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Course 2: Legal Aspects & Responsibilities 2 Introductions Your name Where you work Your job responsibilities How long you have been in the industry What.

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Presentation on theme: "Course 2: Legal Aspects & Responsibilities 2 Introductions Your name Where you work Your job responsibilities How long you have been in the industry What."— Presentation transcript:

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2 Course 2: Legal Aspects & Responsibilities 2 Introductions Your name Where you work Your job responsibilities How long you have been in the industry What you hope to get from this class

3 Course 4: Fair Housing 3 Agenda Legal Basics Legal Obligations Contractors, Vendors, and Service Agents Requirements of Common Law Federal Regulations

4 Course 2: Legal Aspects & Responsibilities Chapter 1 4 Phases of the Rental Process Marketing and advertising Screening and applications Leases Maintenance Termination

5 Course 2: Legal Aspects & Responsibilities Chapter 1 5 The Screening Process Be consistent Document reasons for denials Keep detailed denial records

6 Course 2: Legal Aspects & Responsibilities Chapter 1 6 Leases Be familiar with each paragraph of lease Know minimum and maximum lease terms for your state Understand the NAA lease template

7 Course 2: Legal Aspects & Responsibilities Chapter 1 7 Suitable Living Conditions Different parties have different responsibilities –Manager’s responsibilities –Residents responsibilities

8 Course 2: Legal Aspects & Responsibilities Chapter 1 8 Manager’s Responsibilities for Suitable Living Perform repairs Encourage residents to notify you of repairs in a timely manner Respond promptly to service orders Follow-up on repair work quality Record service order requests and actions Periodic residence inspections

9 Course 2: Legal Aspects & Responsibilities Chapter 1 9 Resident’s Responsibilities for Suitable Living Spell out in lease Repair what they damage Dispose of trash Keep residence clean Not damage the premises beyond ordinary wear and tear Minor maintenance per lease Report necessary repairs Report even minor water leaks

10 Course 2: Legal Aspects & Responsibilities Chapter 1 10 Termination of a Lease Overview Friendly termination best Friendly termination of tenant who vacates at end of lease term optimal Holdovers can be challenging

11 Course 2: Legal Aspects & Responsibilities Chapter 1 11 Manager’s Role in Terminations Represent owner in professional manner Keep accurate and detailed information Notify by certified mail or equivalent for evictions Follow all local and state laws in case of evictions

12 Course 2: Legal Aspects & Responsibilities Chapter 1 12 Holdovers Tenants who don’t leave at the end of a lease; you can: –Renew under previous terms –File court papers to evict –Renew for new terms for a shorter fixed- period or month-to-month

13 Course 2: Legal Aspects & Responsibilities Chapter 1 13 How to Evict a Tenant Manager’s responsibility Constructive eviction

14 Course 2: Legal Aspects & Responsibilities Chapter 1 14 Reasons for Eviction Non-payment of rent Unauthorized pet Unauthorized resident Unauthorized subleasing Misuse/illegal use False rental application Damage to premises

15 Course 2: Legal Aspects & Responsibilities Chapter 1 15 Eviction Notices Tenant has legal right to notice Must give correct amount of notice with valid reasons Common types of notice –Pay rent or quit –Cure or quit –Unconditional quit

16 Course 2: Legal Aspects & Responsibilities Chapter 1 16 Eviction Process Eviction process stages: –Manager files complaint and gives resident copy –Resident files answer –Judge decides case Many cases are settled out-of-court Know state and local laws about removal of tenant belongings when you win an eviction

17 Course 2: Legal Aspects & Responsibilities Chapter 1 17 Illegal Self-Help Evictions Legal evictions take time Don’t resort to illegal self-help like: –Changing the locks –Turning off utilities –Other threats or coercion Take the legal steps for a legal eviction

18 Course 2: Legal Aspects & Responsibilities Chapter 1 18 Activity #1: What would you do?

19 Course 2: Legal Aspects & Responsibilities Chapter 1 19 Skill Check #1:

20 Course 2: Legal Aspects & Responsibilities Chapter 2 20 Legal Obligations Basics Manager’s responsibilities Private agreements or contracts Common law Government Unenforceable agreements

21 Course 2: Legal Aspects & Responsibilities Chapter 2 21 Elements of a Contract Offer Terminating an offer Acceptance Consideration Capacity

22 Course 2: Legal Aspects & Responsibilities Chapter 2 22 Standard Sections of a Contract Scope of work Term or termination Hold harmless agreement General waiver or release Independent contract agreement Equipment Lease

23 Course 2: Legal Aspects & Responsibilities Chapter 2 23 Apartment Leases Guidelines for working leases Governing laws vary by state Sample leases Lease templates

24 Course 2: Legal Aspects & Responsibilities Chapter 2 24 Right of Entry Resident and management needs Establish policy Limiting liability Notification for non-emergency entry Emergencies Inspections and repairs Law enforcement and government officials Denied entry

25 Course 2: Legal Aspects & Responsibilities Chapter 2 25 Resident’s Right to Privacy Government officials Managers liability Federal trade commission ruling Fair and Accurate Credit Transactions Act (FACTA)

26 Course 2: Legal Aspects & Responsibilities Chapter 2 26 Activity #2: What would you do?

27 Course 2: Legal Aspects & Responsibilities Chapter 2 27 Skill Check #2:

28 Course 2: Legal Aspects & Responsibilities Chapter 3 28 Contractor Agreements Overview What is a contractor When to use a contractor What does a contract cover Legal liability Managers responsibilities Working with contractors guidelines Avoiding disputes

29 Course 2: Legal Aspects & Responsibilities Chapter 3 29 When to Use a Contractor Shortage of staff due to illness, vacation, termination Lack of specific skills (parking lot repairs/resurfacing, roofing, landscaping) Lack of specialized equipment (backhoes and welding equipment) Need for required licenses and permits for electrical and plumbing work Cost factor (materials or supplies may be included in contract prices and purchased at wholesale or bulk prices)

30 Course 2: Legal Aspects & Responsibilities Chapter 3 30 When to Use a Contractor, continued Need for materials or supplies that may not be available locally Total cost issue (staff hours in terms of special insurance, licensing fees or payroll taxes may be more cost effective if borne by the contractor), or Cost and time issue (training staff is more expensive than hiring a contractor).

31 Course 2: Legal Aspects & Responsibilities Chapter 3 31 What Does a Contract Cover Frequently covers the work Largest jobs require full bids Small jobs may skip the bid process

32 Course 2: Legal Aspects & Responsibilities Chapter 3 32 Legal Liability and Management Responsibility Contractors may be viewed as extensions of the property management team itself Vendor and the management companies are often viewed as one and the same Contractors should be informed of the non- discriminatory and other operating policies of the property

33 Course 2: Legal Aspects & Responsibilities Chapter 3 33 Guidelines for Working with Contractors Get evidence of insurance coverage Let vendors know they are responsible for damage Vendors are responsible for employment decisions regarding their staff Vendors must comply with all fair housing laws

34 Course 2: Legal Aspects & Responsibilities Chapter 3 34 Avoiding Disputes Determine specifications and their impact Set payment guidelines Verify materials used and work completed Put it in writing, and Ensure vendors are aware of your policies and your law compliance

35 Course 2: Legal Aspects & Responsibilities Chapter 3 35 Bids Certain contracts require no bids Often no bids are required for small amounts of goods and services Check your company policy

36 Course 2: Legal Aspects & Responsibilities Chapter 3 36 Bid Tips Put company first Treat competitors equally Negotiate reasonably Know who can sign contracts for the company Establish response date Maintain list of vendors

37 Course 2: Legal Aspects & Responsibilities Chapter 3 37 Bid Process Elements Performance security Insurance certificates Awarding a bid Bidder disqualification

38 Course 2: Legal Aspects & Responsibilities Chapter 3 38 Standard Bid Requirements Vendor responsibility Bid invitation content Bid invitation revisions Substitutions Bid as contract Delivery of goods or services

39 Course 2: Legal Aspects & Responsibilities Chapter 3 39 Standard Bid Requirements, continued Waiver lien Inspection Payment for goods Failure to replace goods

40 Course 2: Legal Aspects & Responsibilities Chapter 3 40 Activity #3: What would you do?

41 Course 2: Legal Aspects & Responsibilities Chapter 3 41 Skill Check #3:

42 Course 2: Legal Aspects & Responsibilities Chapter 4 42 Requirements of Common Law Negligence Implied Warranty of Habitability Lack of Habitability

43 Course 2: Legal Aspects & Responsibilities Chapter 4 43 Negligence: Definition Negligence is an unreasonable response to a foreseeable risk.

44 Course 2: Legal Aspects & Responsibilities Chapter 4 44 Negligence: Management is liable if… You were legally responsible for the “control area” and failed to repair the system or problem causing injury An accident was foreseeable The chances of an accident could have been sharply reduced with reasonable attention

45 Course 2: Legal Aspects & Responsibilities Chapter 4 45 Negligence: Management is liable if…(cont’d) A serious injury could result because of your lack of reasonable attention Your failure to respond to the proper maintenance caused the injury

46 Course 2: Legal Aspects & Responsibilities Chapter 4 46 Activity #4 Negligence: Case Study A maintenance employee spills a slippery substance on a common area on the property. What are examples of negligence?

47 Course 2: Legal Aspects & Responsibilities Chapter 4 47 Nuisance: Brief Description The need for managers to respond appropriately to the potential for danger to residents.

48 Course 2: Legal Aspects & Responsibilities Chapter 4 48 Nuisance: How to prevent potential danger to residents Know the frequency and nature of crime in your area Consult with local police Participate in crime-free training offered by local police Know and observe city/state laws regarding precautions Keep residents reasonably informed of current criminal activity in your neighborhood

49 Nuisance: How to prevent potential dangers to residents Encourage residents to understand personal responsibility for safety Carefully screen applicants Conduct regular property inspections Cooperate with law enforcement Develop a responsive strategy to concerns and complaints Course 2: Legal Aspects & Responsibilities Chapter 1 49

50 Course 2: Legal Aspects & Responsibilities Chapter 4 50 Nuisance: When a resident is a victim of a criminal act. Resident can bring a law suit against you, the manager. Offer support, express regret, and offer assistance without invoking the potential for increased liability – follow company policy You can be liable if you acted unreasonably in the face of foreseeable risk.

51 Course 2: Legal Aspects & Responsibilities Chapter 4 51 Activity #5 Nuisance: Case Study. A female resident reported that she was raped walking from her car in the parking lot to her front door. What are examples of things to do or questions to ask to limit your exposure in such a case?

52 Course 2: Legal Aspects & Responsibilities Chapter 4 52 Implied Warranty of Habitability The implied warranty of habitability is the suitable maintenance of housing properties so that they are fit to live in.

53 Course 2: Legal Aspects & Responsibilities Chapter 4 53 Legal Responsibilities Maintain roofs, windows and walls Provide working water, heat, air conditioning, electric, plumbing, lighting Clean and safe common areas Address potential environmental hazards Control excessive noise, insufficient ventilation and overcrowding

54 Course 2: Legal Aspects & Responsibilities Chapter 4 54 Lack of Habitability:Brief Description A residence is not habitable if something of a serious nature disrupts the habitability of the residence or puts the resident at a health or safety risk

55 Course 2: Legal Aspects & Responsibilities Chapter 4 55 Lack of Habitability: Resident Recourse Managers must be given reasonable time to remedy the situation Resident course of actions to habitability issues are typically outlined in the lease document and should be followed precisely State and local laws may also play a part

56 Course 2: Legal Aspects & Responsibilities Chapter 4 56 Lack of Habitability: Resident Recourse (cont’d) Residents can: –Report the complaint to local authorities –File a court action –Make the repair or hire a professional to do the work and subtract it from rent due –Move out –Withhold rent –Pay rent, but file suit for difference between rent charged and the value of the defective dwelling.

57 Course 2: Legal Aspects & Responsibilities Chapter 4 57 Activity #6 Habitability: Discussion Units may become uninhabitable because of damage to adjacent units, fire, or severe weather. How do you interact with residents who have been impacted?

58 Course 2: Legal Aspects & Responsibilities Chapter 4 58 Skill Check #4 Chapter 4 – Requirements of Common Law

59 Course 2: Legal Aspects & Responsibilities Chapter 5 59 Federal Regulations Fair Credit Reporting Act (FCRA) Fair and Accurate Credit Transaction Act (FACTA) FCC Ruling on Satellite Dishes and Central Antennas Megan’s Law Environmental Hazards

60 Course 2: Legal Aspects & Responsibilities Chapter 5 60 FCRA: Brief Description This law identifies what regulations your company needs to comply with when checking a prospective resident’s credit history.

61 Course 2: Legal Aspects & Responsibilities Chapter 5 61 FCRA: How to Comply Inform applicants that a consumer report will be requested Obtain a signed form from applicant authorizing the credit search Provide written adverse action letter to denied or conditionally accepted applicants Maintain records in the event a claim is filed

62 Course 2: Legal Aspects & Responsibilities Chapter 5 62 FCRA: How to Write an Adverse Action Letter –Name, address, phone number of credit bureau you used –A statement that the credit bureau did not make the rejection decision and cannot provide the reasons for rejection –A statement of the applicant’s right to obtain a free copy of the report –A statement telling the applicant that he/she can dispute the accuracy of the report –Include any numerical credit score used in making the credit decision, the range of possible scores under the model used, the key factors that adversely affected the credit score, the date on which the credit score was created, and the name of the person or entity that provided the credit score. If you deny an application based on information from a credit report, you must write an adverse action letter to include:

63 Course 2: Legal Aspects & Responsibilities Chapter 5 63 FACTA: Brief Description This act broadens the FCRA by extending the allowable types of consumer reports and providing descriptions of adverse actions

64 Course 2: Legal Aspects & Responsibilities Chapter 5 64 FACTA: How to Comply Respond correctly to “fraud alerts” and “file blocks” found on an applicant’s consumer report Be able to provide additional proof and support when supplying collection accounts to credit bureaus

65 Course 2: Legal Aspects & Responsibilities Chapter 5 65 FACTA: Adverse actions you can take Require co-signer on lease Require deposit or last month’s rent Require larger deposit than other renters

66 Course 2: Legal Aspects & Responsibilities Chapter 5 66 Activity #7 FCRA and FACTA: Discussion If a potential resident does not agree to sign the form allowing management to check credit history, does FCRA and FACTA apply? Can management deny the person?

67 Course 2: Legal Aspects & Responsibilities Chapter 5 67 FCC Rules on Satellite Dishes, Central Antennas, and Exclusive Cable TV Contracts Residents may install a independent satellite dish of 1 meter or less or independent stick antenna without drilling holes in structures on: –Balcony –Balcony railing –Patio But not on common areas including: –Outside walls, window sills, roofs –Common area balconies or stairwells Devices cannot be used to extend dish or antenna beyond railing or patio line

68 Course 2: Legal Aspects & Responsibilities Chapter 5 68 FCC Rules on Satellite Dishes and Central Antennas (cont’d) Managers cannot restrict installation of a dish or antenna because of an existing agreement with a third party television provider Property managers are not required to install a central dish or other device for residents who cannot otherwise receive a satellite signal Managers can restrict individual installation if the property has a central dish or antenna that provides commercially acceptable signals that residents wish to have and the cost is not greater than the cost of individual private service

69 Course 2: Legal Aspects & Responsibilities Chapter 5 69 FCC Ruling: Additional Conditions Residents may be required to: –sign legal document assuming total responsibility –to obtain liability insurance Owners/managers may: –Encourage residents to get professional installation –Require a security deposit to cover physical damages

70 Course 2: Legal Aspects & Responsibilities Chapter 5 70 Activity #8 FCC Ruling: Discussion Can management require insurance on a first floor installation of a satellite dish or antenna?

71 Course 2: Legal Aspects & Responsibilities Chapter 5 71 Megan’s Law – Brief Description Department of Justice maintains a database of sex offenders Each state has their own databases Each state has to enact public notification about sex offenders to keep federal crime funds

72 Course 2: Legal Aspects & Responsibilities Chapter 5 72 Megan’s Law – How to Comply Seek legal counsel first – every state is different Consider these questions if a resident has a past sex offense: –How foreseeable is it that the offender is a real danger to other residents? –Can reasonable steps be taken to inform the residents? –Can this disclosure be done in a clear, non- inflammatory and fair manner?

73 Course 2: Legal Aspects & Responsibilities Chapter 5 73 What are Environmental Hazards? Lead Asbestos Freon Radon Mold Carbon Monoxide

74 Course 2: Legal Aspects & Responsibilities Chapter 5 74 Who is Responsible with Regard to Environmental Hazards? Managers are responsible for correcting environmental health hazards Managers may be held liable for resident health problems resulting from environmental health hazards

75 Course 2: Legal Aspects & Responsibilities Chapter 5 75 Activity #9 Environmental Hazards: Identify 3 strategies you can implement to protect residents from the dangers of environmental hazards and lessen your exposure to liability for this health risk

76 Course 2: Legal Aspects & Responsibilities Chapter 5 76 Skill Check #5 Chapter 5 – Federal Regulations


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