City of Grand Rapids Rental Application Ordinance Compliance & Enforcement

Transcription

1 City of Grand Rapids Rental Application Ordinance Compliance & Enforcement

2 Ordinance Becomes Effective November 7, 2018

3 What If I Don t Charge an Application Fee? The ordinance does not apply to you! However, it is recommended by the RPOA and PMAWM that you note in all advertising that there is No Application Fee

4 What and When The ordinance establishes rules for the collection and return of rental application fees Requires documentation and disclosures in addition to those required under State and Federal laws Effective Date November 7, 2018 Applies ONLY if application fees are charged

5 Intent of Ordinance Prevent fraudulent collection of application fees Make the application process and screening criteria more transparent Provide more information about why declined Disallow use of application fees as a source of income stream

6 Summary of Rules Must provide to applicants a written disclosure statement that: Clearly states the criteria used to judge or evaluate the application Provides a description of the screening process, and name and contact information of the person or agency conducting the screening Identifies the amount that will be charged for applying, and itemized explanation of costs Contains a prescribed statement informing applicants about how to file a complaint

7 Summary of Rules (continued) Must provide to applicants: A written notification explaining the reason(s) a unit was not offered Documentation substantiating reason(s) copies of paperwork or electronic correspondence List of resources the applicant may use to assist with future applications processes

8 Summary of Rules (continued) Application fees cannot exceed actual cost of the screening process, which may include: Criminal background checks Credit reports Rental history and reference checks Eviction records and employment verification Application fees cannot include administrative fees, with exception of actual reasonable costs necessary to check rental history and verify employment

9 Summary of Rules (continued) Advertising Only available units or units intended to be available may be advertised Must include amount of application fee Application fees may be collected and held up to 30 days for an available unit Must provide written receipt of payment to applicant Administrative Policy will allow longer if agreed to in writing and written receipt of payment provided to applicant

10 Summary of Rules (continued) Full return of fees must be provided to an applicant if: Their application was not screened prior to the unit becoming unavailable The ordinance was not followed Applications must be time and date stamped in order received

11 How to Comply with the Ordinance

12 When Can I Advertise, Take Applications, Screen Applicants & Charge a Fee? You can only do so if one or more of the following is true: The unit is vacant and has a current cert, OR The unit will become available in the future and a waiting list or similar agreement will be provided, OR The current tenant has declared they will not renew their lease.

13 What Do I Have to Include in Advertisements for Rentals? Disclose the Amount of the Application Fee. This includes (but not limited to): Online Ads Social Media Postings Posters Newspaper Ads Flyers Billboards

14 Actual Fee Must = Advertised Fee The application fee charged at the time of application must not exceed the advertised fee. ATTN: For this ordinance, the owner/property manager will only be held liable for advertising posted directly by them or their company. Note: Be prepared to prove that a third party rental advertising aggregator (e.g. Zillow, Rentlinx, etc.) was responsible for posting incorrect fee information.

15 What Can the Application Fee Include? Charges for third party services associated with the screening process, for example: Screening Services (where the service does the screening based upon a pre-set criteria) Credit Reports Criminal Reports Rental History Report Services Eviction Report Services And

16 The Application Fee May Also Include Payments to third parties to check landlord references Payments to third parties to verify employment and income The cost the owner/property manager incurs to check landlord references The cost the owner/property manager incurs to verify employment and income (including Section 8 vouchers)

17 What can NOT Be Included in the Application Fee? Any overhead or administrative costs NOT associated with allowable costs as explained in previous slides.

18 Itemized Explanation of What the Application Fee is Being Used for and the Cost For Example: Credit & Criminal Report Service $45.00 Landlord Reference Check $10.00 Employment Verification Check $10.00 Total Application Fee: $65.00 And

19 Do I need to do at the Time of Application? Yes Provide a copy of the criteria used for screening Provide a brief description of the screening process Provide the name and contact information of the person, screening party or other third party used for screening Disclose the amount of the application fee Provide a written receipt for the fee paid Date and time stamp the completed application Provide a written disclosure to the applicant per the City of Grand Rapids administrative policy.

20 Required to be on Disclosure Statement: Within thirty (30) days of receipt of a denial, the applicant may, if a person believes the City of Grand Rapids rental application fee ordinance has been violated, complete and file a complaint form with the City of Grand Rapids Code Compliance Department, 1120 Monroe Avenue NW, Grand Rapids, Michigan (Revised from ordinance language per City of Grand Rapids Administrative Policy.)

21 When Do Application Fees Need to be Returned? If the application was processed and applicant screened, the fee is not returnable otherwise Return fee within 14 days of application: If applicant was not screened AND they have not consented to being added to a waiting list or signed some other agreement OR If applicant was not screened AND they have withdrawn their application. Return fee within 30 days: If applicant is on a waiting list and was not screened within 30 days of receipt of the fee UNLESS the applicant and owner/property manager agree in writing that the time will exceed 30 days.

22 How Do I Return the Fee? Where possible, the fee should be returned to the applicant using the same form of payment used to pay the fee (e.g. check, debit or credit card) Otherwise, the fee may be paid using a check

23 What Do I Have to do If I Deny an Applicant? Provide a denial letter/adverse action letter including the content required per Federal and State Law AND Include in the letter the specific reason(s) for denial based upon the criteria used, e.g.: Eviction within the past 4 years Applicant s verifiable legal income isnot equal to or greater than three times the monthly rental amount Applicant has past due utility payments

24 And Provide copies of any paperwork and/or correspondence generated as part of the screening process where allowed by law or by third party providers, e.g.: Credit Report Criminal Report Landlord Reference Form and/or Report Employment Verification Form s that include information that was used to deny the applicant

25 And Provide a list of resources that the applicant may use to assist him or her with future applications The current statement that should be given is: For assistance with future rental applications, visit the Grand Rapids Housing Commission Rental Assistance Center, 821 S. Division Avenue, Grand Rapids, MI 49507; or call (616)

26 What Can t You Include in a Denial Letter? State law does not permit any correspondence that includes a full social security number. All documents returned to a denied applicant, such as credit reports, should have the social security number redacted. (The last four digits can be left un-redacted if your choose.)

27 What If I Didn t Deny the Applicant? Under the ordinance, even if you didn t deny the applicant, you must inform the applicant that the unit is no longer available and return the application fee where applicable.

28 Enforcement

29 Who Can File a Complaint? The complainant/applicant must have standing. Under the ordinance, an applicant with standing is someone that meets all these qualifications: Has paid an application fee. Has completed an application. An individual that has signed or intends to sign a lease in relation to the unit applied for.

30 How are Complaints Filed? Applicants may submit a written complaint within 30 days of receipt of denial (or 45 days* if no written notification is provided). Complainant must use the Residential Rental Application Fee Complaint Form provided by the City of Grand Rapids. A third party may assist the applicant with completion of the form--but the complainant must sign the form. * If the owner/pm does not send the applicant a denial letter or a letter stating the unit has been rented or taken off the market, the applicant has 45 days from the date of application to file a complaint.

31 How is the Owner/Property Manager Notified of the Complaint? A Notice of Complaint will be sent to the property owner and/or the property manager. A copy of the Residential Rental Application Fee Complaint Form completed by the applicant/complainant will also be enclosed with the mailing. This form will note the alleged violations.

32 When is the Owner/PM Required to Respond to the Complaint? Response to the City is required within 14 days of date of the Notice of Complaint. The Complaint should note where the response should be sent.

33 How Does the Owner/Property Manager Respond? Documentation should be submitted demonstrating compliance with alleged violations. Documentation could include: Copies of signed disclosure statement. Copies of the application (with privacy information redacted). Copies of application fee receipt (noting date the fee was paid). Copies of the advertisement for the specific unit. Copies of the documents noting the screening process, etc. Copies of forms or disclosures showing what costs are included in the application fee. Anything else needed to demonstrate compliance.

34 What if the Owner/Property Manager Does Not Respond to the Complaint? If the owner/property manager does not respond within 14 days of the date of the Notice of Complaint, a Notice of Violation will be issued with a response required within 7 days. If a response to the Notice of Violation is not received within 7 days, a civil infraction will be issued.

35 What if No Violation is Found? If documentation is provided that demonstrates compliance, the case will be closed with no violation.

36 What Happens if a Violation is Found and Confirmed? If documentation does not demonstrate compliance, a civil infraction (not criminal) will be issued.

37 Is the Complainant Informed of the Disposition of the Complaint? YES Upon completion of investigation, the complainant will be notified in writing of the findings.

38 What are the Fines for Violation of the Ordinance? Fines are as follows: First offense - $100 Second offense - $200 Third offense and all offenses thereafter - $1,000 In addition, if the ordinance is violated, the full application fee must be returned to the applicant. Warning: Failure to return the fee may result in a subsequent civil infraction.

39 Questions? Contact Information Connie Bohatch, Managing Director of Community Services, City of Grand Rapids (616) * cbohatch@grcity.us Property Management Association of West Michigan (616)