Housing discrimination occurs when a landlord places an advertisement regarding the rental of any housing accommodation that indicates any preference or limitation based upon protected classes or characteristics.

Non-discriminatory advertising should advertise in an inclusive way that will attract the broadest possible audience and avoid expressing any preference for or limitation against certain classes or characteristics.

Section 804(c) of the Fair Housing Act specifically makes it unlawful to make, print, or publish, (or cause to be made, printed, or published), any notice, statement, or advertisement, with respect to the sale or rental of a dwelling, that indicates any preference, limitation, or discrimination based on race, color, national origin, religion, sex, familial status, or handicap. This prohibition against discriminatory advertising applies to single-family and owner-occupied housing that is otherwise exempt from the Fair Housing Act.

A key point is that advertising should describe the property, not a potential tenant.

There are some advertising guidelines to keep in mind when you advertise a vacancy.

• Make sure the advertising is compliant with fair housing laws by focusing on the property details – features and amenities – in a rental listing description. Advertising should not focus on characteristics that the landlord considers to be an ideal tenant.
• Do not make statements that exclude persons in protected classes or that express a preference for one personal characteristic over others.
• Always provide truthful information about the availability, price, amenities, and features of a housing unit.

In determining whether advertising constitutes a discriminatory housing practice, courts have generally applied a reasonable person standard. This means that liability is incurred by a person or entity if they make an advertisement that indicates a preference and that preference is readily apparent to an ordinary reader.

A landlord advertises his rental business every day through his direct or implied speech and actions during property operations. In conducting business, a landlord should be aware that any word or statement that could be perceived by a tenant or potential tenant to limit housing choice or as an indication of a preference based upon a protected class could be construed by the tenant or potential tenant as discriminatory, whether the statement or word was used in media advertising or communicated orally to another individual in person or over the phone in a matter related to rental housing.

Response to your ads for the vacancy can generate calls regarding details of your rental policy, available date of rental unit, whether pets are accepted, etc. These calls must be answered in compliance with fair housing laws. A best practice to avoid claims of fair housing violations is to make sure that property management staff receive proper training on fair housing issues. A written prepared script with property address, features, and amenities, and answers to commonly asked rental policies can help to answer questions accurately, consistently in a manner that avoids inadvertent discrimination.

The 2019 Fair Housing Trends report published by the National Fair Housing Alliance (NFHA) analyzes housing discrimination complaint data collected from local, private, nonprofit fair housing organizations, state and local Fair Housing Assistance Program (FHAP) agencies; the U.S. Department of Housing and Urban Development (HUD); and the U.S. Department of Justice (DOJ). The published data provides a snapshot of U. S. housing discrimination complaints for the reporting year 2018. Housing discrimination complaints totaled 31,202, an increase of eight percent over the previous reporting year.

Housing discrimination prevents individuals from exercising their rights to housing of their choice. Title VIII of the Civil Rights Act of 1968, the Fair Housing Act, as amended, prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on the protected classes of race, color, religion, sex, national origin, disability or familial status. It is unlawful to coerce, threaten, intimidate, or interfere with anyone for exercising or enjoying their fair housing rights or encouraging or aiding others in the exercise or enjoyment of their fair housing rights.

Housing Discrimination comes in many forms and occurs in different types of housing transactions, such as rental, real estate sales, mortgage lending, and housing-related insurance. It also includes discriminatory advertising, discrimination by homeowners or condominium associations, discriminatory zoning policies, harassment based on race, sex, religion, or national origin, and more.

Most often housing discrimination is rental housing-related discrimination. Rental housing transactions are the most common and most frequent type of housing transactions. Rental housing transactions can be less complicated than other types of housing-related transactions and discrimination can be more easily detected.

The report analysis showed 26,020 rental housing complaints, representing a little over 80 percent of all housing transaction types.  The number of rental housing complaints for this reporting year showed a slight increase over the previous year rental numbers. As with previous years, the most commonly reported housing discrimination complaints were on the basis of disability, race, and familial status.

The majority of discrimination complaints filed with fair housing agencies and HUD are on the basis of disability. The report showed 17,575 complaints of disability discrimination, an increase of 1,238 complaints over the previous reporting year. The large number of disability complaints may be attributed in part to additional fair housing protections afforded persons with disabilities, such as reasonable accommodation, reasonable modification, and accessible design and construction.

There were 5,849 discrimination complaints on the basis of race; 2,721 familial status complaints; 2,351 national origin complaints; 1,956 complaints on the basis of sex; 596 complaints on color; and 407 complaints on the basis of religion.

Complaints must specify the discriminatory actions that allegedly violated fair housing laws. The most common actions cited in complaints were discriminatory terms, conditions, privileges, services, and facilities in the rental or sale of property. Failure to make reasonable accommodation, refusal to rent, coercion, intimidation, threat, or interference with exercising fair housing rights, and housing advertising that indicated discrimination, limitation, or preference, were also common actions of alleged discrimination.

HUD Administrative Complaints

The U.S. Department of Housing and Urban Development (HUD) enforces the Fair Housing Act. HUD’s Office of Fair Housing and Equal Opportunity (FHEO) is responsible for receiving and investigating fair housing complaints. If a person believes he has been discriminated against in a housing related transaction, he can file a complaint with FHEO.

HUD received 1,784 discrimination complaints in their fiscal year 2018, an increase of 473 complaints over the previous year. Discrimination on the basis of disability, race, and national origin are the most commonly reported complaints to HUD.

Department of Justice

The Department of Justice (DOJ) has authority under the Fair Housing Act to prosecute cases involving a “pattern or practice” of housing discrimination, as well as cases involving acts of discrimination that raise “an issue of general public importance.” The Fair Housing Amendments Act (FHAA) increased the Department’s authority to bring cases in which a housing discrimination complaint has been investigated and charged by HUD and one of the parties has elected to go to federal court.

DOJ’s Housing and Civil Enforcement Section filed 24 cases during their fiscal 2018, which was a decrease from the number of cases filed the previous year. Of the cases filed, 15 were pattern or practice cases, and approximately half of those cases were based on disability and sexual harassment in housing.

State and Local Fair Housing Laws

Fair housing complaints can also be complaints of discrimination against groups protected by state and local fair housing laws. The following are examples of some of the additional fair housing protections under state and local fair housing laws that prohibit discrimination on the basis of:

• Source of Income
• Section 8 Rental Assistance
• Age
• Student Status
• Sexual Orientation
• Marital Status
• Gender Identity
• Gender Expression
• Criminal Background
• Domestic Violence Victims
• Military/Veteran Status
• Ancestry
• Primary Language
• Place of Residence
• Homelessness
• Immigration Status
• Primary Language
• Arbitrary reason (California rental housing only)

It has been estimated that the amount of data collected for a study such as the Fair Housing Trends Report is only a fraction of the incidences of housing discrimination that occur each year. Housing discrimination may be unreported, or undetected because it can be difficult to identify, prove, and document. Those individuals that experience housing discrimination are reluctant to report discrimination fearing retaliation by the housing provider, the provider’s employee or agent, or another tenant. Many victims of housing discrimination have the perception that nothing will be done or can be done to remedy the situation and reporting an incident will only make matters worse.

Harassment

Housing-related harassment complaints received by fair housing organizations are also collected and analyzed. Many housing-related harassment incidents go unreported due to fear of retaliation. Vulnerable populations, such as minorities, women, and protected classes for disability and familial status, are often subject to harassment and will not report incidents for fear of losing their existing housing or being harassed even more. Harassment based on protected class can occur in the form of coercion, intimidation, threats or interference, both in the provision of housing or in a housing setting.

The report showed 897 reported complaints of harassment, a significant increase in the number of harassment complaints than in each of the previous two reporting years. The majority of harassment complaints were on the basis of disability, followed by basis of harassment for race and sex.

Housing-related harassment is illegal under the Fair Housing Act. HUD has formalized standards for use in investigations, administrative adjudications, and cases brought in federal and state courts under the Fair Housing Act involving allegations of harassment on the basis of federally protected classes.

The Quid Pro Quo and Hostile Environment Harassment and Liability for Discriminatory Housing Practices under the Fair Housing Act specifies: how HUD evaluates complaints of quid pro quo (“this for that”)harassment and hostile environment harassment under the Fair Housing Act; and clarifies when housing providers and other entities or individuals covered by the Fair Housing Act may be held directly or vicariously liable under the Act for illegal harassment as well as for other discriminatory housing practices that violate the Act.

Hate-related Incidents

There has been an increase of hate-related incidents over the past two reporting years. Similar to discrimination basis, the majority of hate-related activity is on the basis of race, ethnicity, or ancestry.

Hate incidences can be abusive language, written or oral, and property damage that is motivated by bias against the victim’s actual or perceived race, ethnicity, ancestry, gender, gender expression, gender expression, religion disability, sex, or sexual orientation.

An activity that coerces, intimidates, threatens, injures, or interferes with persons attempting to exercise and enjoy their fair housing rights because of their race, color, ethnicity, religion, gender, disability, or because they have children is considered a “housing-related hate activity” and may be a violation of the Fair Housing Act. Housing-related hate activities can include hate crimes and other hate activities not deemed as a criminal offense by law enforcement.

The report noted that not only was there an increase in hate-related activities, but also a significant percentage of hate crime incidents occur at the home or residence.

While criminal laws protect persons from hate-related activities, victims of housing-related hate incidents may use the Fair Housing Act to obtain civil relief, including injunctive relief, compensation for economic loss, and monetary relief for injury.

National Fair Housing Month 2020

The U.S. Department of Housing and Urban Development (HUD) observes National Fair Housing Month every April. The theme for the 2020 Fair Housing Month commemoration is Call HUD: Because Sexual Harassment in Housing is Illegal. “Call HUD” is a public awareness campaign to urge persons who experience sexual harassment where they live to call HUD for help. Throughout the month of April HUD and its partner agencies will highlight stories of HUD’s fair housing continuing efforts to combat sexual harassment and other forms of discrimination in housing.

This year’s theme focuses on protecting the rights of individuals to feel safe and secure in their homes, free from sexual harassment or unwanted sexual advances by property owners, managers, maintenance workers or other residents. HUD’s national Fair Housing Month helps to educate the public about what behaviors and actions constitute sexual harassment.

Every year, HUD and its fair housing partner organizations continue to pursue enforcement actions, work to enhance the public’s awareness of their housing rights and emphasize the importance of ending housing discrimination.

Under the Fair Housing Act, in the sale and rental of housing, no one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap:

• Refuse to rent or sell housing
• Refuse to negotiate for housing
• Make housing unavailable
• Deny a dwelling
• Set different terms, conditions or privileges for sale or rental of a dwelling
• Provide different housing services or facilities
• Falsely deny that housing is available for inspection, sale, or rental
• For profit, persuade owners to sell or rent (blockbusting) or
• Deny anyone access to or membership in a facility or service (such as a multiple listing service) related to the sale or rental of housing.

It is illegal for anyone to:

• Threaten, coerce, intimidate or interfere with anyone exercising a fair housing right or assisting others who exercise that right.
• Advertise or make any statement that indicates a limitation or preference based on race, color, national origin, religion, sex, familial status, or handicap. This prohibition against discriminatory advertising applies to single-family and owner-occupied housing that is otherwise exempt from the Fair Housing Act.

The Fair Housing Act prohibits sex discrimina­tion that impacts the terms or condi­tions of housing; is used as a basis for housing decisions; or otherwise has the purpose or effect of unreasonably interfering with housing rights, or creates an intimidating, hostile, or offensive environment. Sexual harassment committed by a landlord, property manager, employee, realtor, lender, insurance agent, or any other agent or representative involved in providing housing, or a real estate-related transaction violates the Fair Housing Act.

Sexual harassment includes any unwanted sexual advance, request for sexual favors, or other unwelcome verbal or physical contact of a sexual nature. It also can take the form of offensive remarks, derogatory statements or expressions of a sexual nature, or other hostile behavior because of a person’s sex. Harassment can consist of oral, written, or other conduct and does not require physical contact between the harasser and victim. Harassment can be directed to any person, male or female, by someone of the same sex or the opposite sex. Sexual harassment does not have to be motivated by sexual desire in order to violate the Fair Housing Act. Sexual harassment could be motivated by hostility toward a particular sex, even if the harasser is the same sex.

HUD Anti-harassment Rule

HUD has issued” Quid Pro Quo and Hostile Environment Harassment and Liability for Discriminatory Housing Practices under the Fair Housing Act”, (the Rule), as the standard to evaluate complaints of quid pro quo (“this for that”) harassment and hostile environment harassment under the Fair Housing Act.

Types of sexual harassment in housing:

Quid pro quo sexual harassment occurs when a landlord, property manager, employee, or agent conditions access to housing or retention of housing or housing-related services to an applicant or tenant’s submission to an unwelcome request or demand to engage in sexual conduct or sexual favors.

An unwelcome request or demand may constitute quid pro quo harassment even if a person acquiesces in the unwelcome request or demand.

Hostile environment sexual harassment refers to unwelcome sexual conduct that is sufficiently severe or pervasive as to interfere with the terms and conditions of tenancy or deprives the tenant of his right to use and enjoy the housing, resulting in an environment that is intimidating, hostile, offensive, or substantially less desirable.

Hostile environment harassment can also occur when a tenant is sexually harassed by another tenant and the harassment is not addressed by the housing provider.

Whether hostile environment harassment exists depends upon the circumstances. Factors to be considered include, but are not limited to, the nature of the conduct, the context in which the incident(s) occurred, the severity, scope, frequency, duration, and location of the conduct, and the relationships of the persons involved. Whether unwelcome conduct is sufficiently severe or pervasive as to create a hostile environment is evaluated from the perspective of a reasonable person standard.

In 2019, HUD and its partner fair housing agencies settled more than 600 complaints alleging discrimination based on one or more of the seven protected classes under the Fair Housing Act.

In more recent months, HUD approved several Conciliation Agreements with housing providers in Napa Valley, California, resolving allegations that the on-site manager for one of their properties sexually harassed female residents. The settlements called for the owners to pay $49,000 to women who filed complaints, remove the on-site manager and attend fair housing training. The owners and the manager of rental properties in Kansas will pay $160,000 in damages and penalties to resolve a Fair Housing Act lawsuit for sexual harassment of numerous female residents.

HUD has published new inflation-adjusted civil penalty amounts for individuals or entities that have been found to have violated a variety of different housing-related laws, including the federal Fair Housing Act. The new civil penalty amounts will apply to violations of the Fair Housing Act that occur on or after April 6, 2020. Under these revised amounts, someone can be assessed a maximum civil penalty of $21,410 for his or her first violation of the Fair Housing Act. Respondents who had violated the Fair Housing Act in the previous 5 years could be fined a maximum of $53,524, and respondents who had violated the Act two or more times in the previous 7 years could be fined a maximum of $107,050. These civil penalty amounts are in addition to actual damages and attorney’s fees and costs that may be awarded to someone who has experienced housing discrimination.

While the federal Fair Housing Act receives much national attention during Fair Housing Month, state and local fair housing laws also provide protections from housing discrimination. State and local city or county fair housing laws often provide broader coverage to additional protected classes such as sexual preference, gender identity, occupation, source of income, Section 8 voucher participation, educational status, medical status, marital status, military service, political affiliation, or other classes as noted by statue. Fair housing compliance should always be to those fair housing laws providing the greatest protections against discrimination.

In general, in the event of severe weather events, it is recommended that residents shelter inside their homes when possible. Basements are ideal as a below-ground storm shelter. If a storm shelter is not available, your next best protection is to take shelter in a small, interior, windowless room on the lowest level of the house or building. A closet, bathroom, or an interior hallway on the lowest level could be used as a shelter. You should stay away from windows, doors, and outside walls.

If a public shelter is the best available refuge from severe weather, authorities agree that you should not let your concerns about the COVID-19 virus keep you from seeking public shelter for your safety.

You should take steps however to be sure you follow CDC guidelines for COVID-19 transmission prevention including practicing social distancing, wearing a face covering, and frequent hand washing. There may be additional guidelines issued by the local emergency management agency such as requiring individual screening before being admitted to the shelter.

You will need to determine what public storm shelters will be made available for shelter during the COVID-19 emergency. The information can be obtained from sources such as state and local emergency management agencies, social media, and city and county governments.

In any emergency it is important to be prepared to the extent of being over-prepared in order to protect personal safety and to mitigate property damage. There are many online resources available from a variety of government and public service agencies that provide information on emergency planning and preparation for emergencies.

As an example, the Federal Emergency Management Agency (FEMA) recommends three simple steps to prepare for and respond to emergencies including natural or made-made disasters. Steps include preparing an emergency supply kit, making a household emergency plan, and being informed about the different types of emergencies that could occur and their appropriate responses.

Emergency Kit

Create an emergency kit with supplies that may be needed for an extended period of time without power. The emergency kit can be used to shelter in place or function as a “grab and go bag” if evacuation to an emergency shelter becomes necessary. A basic emergency supply kit could include the following recommended items:

• Water – one gallon of water per person per day for at least three days, for drinking and sanitation
• Food – at least a three-day supply of non-perishable food
• Prescription medications and medical supplies
• Over the counter medications such as pain relievers
• Battery-powered or hand crank radio or a NOAA Weather Radio with tone alert
• Flashlight, more than one is recommended
• First aid kit
• Extra batteries for all battery powered devices
• Whistle to signal for help
• Dust mask
• Plastic sheeting and duct tape
• Personal hygiene and sanitation supplies
• Household liquid bleach
• Multi-tool and/or a collection of regular tools
• Manual can opener for food
• Area maps
• Cell phone with chargers and/or a backup battery
• Cash
• Emergency blanket or sleeping bag
• Change of clothing
• Other items specific to the needs of household members
• Other items specific to the type of emergency

Emergency Plan

You should research the types of disasters that are likely in your community and the recommended local emergency, evacuation, and shelter plans for each specific disaster. Based on that information, you can create an emergency plan that includes how to shelter-in-place, evacuation routes, community shelters and protocols, how to communicate with family and friends, pre-determined meeting place in the event of separation, and a pet safety plan. Keep in mind that many emergency shelters do not allow pets. Make plans ahead of time on what to do with your pets if you are required to evacuate your residence.

Important Documents

FEMA recommends that important documents such as copies of personal identification, relevant medical information including list of prescribed medications, insurance policies, bank account records, other financial documents, and any other type of document that could prove identity, ownership of assets, or restore account records lost or damaged by a weather event be kept in a waterproof container readily secured by the individual owner. Original documents should always be safeguarded in a secured device preferably at an off-premise location or stored digitally through a trusted electronic service. It may be advisable to consider cash as important as certain documents to facilitate recovery after an event. Precautions should be taken to secure all forms of documents.

Many jurisdictions have implemented tenant protections such as eviction moratoriums that stop tenant evictions during the coronavirus emergency. Tenants will not be evicted if they are unable to pay full rent during the COVID-19 emergency. Many jurisdictions also issued stay orders on all current evictions until after the coronavirus emergency has passed. While tenants affected by COVID-19 have temporary protection from being evicted, the bigger issue is their loss of income due to job closings or reduced work hours and additional expenses due to personal illness, household illness, school closings, and closing of childcare centers. For many tenants April rent is past due and there is good reason to believe that May rent will not be paid.

Rent defaults create financial hardships on many landlords, particularly independent landlords with a small number of properties, who depend upon steady, stable rental income from their tenants to meet their mortgage obligations.

Most landlords would prefer to keep their good tenants in place despite the unexpected rent defaults and are willing to work with tenants to find an acceptable plan for payment of past due rent. Tenants will not be charged late fees on unpaid rents as they work through payment of their rent debt.

However, a landlord should make clear in working with the tenant that the moratorium on tenant evictions is not a rent waiver and does not relieve the tenant of his legal obligations for rents.

In some areas, landlords have been asked, to the extent possible by the landlord’s own financial condition, to forgive rents for April and possibly May; discount tenant rent for the months of April, May, and June (those months being the expected period of COVID-19 related rent defaults); or defer rents during those months to be paid subsequently upon the expiration of the COVID-19 emergency declaration. Some cities have proposed installment payment plans of 6 months or more to allow tenants to make good on their past due rents. Payments would begin after the COVID-19 emergency has been declared over.

In other considerations that would allow a tenant to make payment toward or in full of unpaid rents could be the conversion of the tenant’s security deposit to rent obligations. If a landlord has collected a security deposit, usually equal to one month’s rent, a landlord might consider refunding the security deposit in its entirety to the tenant with the understanding that the tenant would use those funds to pay the current month’s rent. This could be problematic if the tenant does not perform according to the understanding. The landlord will not have financial protection to call upon if the tenant again materially defaults on the lease and/or physically damages the property beyond normal wear and tear. Such an agreement may not be allowed by some state statutes. Before considering this option it may be prudent for a landlord to obtain legal advice. The same cautions should be applied if the landlord collected a prepayment of the last month’s rent, and the landlord allowed the tenant to apply the last month rent amount to the current rent due. There could be complications with tenant understanding and/or inadvertent violations of applicable laws.

For many landlords, partial rent is better than no rent at all. A landlord has the ability to reduce rent or accept partial payments provided his rental practices are fair housing compliant – i.e., any change in stated policy is offered to all tenants that have been verified to have been impacted by the coronavirus. Payment arrangements cannot be selectively offered to one tenant and not to another tenant in the affected category. Written signed documentation of payment agreements should be retained in the tenant’s file.

In general a landlord should make sure his tenants understand their legal obligations for lease terms and conditions. For tenants who can pay rent, they should pay rent. For tenants impacted by the coronavirus as noticed to the landlord and subsequently verified by the landlord, they should understand that rent is still due but that landlords are willing to work with tenants to satisfy past due rent amounts. Any payment arrangement should be documented by a lease addendum or a supplemental agreement and signed by both landlord and tenant.

An effective emergency response plan identifies hazards, mitigation and defense strategies, preparation steps for action specific responses, and recovery procedures for return to normal living and operating conditions. The Covid-19 public health pandemic has underscored the critical nature of being prepared to adequately respond to new, unexpected conditions, the ability to revise practices quickly as conditions change, and to meet the challenges of uncertain outcomes and unprecedented events. For many landlords there may be a “new” normal of business operations when pandemic restrictions on work and daily activities are lifted. Building upon a general emergency response plan, a landlord can add additional measures that address issues related to COVID-19 mitigation efforts, health and safety protections for tenants in residence, and procedures for business employees to safely conduct essential business operations. As information is shared by public health agencies, emergency management agencies, and federal, state and local government officials, a landlord can incorporate required coronavirus mitigation practices and directives into his plan of action.

General Emergency Response Plans

Business risk is inherent in rental housing operations. If risks cannot be prevented, then risks must be managed through a plan of action for mitigation.

A landlord, prepared with an action plan, hazard specific as possible, can help protect the health and safety of tenants, reduce property damage, and provide for business continuity.

Being ready to respond to emergencies requires planning for various and diverse contingencies such as severe weather, medical emergencies, power outages, third party acts of violence, and environmental hazards such as fire, flood, and other natural disasters. The Covid-19 pandemic, a public health threat, is a new contingency requiring a landlord to take additional due diligence measures for the health and safety of the community as a whole, his tenant population, and his employees.

The detail and scope of a landlord’s emergency response plan is customized to the identified risks assessment, the complexity of his business operations, business locations, and tenant populations. An independent landlord with a single rental property may develop his plan in a much different manner than an owner with multiple rental properties and/or multi-family housing units.

Identification of business risks is an important first step in developing an emergency response plan. Landlords should use a worst case scenario planning approach. What could possibly happen? What are the likely events that could cause business interruption? Is there a history of events that damaged or harmed the business? These known risks and potential risks should be evaluated as to the level of risk that each event could present to the business.

Every rental property is unique and houses a diverse tenant population. The emergency response plan should address being prepared to assist tenants of varying ages, levels of physical conditions, mobility challenges, hearing or vision impairments, special needs, or adaptive living devices. There may need to be accommodations made or alternative communication devices available to provide the level of service to protect a vulnerable population.

An effective plan will address issues of responsibility, authority, and communication. The plan is the guidance for the policy, procedure, and practice of tenant safety measures. Tenants need to know what to do when an emergency arises, how and who to contact for information, how to handle an evacuation or sheltering in place, and what to expect when the situation has been resolved and the property cleared for return and resumption of living activities.

Tenants should be provided contact information for the landlord or property management company for business hours and after-hours emergency help, the telephone numbers for emergency services for fire, police, hospitals, ambulance, poison control, utility services, and local disaster relief agencies and shelters. For tenants in multi-family housing properties there should be an established procedure to alert tenants to shelter in-place or evacuate to the nearest sheltering location as required by emergency conditions.

Adequate business insurance coverage is important to protect business continuity. In evaluating business risk, appropriate levels of business insurance should be in place and coverages customized to help protect the landlord from identified risks. If allowed by law, renter insurance coverage should be required of tenants as part of the landlord’s lease terms and conditions and the landlord’s risk management practices.

Previously published articles have discussed the need for landlords to have adequate financial reserves for unexpected expenses and/or loss of income. Generally reserves are for damages or repairs to physical structures caused by a natural disaster. There is a new concern for some landlords who worry their cash reserves may not be adequate to handle unexpected rent defaults. For many landlords business continuation depends upon a stable rental income. The pandemic has directly impacted the earnings capability of many tenants and some tenants have already defaulted on their rent obligations. Business disruption from rent defaults could have a serious impact on long-term business operations. Some landlords do carry insurance coverage for business disruption or loss of rents coverage, but tenant rent defaults due to the pandemic may not be a covered peril. A landlord would need to contact his insurance agent to fully discuss his particular situation and determine full understanding of his coverages.

As part of the planning for emergency response, a landlord must understand the legal obligations under most states’ landlord-tenant statutes regarding the warranty of habitability. Landlords are required to offer and maintain leased premises in a safe and sanitary condition fit for human habitation for the duration of the lease. Habitable conditions include essential services. If an emergency results in disruption, damage, or destruction of property or services which could threaten the health, safety, or well-being of tenants, the landlord and tenant have certain obligations by statute and lease agreement regarding legal rights for repairs of rental units or termination of the lease.

A landlord has the duty of care to take adequate measures to protect the safety of the tenant and his possessions from known risks. A landlord may incur liability or charges of negligence if the landlord’s response is inadequate or untimely during or following emergency conditions.

Accordingly, the landlord’s emergency preparedness plan must provide for appropriate measures in timely response to critical needs in hazardous conditions.

COVID-19 Pandemic – Emergency Response Considerations

Landlords should follow their prepared general emergency response plans as appropriate to the circumstances. As new guidance and directives for COVID-19 mitigation are issued, landlords should incorporate them into the general emergency plan. The health and safety of tenants and employees is best protected by staying informed of the latest directives and best practices issued by the Center for Disease Control (CDC), public health officials, regulatory agencies and federal, state and local governments. By staying current with latest information a landlord can better assess risks and develop appropriate strategies for mitigation.

Landlords should determine their obligation under applicable disclosures and regulations to notify tenants if a tenant or an employee with tenant contact has been diagnosed with COVID-19. Landlords have a legal responsibility to protect the privacy and confidentiality of personal information of tenants and employees if confidential information has been shared with the landlord.

All Plans

Developing an adequate, effective emergency and disaster preparedness plan requires an understanding of the planning process with periodic evaluation and plan revision to changing conditions and environments.

Knowing how to respond during the emergency is critical in protecting lives and reducing the impact on business. While it is unlikely that a landlord can be prepared for all contingencies, it is very likely that a landlord’s emergency response plan can help him be ready to respond quickly when an unexpected event does occur. No business should risk operating without a disaster plan. Whether an owner-manager of a single-family rental or a property management company with multiple units under management, it is important that a landlord or owner be prepared for disasters that can affect his business. It is particularly important to be prepared for events that can put a landlord out of business, whether for a short time or permanently. How quickly a business is able to get back to doing business after a natural disaster or declared emergency condition may depend upon the emergency planning and preparation conducted before the event occurs.

Arizona residential rental property owners with taxable rental property are required to obtain an Arizona transaction privilege tax license from the Arizona Department of Revenue for each location where residential rental income is taxable. This applies regardless if the owner rents the property themselves or employs a property management company. There are some cities in Arizona that also tax residential rental income.

Residential rental is defined as the renting of Arizona real property for more than 30 days for residential purposes only.

If you rent your Arizona residential real estate, all payments made by the tenant or on behalf of a landlord are taxable. The types of payments received from tenants that are taxable rental income include:

• Rent
• Non-refundable and forfeited deposits
• Late payment fees
• Pet fees
• Federal rent subsidies such as HUD

Also considered taxable rental income are fees passed on to the tenant including the following:

• Common area fees
• Homeowner association fees
• Maintenance fees
• Landscaping maintenance fees
• Pool service fees
• Repairs and improvements charges

Under Arizona state law, if a landlord wishes to pass through taxes charged on rent to the tenant, it must be clearly stated in the landlord’s written lease. The tenant must be given 30 days’ prior written notice for any change in the amount of taxes charged to the tenant and the change cannot occur until the new tax rate is effective.

Joining a landlord association is a good way to network with other landlords and property managers in the local area. Many landlords join their local association to make their property management life easier. Shared knowledge from other real estate professionals can be particularly valuable to landlords and property managers to understand the latest changes in landlord-tenant statutes and new rules and regulations on many property management issues.

An association membership can offer many resources such as basic legal forms, sample leases, application forms, other rental documents, free vacancy listings, tax information, legal and accounting references, and vendor partnerships for property management including contractors, maintenance services, web and mobile platform services, software programs, business insurance providers, tenant screening services, credit reporting, and other business services.

In addition to advice and counsel from fellow members, the association will often provide local market data, legislative updates, continuing education, training and compliance updates through the association’s regularly scheduled meetings, seminars, and special events. Association members have access to the association’s website for updates, member only information for resources and professional references, and a general forum for questions and answers from fellow members. Members also receive newsletters, bulletins, texts or email communications for immediate need-to-know property management issues. Regular topics for members only discussion include landlord-tenant law, fair housing requirements, credit reports, background screening, rent collection, and evictions.

Most landlords include the HOA monthly fees in the tenant’s monthly rent amount. While not commonly done, a landlord could choose to have the tenant pay the HOA fees directly to the HOA management as a separate payment. Having the tenant directly responsible for timely payment of HOA dues can create potential liability for the landlord if the tenant fails to make on time payments. The HOA can charge late fees and interest penalties against the owner landlord for delinquent dues that could eventually lead to a lien being placed against the property or notice of foreclosure proceedings.

Owners as landlords are held responsible for the tenant’s actions. If the tenant violates the CC&Rs or any rules and regulations, the HOA will generally notify the owner/landlord of the violation and request the owner to remedy the situation. Accordingly, in order to avoid potentially costly penalties for tenant violations that the landlord never heard about until the matters became serious, landlords should have all HOA notices mailed to the owner’s residence, office, or post office box rather than the rental property address.

HOA’s cannot except in certain circumstances take direct action against a tenant who violates the rule and regulations of the association. Landlords must be notified of the tenant’s violation and the owner landlord must take appropriate remedy. The HOA will assess the landlord any fines associated with the rules violation. It is the landlord’s responsibility to remedy the tenant’s violation of HOA regulations. Landlords should be aware that the HOA can contact law enforcement directly with a tenant commits a crime. The HOA is not obligated to contact the owner landlord first before taking appropriate legal action.

It is strongly recommended that the owner/landlord have a written lease agreement with the tenant that holds the tenant directly responsible for compliance with the HOA governing documents and makes the tenant responsible for fines for violations.

The owner/landlord may have recourse against the tenant if the HOA violation is a material lease default. The owner landlord can issue a notice to the tenant to cure the violation or quit the property. If the tenant does not comply, an owner landlord may begin eviction proceedings.

The landlord-tenant lease agreement is the governing document in determining whether the owner/landlord can require the tenant to reimburse the owner landlord for the amount of the fine.

To reinforce the tenant’s responsibilities for HOA rules and regulations, the owner landlord should always give the new tenant a set of the HOA governing documents prior to lease signing. The lease agreement should contain clause that provide specific coverage of all HOA issues, including the rules and regulations for use of common areas and facilities.

It is recommended that the lease include a statement whereby the tenant acknowledges receipt of HOA documentation and explicitly agrees to reimburse the landlord for any fines resulting from tenant actions or inactions. The signed documentation – tenant acknowledgment of document receipt and tenant agreement for reimbursement of HOA fines to the landlord – should be kept in the tenant’s file.