$5,650 Settlement in First Landlord-Tenant Case under the Servicemembers Civil Relief Act

Here is another example of a recent legal case involving a real estate issue. I try to post case summaries in order to provide timely updates to real estate professionals on important issues.

On September 24, 2009, the United States Department of Justice (“DOJ”) announced that it had reached a settlement with a Virginia landlord to resolve allegations that she violated the Servicemembers Civil Relief Act (“SCRA”). The lawsuit alleged that the landlord failed to return prepaid rent and security deposits to a tenant who had terminated her lease early in order to comply with military orders to relocate to Georgia.

The SCRA provides certain protections to active duty servicemembers who must terminate residential leases to comply with military orders for a permanent change of station or for deployment. The lawsuit represented the first lawsuit involving a landlord-tenant matter brought by the DOJ under the SCRA.

The tenant in this lawsuit, Colonel Debra Bean, was a highly decorated member of the armed forces. Colonel Bean currently serves as Vice Commander for the 78th Air Base Wing at Robins Air Force Base in Georgia.

On June 11, 2007, Colonel Bean and her husband signed a two-year lease for a home in Fairfax, Virginia. Under the terms of the lease, the monthly rent was $3,000, payable on the first day of each month beginning with July 1, 2007. The Beans also gave the landlord a $3,000 security deposit and a $500 pet deposit. Under the terms of the lease, the Beans had the right to terminate the lease if Colonel Bean was transferred more than thirty-five miles from the rental home by the United States Air Force. In the event of early termination, the lease required the Beans to pay a $1,500 early termination fee.

Also under the terms of the lease, the landlord was required to, within thirty days after the termination of the tenancy, provide the Beans with a statement, if applicable, showing all charges paid against the Beans’ $3,000.00 security deposit, and return to the Beans any remaining amount of the security deposit not used for repairs and/or unpaid rent and utilities.

The Beans moved into the rental home on July 1, 2007. They made all rent payments in a timely manner from July 1, 2007, through May 2008.

On April 14, 2008, Colonel Bean received permanent change of station orders from the United States Air Force transferring her from the Pentagon to Robins Air Force Base in Robins, Georgia. Under the terms of the orders, Colonel Bean was required to report for duty at Robins Air Force Base by no later than May 30, 2008.

On May 12, 2008, Mr. Bean sent a certified letter to the landlord informing her that his family intended to move out of the rental home on June 19, 2008. Included with Mr. Bean’s letter was a check for $1,900 for rent for the time period from June 1, 2008, to June 19, 2008, a second check for $1,500.00 for the early lease termination, and a copy of Colonel Bean’s permanent change of station orders.

The Beans moved out of the house on June 19, 2008. On June 27, 2008, the landlord sent the Beans a message in which she stated that she had visited the rental home and noted that everything looked fine at the property. Nevertheless, the landlord refused to return the Beans’ $3,000 security deposit and $500 pet deposit.

After the landlord refused to return the security deposits, the Beans were forced to pursue their rights under the SCRA. This case was handled on their behalf by the DOJ.

Under the terms of the settlement, the landlord was required to pay $5,650 in damages to the Beans and was enjoined from engaging in future violations of the SCRA. The landlord must also undergo SCRA training and submit compliance reports to the government.

Source: U.S. Department of Justice press release (portions of press release used with permission)

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FRIDAY FUNNY -- Terry Tate: Office Linebacker

I just rediscovered the very funny Terry Tate: Office Linebacker videos, which were a series of short television commercials from a few years ago. If you’ve ever worked in an office environment, and I know that many of you have, then you’ll really appreciate how Terry Tate enforces office policies and rules. I wish that Terry had worked in my office to help with all of the people who just can't seem to follow common office courtesy. Every office needs a Terry Tate!

Enjoy!

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To learn about a variety of real estate topics, please visit us at www.123ConEd.com. We are the leading online provider of Michigan online real estate con edu. All of our courses are fully approved and properly certified by the State of Michigan, and are offered online. DELEG Sponsor No. 373.

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Types of Discrimination Against Persons with Disabilities Prohibited by the Fair Housing Act

The goal of the Fair Housing Act is to ensure “no person shall be subjected to discrimination because of race, color, religion, sex, handicap, familial status or national origin in the sale, rental or advertising of dwellings, in the provision of brokerage services, or in the availability of residential real-estate related transactions.” With respect to people with disabilities, the Act serves to:

• Give people with disabilities opportunities to choose where they want to live;

• Assure that reasonable accommodations and reasonable modifications are made so that a person with a disability can secure and use housing as fully as a person without a disability.

• Assure that persons with disabilities are able to live free from intimidation and harassment; and

• Require that multi-family housing built for first occupancy after March 13, 1991, has certain accessible features (e.g., a usable kitchen for a person who uses a wheelchair).

The Fair Housing Act prohibits housing providers from discriminating against applicants or residents because of their disability or the disability of anyone associated with them and from treating persons with disabilities less favorably than others because of their disability. The Act also prohibits housing providers from refusing residency to persons with disabilities, or, with some narrow exceptions, placing conditions on their residency, because those persons may require reasonable modifications or reasonable accommodations.

With respect to reasonable accommodations and reasonable modifications:

• The Act makes it unlawful for any person to refuse “to make reasonable accommodations in rules, policies, practices, or services, when such accommodations may be necessary to afford . . . person(s) [with disabilities] equal opportunity to use and enjoy a dwelling.”

• The Act makes it unlawful for any person to refuse “to permit, at the expense of the [disabled] person, reasonable modifications of existing premises occupied or to be occupied by such person if such modifications may be necessary to afford such person full enjoyment of the premises, except that, in the case of a rental, the landlord may where it is reasonable to do so condition permission for a modification on the renter agreeing to restore the interior of the premises to the condition that existed before the modification, reasonable wear and tear excepted.”

It is important for all real estate professionals to remember that the federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability.

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To learn more about Fair Housing issues (and many other real estate topics), please visit us at www.123ConEd.com. 123 ConEd LLC (www.123ConEd.com) is a leading online provider of continuing education courses to real estate professionals in Michigan. Our online Michigan real estate con ed courses are fully approved and properly certified by the Michigan Department of Energy, Labor & Economic Growth.

Copyright © 123 ConEd LLC 2009. All rights reserved.

Real Estate Professionals Arrested in Mortgage Fraud Scheme

Here is another example of a recent legal case involving mortgage fraud. I try to post case summaries in order to provide timely updates to real estate professionals on important issues.

On June 3, 2009, five people were arrested for their roles in a mortgage fraud scheme in the Washington State that bilked banks and property sellers out of more than $18 million. The arrests came as a result of an extensive investigation by United States Immigration and Customs Enforcement (“ICE”).

Humerto A. Reyes-Rodriguez, Alexis Ikilikyan, Micki S. Thompson, Mario Marroquin, and William S. Poff were indicted by a federal grand jury last month on charges of money laundering and conspiracy to commit bank and wire fraud (they were arrested on June 3, 2009). The indictment alleges that over a three-year period starting in 2004, they were responsible for 80 fraudulent loan transactions in communities throughout King County and Pierce County, Washington.

Mr. Reyes-Rodriguez and Ms. Ikilikyan were licensed real estate agents and mortgage loan originators. Mr. Poff is Ms. Ikilikyan's ex-husband and was a licensed notary and loan originator. Mr. Thompson was employed by Great American Escrow and acted as the closing officer for many of the fraudulent sales. Mr. Marroquin acted as a straw buyer and oversaw fictitious home repair companies.

According to court documents, the five defendants worked together to obtain financing from banks to purchase homes. At the same time, they convinced innocent home sellers to extend private loans to the buyer of the home to cover a portion of the purchase price.

The sellers did not know that the conspirators had already obtained financing from commercial lenders to cover the full cost of the home. When payments were not made, the properties fell into foreclosure. The homes were then sold for less than the total of all loans secured for the property. The sellers who had extended private loans to the buyers were left with nothing.

The conspirators also used straw buyers to purchase and resell properties and then submitted false information to the banks such as employment, income, citizenship status, assets and liabilities. They submitted bogus appraisals and hired fictitious home repair companies to do repair work on the properties. Proceeds from the home sales would go to the fake companies that had, in fact, done no work.

This case uncovered a group of real estate professionals who manipulated home sales for pure profit while some of the properties went into foreclosure and innocent private citizens were defrauded.

The conspiracy and money laundering charges are punishable by up to 20 years in prison and a $1 million fine. An indictment is merely a formal charge by the grand jury. Each defendant is presumed innocent unless and until proven guilty in court.

I will try to keep following this case and post an update when the case is ultimately resolved, hopefully with all of the defendants getting long prison sentences.

Source: U.S. Department of Justice press release (portions of press release used with permission)

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To learn more about a variety of real estate topics, please visit us at www.123ConEd.com. We are the leading online provider of Michigan real estate continuing education. All of our courses are fully approved and properly certified by the State of Michigan, and are offered online.

Copyright © 123 ConEd LLC 2009. All rights reserved.

Nationwide Sex Offender Website

The United States Department of Justice provides a link on its website to a national sex offender website, which is known as the Dru Sjodin National Sex Offender Public Website ("NSOPW"). The NSOPW is coordinated by the Department of Justice and is a cooperation between all 50 states and the federal government. In addition to including sex offender registration information from all 50 states, it also includes registration information from Puerto Rico, Guam, the District of Columbia, and participating Native American tribes. The NSOPW allows users to submit a single national query to obtain information about sex offenders through a number of search options, including by location/zip code or by offender name.

The NSOPW was created in response to the November 2003 murder of Dru Kathrina Sjodin, who was a student of the University of North Dakota. She was kidnapped and killed by a registered sex offender (who was later caught, convicted and sentenced to death).

In addition to providing a comprehensive national database, the website also provides links to the separate sex offender registries of all 50 states (Public Registry Sites). This is a helpful place to quickly locate the sex offender registry of your specific state.

One more great resource for identifying the locations of registered sex offenders is a website called Family Watchdog. It is an excellent site and very comprehensive and user-friendly. This site displays search results on a map of the search location. The map uses color-coded markers to identify the exact location of registered sex offenders in your area. The color-coded map markers allow users to quickly determine whether the offender was convicted of an offense against children, rape, sexual battery, or a different sexual offense. And, if you click on one of the map markers, a separate window opens that shows a picture of the offender and provides a description of the crime.

As a father of two young children, I was terrified to see how many registered sex offenders live in my general area, which is considered a nice, clean, and safe neighborhood. Scary!

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To learn more about a variety of real estate topics, please visit us at www.123ConEd.com. We are a leading online provider of Michigan real estate continuing education. All of our courses are fully approved and properly certified by the State of Michigan, and are offered online.

Copyright © 123 ConEd LLC 2009. All rights reserved.

When and How a Tenant Must Request a Reasonable Accommodation or Permission to Make a Reasonable Modification

Under the Fair Housing Act, a resident or an applicant for housing makes a reasonable accommodation request whenever she makes clear to the housing provider that she is requesting an exception, change, or adjustment to a rule, policy, practice, or service because of her disability. She should explain what type of accommodation she is requesting and, if the need for the accommodation is not readily apparent or not known to the provider, explain the relationship between the requested accommodation and her disability.

Similarly, a resident or an applicant for housing makes a reasonable modification request whenever she makes clear to the housing provider that she is requesting permission to make a structural change to the premises because of her disability. She should explain that she has a disability, if not readily apparent or not known to the housing provider, the type of modification she is requesting, and the relationship between the requested modification and her disability.

An applicant or resident is not entitled to receive a reasonable accommodation or modification unless she requests one. However, the Fair Housing Act does not require that a request be made in a particular manner or at a particular time. A person with a disability need not personally make the reasonable accommodation request; the request can be made by a family member or someone else who is acting on her behalf. An individual making a reasonable accommodation or modification request does not need to mention the Act or use the words “reasonable accommodation” or “reasonable modification.” However, the requester must make the request in a manner that a reasonable person would understand to be a request for an exception, change, or adjustment to a rule, policy, practice, or service because of a disability or that a reasonable person would understand to be a request for permission to make a structural change because of a disability.

Although a reasonable accommodation or modification request can be made orally or in writing, it is usually helpful for both the resident and the housing provider if the request is made in writing. This will help prevent misunderstandings regarding what is being requested, or whether the request was made. To facilitate the processing and consideration of the request, residents or prospective residents may wish to check with a housing provider in advance to determine if the provider has a preference regarding the manner in which the request is made. However, housing providers must give appropriate consideration to reasonable accommodation and modification requests even if the requester makes the request orally or does not use the provider’s preferred forms or procedures for making such requests.

Example: A tenant in a large apartment building makes an oral request that she be assigned a mailbox in a location that she can easily access because of a physical disability that limits her ability to reach and bend. The provider would prefer that the tenant make the accommodation request on a pre-printed form, but the tenant fails to complete the form. The provider must consider the reasonable accommodation request even though the tenant would not use the provider’s designated form.

It is important for all real estate professionals to remember that the federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability.

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To learn more about Fair Housing issues (and many other treal estate topics), please visit us at www.123ConEd.com. 123 ConEd LLC (www.123ConEd.com) is a leading online provider of continuing education courses to real estate professionals in Michigan. Our online Michigan real estate con ed courses are fully approved and properly certified by the Michigan Department of Energy, Labor & Economic Growth.

Copyright © 123 ConEd LLC 2009. All rights reserved.

Time's Running Out! -- Michigan Real Estate Con Ed is Due by October 31!!

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Sexual Harassment under Fair Housing Laws

Every real estate professional should already know that the Fair Housing Act makes it unlawful to discriminate in housing on the basis of sex. What many real estate professionals do not realize, however, is that that includes sexual harassment.

Courts throughout the country have consistently recognized sexual harassment as a form of discrimination that violates the Fair Housing Act. In order to sustain a claim of sexual harassment under the Fair Housing Act, an individual must show that the sexual conduct was unwelcome. Nonetheless, if an individual submitted to the sexual conduct, that conduct still may have been unwelcome and a claim may be tiled.

Courts recognize two types of sexual harassment: (1) quid pro quo sexual harassment (i.e., when a housing provider, or his/her employee, agent or contractor conditions access to or retention of housing or housing-related services or transactions on a victim's submission to sexual conduct); and (2) hostile environment sexual harassment (i.e., when a housing provider or his/her employee, agent or contractor, or in certain circumstances another tenant, engages in sexual behavior of such severity or pervasiveness that it alters the terms or conditions of tenancy and results in an environment that is intimidating, hostile, offensive, or otherwise significantly less desirable). Claims may be filed even if the alleged victim did not experience the loss of a housing opportunity or some tangible economic loss. Complaints alleging sexual harassment involve one or both types of harassment.

Sexually harassing conduct can be verbal (derogatory remarks, slurs, jokes, intimidation, and even threats of violence), physical (body gestures, whistling, ogling, unwelcome touching or physical violence), or visual (inappropriate sexually-oriented written materials or pictures). Sexual harassment also occurs when a resident’s housing is conditioned on agreeing to sexual favors. For example: A manager demands a date in exchange for a rent reduction. The legal term for this type of harassment is quid pro quo – “this for that.” Again, the treatment is considered harassment if it rises to the level of “severe or pervasive” conduct.

With respect to harassment in the rental context, a property manager has a duty not to engage in sexual harassment. Additionally, property managers have a duty to prevent or stop sexual harassment committed by employees, agents, or contractors and that they may be liable for acts committed by such persons. If a property manager knows or should have known that an employee, agent or contractor is sexually harassing applicants, tenants or residents, he/she has the duty to take action to stop the harassment. For example, if an apartment manager authorizes a maintenance worker to enter a tenant's home to make a repair, and the maintenance worker sexually harasses the tenant, the management company may be held vicariously liable for the maintenance worker's actions. A property manager may be held liable if any of his/her employees, agents, or contractors sexually harass an applicant, resident or tenant.

In recent years, the United States Department of Justice ("DOJ") has been looking more closely at sexual harassment in housing in its Fair Housing enforcement efforts. Women, particularly those who are poor, and with limited housing options, often have little recourse but to tolerate the humiliation and degradation of sexual harassment or risk having their families and themselves removed from their homes. The DOJ's enforcement program is aimed at landlords who create an untenable living environment by demanding sexual favors from tenants or by creating a sexually hostile environment for them. By this, the DOJ is seeking both to obtain relief (usually large monetary fines) for tenants who have been treated unfairly by a landlord because of sex and also deter other potential abusers by making it clear that they cannot continue their conduct without facing repercussions.

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To learn more about fair housing issues (along with a variety of other real estate topics), please visit us at www.123ConEd.com. We are the leading online provider of Michigan real estate continuing education. All of our courses are fully approved and properly certified by the State of Michigan, and are offered online.

Copyright © 123 ConEd LLC 2009. All rights reserved.

Michigan Laws Related to Mold

Are there laws in the State of Michigan related to mold issues?

It might seem surprising, but the State of Michigan does not have laws that require anyone to cleanup, remove, or report mold in any indoor environment. Also, the State of Michigan does not have a program to address issues related to mold, other than to provide people basic information about mold clean-up. Moreover, the State of Michigan does not certify or license contractors for mold removal.

However, laws do exist that cover certain situations that involve indoor mold. The following is a list government agencies that may be able to provide guidance if your house or apartment has indoor mold.

Landlord and tenant relationships: If a tenant is renting an apartment or house, that person has the right to expect certain minimum standards referred to as "warranties of habitability" that provide minimum standards of decent, safe, sanitary housing specified in the state or local housing code. For more information on landlord-tenant relationships go to: http://www.tenant.net/Other_Areas/Michigan/index.html.

Fraud in mold remediation companies: If you believe you are a victim of fraudulent business practices from a company involved in mold remediation, contact: Michigan Attorney General's Office, Michigan Consumer Protection Division, P.O. Box 30213-7713, Lansing, MI 48909, (517) 373-1140

Legal issues related to new home construction and mold: If you have questions about laws regarding new housing construction and contractors actions related to mold, contact: Michigan Department of Labor & Economic Growth, Bureau of Commercial Services/Enforcement Division, P.O. Box 30018, Lansing MI 48909, (517) 241-9202

For more information on mold:

• Michigan Department of Community Health Toxics and Health hotline and website: 1-800-648-6942, www.michigan.gov/mdch-toxics
• Your local public health department, find it at http://www.malph.org/page.cfm/108/
• Centers for Disease Control: http://www.cdc.gov/mold/
• National Center for Housing and the Environment: http://www.stopmold.org/

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To learn more about a variety of real estate topics, please visit us at www.123ConEd.com. We are a leading online provider of Michigan real estate continuing education. All of our courses are fully approved and properly certified by the State of Michigan, and are offered online.

Copyright © 123 ConEd LLC 2009. All rights reserved.

Operation Home Sweet Home

Ever heard of the Fair Housing testing program, where someone visits rental communities to observe customer service? HUD and local fair housing agencies use such a testing process to assess a specific complaint or to check a random market for fair housing compliance. Any applicant could be a fair housing tester.

Fair housing testing is a tool used to measure the practices of housing providers relating to the Fair Housing Act. Some unlawful housing discrimination practices can only be discovered through fair housing testing. Information gathered through fair housing testing can be used as evidence to support a client’s administrative housing discrimination complaint with the Department of Housing and Urban Development or a private lawsuit against a housing provider. The United States Supreme Court has recognized and affirmed the important of fair housing testing in fighting housing discrimination.

In order to enforce fair housing laws, the Housing and Civil Enforcement Section of the Civil Rights Division of the United States Department of Justice (“DOJ”), brings suit to enforce the Fair Housing Act, which prohibits discrimination on the basis of race, color, religion, national origin, sex, disability, and familial status. The Fair Housing Act authorizes the DOJ to bring suits where investigations yield evidence of a pattern or practice of illegal housing discrimination.

In 1991, the DOJ established a fair housing testing program and commenced testing in 1992. Testing refers to the use of individuals who, without any bona fide intent to rent or purchase a home, apartment, or other dwelling, pose as prospective buyers or renters of real estate for the purpose of gathering information, which may indicate whether a housing provider is complying with fair housing laws. The primary focus of the fair housing testing program has been to identify unlawful housing discrimination based on race, national origin, disability, or familial status.

The DOJ employs various means to accomplish testing in local communities, including contracts with private fair housing organizations, contracts with individuals, and by using non-attorney DOJ employees throughout the country. The DOJ employees are volunteers who have been trained to participate as testers. Since 1992, the testing program has recruited and trained over 1,000 employees from various DOJ components throughout the nation to participate as testers. These are in addition to the numerous individuals retained by private fair housing organizations. The Housing and Civil Enforcement Section conducts numerous investigations simultaneously at any given time.

Testing is a method to determine whether or not a home seeker is treated differently in his or her search for housing. A person’s race or national origin, for example, would be impermissible factors upon which to base a denial of an opportunity to purchase a home. Testing for housing discrimination involves individual testers posing as prospective home buyers or renters. Testers are paired and assigned profiles so that they are equally qualified to rent or purchase an apartment or home in question. They are similar in all respects except for one of the protected classes, such as race, color, religion, sex, handicap, familial status, national origin, age, or marital status. The experiences of testers are used to compare the treatment of one home seeker (protected class) to another (non-protected class). In this context, testing measures the difference in treatment afforded a home seeker as determined by the information and services provided by real estate firms, property management firms, rental agents/brokers and others.

If differences are found that relate to race, color, religion, sex, handicap, familial status, national origin, age, or marital status, a housing discrimination is filed. The vast majority of testing cases filed to date are based on testing evidence that involved allegations of agents misrepresenting the availability of rental units or offering different terms and conditions based on race, and/or national origin, and/or familial status.

In February 2006, the DOJ launched Operation Home Sweet Home, which is a fair housing testing program that employs individuals who pose as renters for purposes of gathering information about possible discriminatory apartment rental practices. The initiative was inspired by the plight of displaced victims of Hurricane Katrina who were suddenly forced to find new places to live. Operation Home Sweet Home, however, is not limited to the areas hit by Hurricane Katrina, but targets housing discrimination all over the country.

So remember that any applicant could be a fair housing tester. And, contrary to what most real estate professionals think, it is not easy to spot a tester. You likely will never know that you were visited by testers unless, of course, a discrimination complaint is filed against you.

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To learn more about fair housing issues (and many other real estate topics), please visit us at www.123ConEd.com. We are a leading online provider of Michigan real estate continuing education. All of our courses are fully approved and properly certified by the State of Michigan, and are offered online.

Copyright © 123 ConEd LLC 2009. All rights reserved.