bathing and dressing (as needed); Local transportation; Assistance with the taking of medication (if needed); and General supervision. No professional nursing care or doctors were provided. This facility was considered by the IRS to be a residential rental development, and not a medical facility. In another PLR (8944042), the presence of emergency medical services did not prevent the designation of the facility as residential rental housing. Another key element of this PLR was that services other than typical residential services were optional and the rents for residential services were within the Section 42 limits. Care must be taken when layering LIHTCs with an assisted-living facility, especially with regard to the services offered and whether non-residential services impose a mandatory fee. The most recent IRS guidance in this area is Revenue Ruling 98-47, which uses a three-building retirement complex as an example of what does and does not constitute residential rental housing. Two of the buildings provide comprehensive non-housing services, including housekeeping, daily meals, planned activities, regular transportation, and emergency call services. There were no continuous or frequent medical services. The third building provided all of the same services as the other two, but also provided frequent and continual medical services. The ruling indicates that the first two buildings are residential rental housing and the third was a health care facility. Assisted Housing & Rents Gross rent for LIHTC purposes excludes any fee for a supportive service that is paid to an owner on behalf of a low-income tenant by any government assistance program or a Section 501(c)(3) tax-exempt organization. The program must provide rental assistance and the assistance must not be separable from assistance for other supportive services, not related to housing. "Supportive Service" defined: any service under a planned program of services designed to enable residents of a residential rental property to remain independent and avoid placement in a hospital, nursing home, or intermediate care facility for the mentally or physically disabled. In the case of Single Room Occupancy (SRO) housing for the homeless, the term includes any service that assists tenants in locating and retaining permanent housing. A key element with regard to rents is whether the charges are "optional" or "mandatory." Treasury Regulation 1.42-11(b)(i) indicates that a service is optional when the service is not a condition of occupancy and there is a practical alternative. g., if meal and housekeeping services are offered, residents must be able to refuse and there would have to be cooking facilities for the resident and a nearby grocery store. There would also have to be an onsite laundry for residents or a nearby Laundromat. Non-optional or mandatory services must be included in the gross rent. Recommended Documentation There should be a separate lease and Service Agreement. The Service Agreement outlines the fees for assisted living services and should make clear that they are optional. It should also have a section where the resident acknowledges that the services are optional. The lease should cover only the traditional residential services and the cost of those services. A Discussion of Continual or Frequent Services Treasury Regulation 1.42-11(b)(2) states "if continual or frequent nursing, medical or psychiatric services are provided, it is presumed that the services are not optional and the building is ineligible for the credit, as is the case with a hospital, nursing home, sanitarium, life care facility, or intermediate care facility for the mentally or physically handicapped." This language is crucial in that it indicates that even if services are optional, if such medical services are continuous or frequent, the facility will not be considered credit eligible. The truth is, LIHTCs and assisted housing are not a perfect match. It takes a great deal of careful planning and a full understanding of the market needs to successfully combine the two. Of all the issues to be considered, developers should always keep in mind fees and charges and the types of services to be provided. These are the areas that present the most risk to this type of property in terms of whether it will pass muster with the IRS as a residential rental housing project.

Building a Case Against Unauthorized Occupants

Dealing with unauthorized occupants is a troublesome issue for many affordable housing managers, but due to the requirements of affordable housing programs such as Section 8 and the Low-Income Housing Tax Credit (LIHTC), knowing who is living in a unit is critical. In subsidized programs such as Section 8, unauthorized occupants can be both a rent and an eligibility issue, while for LIHTC projects, the issue is eligibility. The results of a recent court case from New Jersey (Mansions Apartments v. Husband - April 2017) can be instructive in assisting managers in their understanding of the type of evidence that may be required to prove a case of unauthorized occupancy. Facts of the Case The resident (Husband) moved into the Section 8 project in 2007, occupying a one-bedroom apartment as the sole occupant. All rent was paid by Section 8 subsidy; On March 24, 2015, the landlord issued a "notice to cease" citing multiple violations, including "harboring a female unauthorized occupant, Michelle Dea, in the leased premises." The landlord issued a "Notice Terminating the Lease" on April 27, 2015 for failure to comply with the prior notice to cease. At this point, the harboring of "three other adult unauthorized occupants and multiple children" was also noted. The resident was given until May 31, 2015 to vacate the unit. The resident refused to vacate and a trial was held on July 9, 2015. Both the manager and maintenance technician from the property testified on behalf of the landlord; the defendant testified on her own behalf. The manager testified that Dea sought to lease her own unit and provided her driver s license as identification. The license listed the defendant s unit as Dea s address, and Dea stated that she "lived with a friend". This is what prompted the "notice to cease." The manager stated that she observed Dea "coming and going" at "all different times of the day," including weekends. The manager also testified that she saw "numerous children" and an adult male and other females at the unit. The manager did acknowledge that Dea s mother and daughter lived at the complex. The Maintenance Tech testified that he observed Dea entering and leaving the unit on a daily basis. The defendant s testimony included the following elements: She insisted that Dea never lived in the unit, but that she had spent the night once two years earlier; She stated that Dea visited two to three times per month, but then changed that to two to three times per week. Many other elements of the testimony were inconsistent.   Ruling of the Court The trial judge noted the inconsistencies in Husband s testimony and called the testimony "a fabrication," and that he found her to be "completely unbelievable, incredible, and not telling the court the truth." On the other hand, he found the manager s testimony to be "completely credible," "uncontroverted," and supported by the Maintenance Technician. The judge indicated that the driver s license showing the defendant s address, along with the testimony by staff established the unauthorized use of the unit and he granted the landlord possession and denied the defendant s request for a stay pending appeal. On August 5, 2015, the defendant filed a motion seeking a stay for hardship reasons and on August 15, the motion judge granted the stay and removal from the unit was put on hold. Motion for Reconsideration On August 12, 2015, the defendant filed a motion for reconsideration, insisting that Dea did not live with her and Dea filed a certification stating that she did not live with the resident. She further stated that her license was copied when she applied for a unit at The Mansions and that management failed to produce the copy because it would not show the address of the defendant. Dea provided copies of documents listing her name and an address in another city, but the driver s license was not one of the documents. The defense also argued that when management accepted rent for June and July 2015, which was after the termination date of May 31, a new tenancy was created. The motion judge denied the request for reconsideration and the defendant was locked from the apartment. The defendant appealed. The Appeal The landlord provided documentation that after the May 31 termination date, HUD subsidy funds on behalf of the defendant were not accepted and were in fact returned to HUD. The court was not persuaded by the defendant s argument that seeing Dea "coming and going" in the vicinity of Husband s apartment did not prove residency in the apartment and that failure to show a copy of the driver s license should defeat the assertion that the address shown on the license was that of the defendant. The appeals court deferred to the judgment of the trial judge, since it was reasonable and supported by "adequate, substantial and credible evidence." The court also ruled that acceptance of rent after the May 31, 2015 termination date was not relevant, since nonpayment of rent was not the issue - unauthorized occupancy was. The court stated, "Unlike [non-payment of] rent, however, which can be cured retroactively, not all cases for eviction can be completely cured." Finding The appeals court found no error in the original trial and upheld the judgment of possession. The lesson for owners and managers from this case is that landlords can prevail in cases involving unauthorized occupancy. However, in order to do so, managers must carefully build the case for eviction. Eyewitness testimony, corroboration, and contemporaneous documentation are critical elements when attempting to prove unauthorized occupancy. Once it is suspected that a unit contains an unauthorized occupant, landlords should carefully prepare the case through observation and documentation. As noted in this case, which took nearly two years, prevailing in such cases may take time, but gaining possession of units due to unauthorized occupancy is possible.

Fees for Assistance Animals - Settlement Agreement, June 2017

On June 9, 2017, HUD entered approved a settlement agreement between a Nevada fair housing organization and the owner and manager of four apartment complexes in Reno, NV. The agreement settles allegations of housing discrimination against disabled residents with assistance animals. The case came to HUD s attention when the Silver State Fair Housing Council filed four complaints against the owner and manager of Silver Lake Apartments, Vale Townhomes, Oak Manor Apartments, and Angel Street Apartments. The complaints alleged that ERGS, Inc. and Silver Lake Apartments, LLC discriminated against prospective tenants who required assistance animals by requiring these applicants to pay a pet deposit fee. Under the conciliation agreement, ERGS, Inc. will pay Silver State Fair Housing Council $20,500. ERGS, Inc., and Silver Lake Apartments, LLC will also adopt written policies that are consistent with the Fair Housing Act and provide fair housing training for all employees who interact with tenants or applicants. This case reiterates the importance of understanding the difference between "pets" and "assistance animals." While deposits for pets may be required, there is no authority to charge a fee or deposit of any kind for a disabled person needing an assistance animal. Owners and managers should review their policies and procedures to ensure that disabled residents are not facing monetary requirements relative to assistance animals.

Social Security Enhanced Security for Obtaining SS Information

Beginning June 10, 2017, the Social Security Administration (SSA) will add a second method to check the identification of anyone signing onto their "My Social Security" account. This will be in addition to the first layer of security, the account holders username and password. This will affect residents of properties that required verification of Social Security income and managers of such properties should make their residents aware of the changes. First, it is recommended that management encourage residents to set up a "My Social Security" account online with the SSA, and remind them to safely store their username and password. Also, this information should not be shared with anyone - including the manager of the property. When signing in to their accounts on or after June 10, they will be able to choose either their cell phone number or their email address as the second method of identification. The SSA has put this procedure in place to better protect accounts from unauthorized use and potential identity fraud. Since My Social Security became available in May 2012, more than 30 million people have created accounts. In the past, the SSA offered a second layer of protection only for customers who opted to use it. In the summer of 2016, the SSA added a second way to track identity when someone registered or signed into an account. However, at that time, the SSA only permitted the use of a cell phone as the second identification method. They quickly learned that many people do not have cell phones and as a result have implemented this new procedure. Since an email address is already required to use My Social Security, anyone should be able to utilize this new security layer. Each time an account holder signs into their account, they will complete two steps: Enter username and password; and Enter the security code sent by the SSA. The code will be sent either by text message or email, depending on the choice of the account holder. This will be a one-time code and a new code will be sent each time the account is signed into. Managers should inform residents of this new procedure and should also ensure that the management office email is not used as the email address to receive the code.

Equal Access to Housing for HUD Assisted Housing Projects

Equal Access to Housing for HUD Assisted Housing Projects As many managers of HUD-Assisted properties already know, HUD prohibits discrimination against individuals based on their gender identity. HUD published a final rule entitled "Equal Access in Accordance with an Individual's Gender Identity in Community Planning and Development Programs" on September 21, 2016. This rule built upon HUD's February 2012 final rule entitled "Equal Access to Housing in HUD Programs Regardless of Sexual Orientation or Gender Identity." These rules apply to all owners, operators, and managers of shelters, and other buildings and facilities as well as providers of services funded in whole or in part by any CPD program. Now that managers of HUD-assisted properties of any type must ensure non-discriminatory actions when dealing with Lesbian/Gay/Transgendered/Bisexual (LGBT) individuals, it is important to understand various terms that are relevant to gender identity issues. Use of terms or phrases in an inappropriate way could lead a housing applicant or tenant to believe that you are discriminating against them. HUD recently provided information on various terms and definitions that managers and operators of HUD-assisted properties should be familiar with; here are some of those terms: Transgender: Umbrella term for people whose gender identity is different from their assigned sex. Sometimes an individual may determine they no longer identify as transgender after they transition. Transitioning (Gender Transition): A process that some (but not all) transgender people go through to begin living as the gender with which they identify, rather than the sex assigned to them at birth. Transitioning does not necessarily require medical procedures. Gender Identity: Internal or innate sense of being male, female, or another gender; it may or may not match the assigned sex at birth. Gender Expression: External expression of gender identity (be aware that many times people do not feel they can safely express their gender identity), exhibited through behavior, clothing, hairstyle, body language, and voice. Sexual Orientation: Physical or emotional attraction to the same and/or opposite sex; this is distinct from one s gender expression or identity. Sexual orientation includes gay, lesbian, bisexual, straight, asexual, and questioning. Generally, the term "homosexual" should no longer be used. Non-Binary Identity: This is also known as "genderqueer," and is a relatively new term describing an individual whose gender does not fit within the male-female spectrum. Non-binary/genderqueer individuals do not identity as male or female, and are not the same as transgender. Intersex: This is an umbrella term that describes people who have (were born with) natural variations that differ from conventional ideas about "female" or "male" bodies. Such natural variations may include genital and chromosomal, as well as a range of other physical characteristics. Intersex should not be confused with transgender. An out-of-date and offensive term used in the past for this condition was "hermaphrodite." Sex Reassignment Surgery (SRS): This is a surgical procedure to transition an individual from one biological sex to another. SRS is often combined with hormone treatment and psychological assistance prior to and/or following surgery. SRS is a term that is preferred over "sex change operation." Not all transgender people choose to or can afford to have SRS. These terms, and the rules relating to providing equal access to housing for LGBT persons may be confusing to owners and managers, but it is a requirement. Operators of HUD-assisted programs must become familiar with the rules relating to equal access and should have a working knowledge of LGBT vocabulary.