JANUARY 2010 LEGAL UPDATE
- Discovery of the Sexual Predator/Offender
- Raising and Lowering the Rent
- Embracing Social Media - Guest Article
- Waiver and Estoppel
Raising and Lowering the Rent
By Michael Geo. F. Davis, Attorney at Law
Since it is unlikely that the resident, who will readily agree to lower the rent, will voluntarily agree to a rent increase, this article will mainly focus on some of the landlord's available avenues for raising the rent. The final section will discuss the landlord's agreement to lower the rent.
The lease is paramount
When a lease is in force, the rent provided in the lease is controlling. It may not be unilaterally changed by either the landlord or the resident. When the lease provides for periodic changes to the rent, again the lease is controlling. For instance, a one year lease may provide for a lower rent (a rent discount or concession) for the first month or months to induce a rental. A yearly lease may provide for higher rent with an automatic annual renewal or a roll over to month to month tenancy. A multi-year lease may provide for a rent increase at the start of each new lease year.
Clarity and notice
Two common problem areas, when leases provide for periodic changes to the rent, are clarity and notice. Since it is probably the landlord's lease form, any ambiguity will be decided in favor of the resident. The lease must clearly provide when and how the rent is to be changed. If the rent increase is subject to calculation (i.e., a 10% increase), then the calculation method must be clear. If the lease provides that notice of any rent change be given to the resident, then that notice must be strictly followed. Even if the lease unambiguously provides for a rent increase without notice to the resident, a landlord would be wise to give a resident adequate warning. It is only inviting trouble to rely on the resident to remember to review the lease, assuming the resident can still find his copy.
If the rent change is based on something other than a dollar amount (e.g., the monthly rent shall increase to market rent), then the terminology (market rent) must be clearly defined. We advise that reasonable notice be given to the resident of the actual new rent dollar amount. Reasonable notice would be at least thirty days, but can be longer if the resident has to give notice to terminate the lease.
A lease providing for an initially lower rent should clearly state if it is a one time or continuing concession, if the total concession amount is applicable to the initial month(s) or spread over the entire lease, and if it is recoverable if the lease is breached. A poorly drafted rent concession or a hurriedly completed concession addendum can result in making what was intended to be a one-time concession a permanent, reoccurring concession. Florida law on the recovery of concessions is not settled, but it is certain that in the absence of explicit language mandating recovery of any concession, the rent is considered to be the lower amount, and any difference is not recoverable on lease breach.
Lease expiration and the month to month rent
The resident may be unwilling to renew the lease. If a lease term expires and the resident remains in possession and continues to pay rent that is accepted by the landlord, then a month to month tenancy is established at the old lease rent amount. Landlords should avoid this type of "unwritten" month to month tenancy. The form, Month To Month Agreement, may be used to establish a written month to month tenancy based on the terms of the expired lease but with a new rent amount. (All forms herein may be found at our firm's website, www.evict.com.) Before the lease expires, the landlord should notify the resident that he is non-renewing the lease and offering a month-to-month tenancy at a new monthly rent. To offer the resident a month-to-month tenancy, use the form, Month To Month Rent Increase Lease Ending. To offer the resident the option of a new lease or month to month tenancy, use the form Nonrenewal And Offer To Lease.
Lease expiration and the roll over to month to month
A landlord may want a lease upon expiration to roll to month to month with an increase in rent. The form Month To Month Addendum may be used to establish a rent increase when a lease rolls to month to month.
Changing the month to month rent
When a landlord changes the amount of rent, she may consider terminating the current monthly tenancy at the current rent and offering a new monthly tenancy at the new rent. Unless the prior lease or the month to month agreement/addendum provides for a longer notice, a month to month tenancy may be terminated (changed) upon 15 days' notice by the landlord to the resident prior to the end of the month. Since we are considering month to month tenancies after a lease has expired, be sure to read the lease. If the lease requires 30 days to terminate (change) a month to month tenancy, then the landlord is required to give 30 days' notice. (Note that Florida Statutes provides that the tenant has to give only 15 days' notice to terminate a month to month tenancy, but that is discussed in another article.)
The resident can reject the offer by simply vacating without further notice to the landlord, since the landlord terminated the tenancy. Therefore, the landlord should include a deadline for acceptance by the resident in the notice of nonrenewal/offer of new tenancy. This will give the landlord some indication if he is going to have a vacancy. To continue the month to month tenancy, use the form, Month To Month Rent Increase Month To Month. To offer a lease instead of continuing the month to month tenancy, use the form Month To Month Nonrenewal And Offer To Lease.
Resident holds over
If the resident remains in possession without accepting and returning the landlord's offer, then the resident is a holdover tenant subject to eviction. The landlord must be sure to return any new rental payment by the resident. Accepting any resident payment can result in reinstating the old month to month tenancy and the old lower rent.
Holding the last month's rent
Special care must be used if the landlord is holding the last month's rent. Whatever form is used, the landlord must indicate that he is applying the last month's rent to the last month of the lease or to the last month of the month to month tenancy. If the resident attempts to pay the last month, the landlord should refuse and return the payment. This action is taken to avoid the resident claiming that the old month to month tenancy continues, since the landlord still is holding a month's rent.
Pointers when giving notice
With regard to any notice from the landlord, there are some pointers to remember. First, don't wait until the last minute. The day of the notice cannot be counted in the notice time. So depending on the lease language and the number of days in the month, if a landlord waits to give the notice on the first of a month, as many do, it may not be effective for the first of next month. Second, if the lease requires mailing of notices, then notices must be mailed. The lease may require that the notice be sent by certified mail. If certified mail is required, we recommend also sending the notice by regular mail, since the resident may attempt to deny receiving notice by failing to pick up the certified mail. Third, serve the notice multiple ways: hand-delivery and posting, and regular mail if the landlord has left himself sufficient time. Fourth, if a notice requires mailing, a landlord must add five days to the notice time for mailing. If mailing is a courtesy, adding five days for mailing is prudent to avoid any potential judicial misunderstanding.
Lowering the rent
The only secret to lowering the rent is to focus on clarity. The agreement must be unambiguous and clear - how much for how long? Any change in the rent, even a one month reduction, should be done in writing. Any writing (letter, note, possibly even an email) signed by only the landlord is technically all that's needed. Knowing that, a landlord should be careful of her correspondence, including email, with the resident. We recommend that any agreement to lower the rent in a lease be in the form of an addendum to the lease signed by both the landlord and the resident. The formality of an addendum avoids the loose language used in a less formal writing. The landlord doesn't want her generosity to be the source of ill will over an unintended misunderstanding.
Avoid oral agreements
Landlords should avoid oral agreements. Despite this warning, landlords continue to agree on the telephone or in casual conversation to modify the rent "just one time", or to waive the rent or the full amount of the rent "for just this month", without putting it in writing. Almost every lease contains a clause prohibiting any oral modification of the lease. Despite this protection, landlords orally modify the lease "just this time" and regret it later, when a judge is asked to decide the extent of the oral modification.
Your landlord/tenant attorney can help you with the right form for any rent modification. Our firm is always available to assist you.
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Discovery of the Sexual Predator/Offender
by Harry A. Heist, Attorney at Law
Your worst nightmare has come true. One of your residents comes into your office with a print out from the Florida Department of Law Enforcement (FDLE) website showing a sexual predator or offender, hereinafter SP/SO, is registered at your property. He looks familiar to you. You look up the lease for the unit, and he is not on the lease. Whew, an unauthorized occupant. What if he is on the lease? Possibly he slipped through the cracks in the application process. How do you get him out fast?
Confirming Status and Address
Simply go to the Florida Department of Law Enforcement website and look up the individual in question. If the person is a SP/SO, it will show up and give a brief description of the offense along with a physical description of the individual and a photo. An important aspect of the information will be the address that the individual has registered with the FDLE. This address may be the address of the rental unit or some completely different address. If it is the address of the rental unit, you can contact the FDLE, as possibly the SP/SO is in violation of the rules regarding the terms of his probation if he is in too close proximity to children. If it is not the address of the rental unit, we urge you to call the FDLE and report the fact that the SP/SO appears to be living at your property, and that your address is NOT what is listed on the website. It is possible that the SP/SO has registered the new address but the website is not yet updated.
Contacting the resident
You immediately should contact your resident, making her aware that you know of the presence of an unauthorized person living with her on the premises and that the SP/SO needs to leave. If you get any pushback from the resident, feel free to let her know that you are fully aware this person is a registered SP/SO, not that it really makes much difference. Note that we call this person an "unauthorized person" or "unauthorized occupant". Many property managers think that just because the person is a SP/SO, this somehow makes the offense by the resident in having an unauthorized person worse, or that it will make it easier to evict the person. It makes no difference. An unauthorized poodle may be an unauthorized pet as much as an unauthorized pit bull, the latter of which may be a breed you restrict. The breed of the pet or the status of the person will not have much relevance at all on your ability to take action. The unauthorized occupant is an unauthorized occupant plain and simple, and your resident is in violation of the terms of the lease agreement if that person resides in the unit for a period longer than the lease allows. Most leases allow guests or visitors for period of 72 hours to 2 weeks, and then require the resident to get your permission for the "guest extension", thus the person does not become unauthorized until such time as the allowed guest period under the lease is exceeded. Once you contact the resident, you will most likely get the usual story, "The person is just visiting". If the person is indeed "visiting", they will be allowed to visit. "Residing" there is another story. Once you can prove the person is not simply "visiting" but is residing on the premises, you will need to put in motion your usual procedure for dealing with the unauthorized occupancy lease noncompliance, by giving notice and proving the person is in fact residing on the premises and not just visiting.
The SP/SO has your address registered
Although this is unnerving to you and your other residents or neighbors, this makes our job easier. We do not have much to prove here. The SP/SO registered his address as your property address. You serve the proper notices, and if you do not get compliance, eviction can begin. The first notice is of course the Seven Day Notice of Noncompliance with Opportunity to Cure. This gives the resident 7 straight days, INCLUDING Saturdays, Sundays and legal holidays, to get the unauthorized occupant removed. If the person is not removed and you can prove it, a Seven Day Notice of Termination is then served, and after 7 more days elapse, an eviction can be filed if you can prove the SP/SO failed to timely vacate pursuant to the original cure notice. One of the ways you can prove this is to contact the FDLE and see if the address the SP/SO registered with it is still the unit address.
Visitor or resident?
While we have dealt with this in other articles regarding unauthorized occupants, as a review, you will need to PROVE the person is not just visiting. A SP/SO is allowed to be a visitor, like it or not. Proving occupancy can be extremely difficult, because few if any property managers have 24 hour surveillance of the premises to definitively prove the person is occupying the unit as a resident and not simply coming and going occasionally or staying overnight once in a while. Ironically, if you saw a person coming each day to the unit at 9 a.m. and leaving at 3 p.m., you might assume he visits each day. If the same person came at midnight and left at 6 a.m., you would assume he is living there. These are all just assumptions and not solid evidence, and circumstantial evidence can make for tough proof cases.
Notification to other residents
Under Florida law, you are under no legal obligation to notify the other residents that a SP/SO is on the property. Much to your dismay, most will find out fairly quickly, as the word spreads fast. Some residents upon becoming aware that there is a SP/SO living near them will copy the FDLE printout and plaster your property or surrounding residences with the flyer. If you are approached by angry residents demanding what action will be taken, you simply tell them you are completely on top of the situation and are taking all legal steps to have the person removed, and that it is a legal process that takes some time.
The SP/SO is on the lease!
There are times where you run a criminal background check and a particular offense will not show up. The applicant is approved and moves in. How do we handle this situation when this person turns out to be a registered SP/SO? Suppose the person is not listed on the lease as a "resident", but is listed as an occupant. Listing an adult as an occupant is a major mistake that many property managers make. For some strange reason, property managers think that if someone does not qualify, he should just be listed as an occupant. Sometimes the applicant who is approved will ask you to list her spouse or friend as an occupant, not as a lease signer. ALWAYS have all adults who will be occupying the unit go through the entire application process and sign the lease.
The first thing you need to do if you realize that the actual lease signer or occupant is a SP/SO is to get out the application and examine if there was a misrepresentation made on the application. Go straight to the question where you ask if the applicant was convicted of a felony, and see what the answer is. If the applicant lied on the application, and your lease and/or the application has the proper wording that allows you to terminate the tenancy if a misrepresentation was made, you are in good shape. A Seven Day Notice of Termination will be given to the resident, and an eviction can be filed.
One problem we see in the question you ask of the applicant is that on most applications, you are only asking if the "applicant" was convicted of a felony. What about the "occupant"? Make sure your question always asks if the "applicant or any occupant" was convicted of a felony. This will help protect you if you made the additional mistake of not having all adults sign the lease. Check your application wording right now!
Unfortunately, there are some real, worst case scenarios due to mistakes made by the property manager. Suppose in the answer section of your criminal background question section, the applicant failed to circle either "yes" or "no". Did the applicant lie or make a misrepresentation? The argument can be made that they did not lie, and you will be in a world of trouble. ALWAYS make sure that an application is completely filled out and no spaces are left bank or questions left unanswered. Not answering a question with the hopes that it will slip through the cracks is a clever technique by an applicant to trick an unwary property manager.
Some practical tips
Get an "admission" -- If your resident "admits" to you that she has this unauthorized occupant, SP/SO or not, this "admission" can be used in court. If the resident tells you and your leasing agent, "Yes, I know, he is looking for a place to live", you and your leasing agent can testify to this in court. Of course the judge may not believe you, but it is part of our evidence we use.
Log your evidence -- Create a log of when the SP/SO's car is parked on the property, when it comes and goes, and take pictures. This type of detective work helps you win cases.
Try the "Agreement to Vacate" - If your resident is "in love" enough with this SP/SO, the resident may agree to just move out. Get the resident to sign an Agreement to Vacate, and in our opinion, release her from the lease so you can get them out as soon as possible.
Try a written promise -- It may be possible to get your resident to sign a form stating that they will have the SP/SO removed at a date certain, and if the SP/SO returns after that date, she agrees that her tenancy is terminated. This memorializes the fact that the SP/SO is actually living there, and makes it more difficult for the resident to fight you.
Call your attorney -- The last thing you need is a revolt on your property and residents wanting to break their leases because of the presence of a SP/SO on the property. Many residents, especially those with children, will want to use this as a way to break their leases, and if the matter were to be litigated, a sympathetic judge may feel that particular residents were justified in breaking their lease. The minute you find out that a SP/SO is on the property, call your attorney immediately, so you and your attorney can develop a strategy for removal of the SP/SO, resident or both.
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Waiver and Estoppel
by Brian P. Wolk, Attorney at Law
There are two legal doctrines that every property manager must understand. Those two legal doctrines are waiver and estoppel. Why? The outcome of your case may be decided based on these concepts. In short, they can operate as a "death penalty" to your case. Unfortunately, many property managers hear the words "waiver" and "estoppel" for the first time after they have lost an eviction case. The legal doctrines of waiver and estoppel show up in many landlord/tenant related matters. Our firm has written a number of articles on related topics in the past, which we encourage you to check out on our EVICT.COM website. In the current economic climate, property managers need to be "on their toes," as tenants are become more desperate and at the same time, more sophisticated, in terms of their knowledge of Florida landlord/tenant law.
What does the legal term "Waiver" mean?
Waiver occurs when a person relinquishes or surrenders his rights or privileges. It can be voluntary or involuntary. The "voluntary" waiver situation occurs when a person signs an agreement relinquishing his rights or privileges. Courts will generally uphold voluntary waiver agreements outside of the landlord tenant context, if the agreement is very specific as to the nature of the rights being waived" by the parties. However, as you will see later in this article, waiver provisions in leases by no means assure you that tenant cannot bring forward a "waiver' claim. By contrast, the "involuntary" waiver scenario takes place when the law deems that you have lost your right to defend a legal action or sue to enforce your rights because of some prior action on your part. The concept of "waiver" is explicitly written into the Florida Landlord Tenant Act. Even in cases when waiver is not addressed in the Florida Statutes, there is law resulting from previous judicial decisions, otherwise known as "legal precedent". That simply means that a prior legal decision finding "waiver" on the part of a landlord or tenant, was the basis for a later decision finding "waiver" on the part of a landlord or tenant. Usually, the facts of the prior case and the later case would be similar, but would not need to be exactly the same.
Common Waiver Scenario # 1 (Rent acceptance after seven day notice)
Ricardo, the property manager at XYZ apartments, observed one of his tenants, Betsy, brandishing a gun on the premises. Ricardo called the police, and Betsy was subsequently arrested for felonies involving firearms, an obvious violation of Betsy's lease with XYZ Apartments. After receiving the police report detailing Betsy's arrest, Ricardo instructed his attorney to draft a seven day notice of termination of lease based upon Betsy's noncompliance with her lease. Ricardo posted the seven day notice, but Betsy failed to vacate. Ricardo was left with no choice but to file an eviction action against Betsy. In Court, Betsy pointed out to the judge that a check for $700 was accepted by Ricardo the day after the seven day notice was posted. The judge dismissed the case on the spot! Why? One only needs to look at Section 83.56 (5) of the Florida Statutes: "If the landlord accepts rent with actual knowledge of a noncompliance by the tenant or accepts performance by the tenant of any other provision of the rental agreement that is at variance with its provisions, or if the tenant pays rent with actual knowledge of a noncompliance by the landlord or accepts performance by the landlord of any other provision of the rental agreement that is at variance with its provisions, the landlord or tenant waives his or her right to terminate the rental agreement or to bring a civil action for that noncompliance, but not for any subsequent or continuing noncompliance."
In this case, Ricardo in fact, accepted the rent (the $700 check) with knowledge on the noncompliance (the felony firearm arrest). Is this fair? The answer to that question has no bearing on how you should conduct yourself if you aspire to be a successful property manager. Successful property managers do not waste time "second guessing" the law. They make a conscious attempt to learn the law! One of your goals should be to understand how your actions can adversely impact your court cases if you do not understand the law in this area. It is vital that you review our article on this subject Accepting Rent and the Seven Day Notice
Common Waiver Scenario #2 (Rent acceptance after 3 day notice)
Samantha, the property manager, issued a valid Three Day Notice to Pay Rent to Esmeralda. The amount owed to the landlord by Esmeralda was $2500. Samantha requested that her attorney file an eviction action after Esmeralda's three day notice expired. Four days after the eviction was filed. Esmeralda dropped off money orders totaling $250. That day, Samantha was understaffed at her management office and mistakenly deposited the money orders. Was there a happy ending to this story from Samantha's perspective? Of course not! If rent is accepted, whether in full or in part, (notice that only 10% of the amount owed was paid), by a landlord subsequent to the service of a Three Day Notice To Pay Rent , then the landlord is deemed to have waived its right to evict the resident based on that Three Day Notice to Pay Rent. This is based on the same reasoning as in Scenario #1 above - Section 83.56 (5) of the Florida Statutes. Even though Samantha may argue that she deposited the partial payment without realizing that Esmeralda was out of compliance with the lease, judges will universally consider the deposit into the landlord's bank as acceptance, and most will charge the landlord with knowledge of the tenant's noncompliance. Some judges will still grant the eviction based upon the tenant's failure to deposit into the Court Registry the remaining 90% rent balance, but don't count on it. You should also review our article regarding the return of rent during the eviction process in order to avoid the waiver issue Returning Rent During an Eviction and Avoiding Acceptance of Rent
Common Waiver Scenario #3 (Rental assistance forms)
Tim, your tenant, is behind in rent for the month of September. "Great news" he tells you. The county housing assistance agency will pay for that month. You gladly sign Tim's housing assistance application. A few weeks later you receive the September rent check from the housing agency. The October rent, however, is not paid by Tim, and you request that an eviction action commence. At court, Tim's attorney enters his rental assistance application into evidence. You were so happy that Tim was receiving help back in September that you did not carefully review the agreement. It turns out that the assistance form is rigged with conditions. The housing assistance application stated that, "The landlord agrees not institute an eviction action for 45 days from the time payment is received". Therefore in this case, the landlord waived their right to evict Tim, because the eviction action was filed prior to the 45 day grace period expiring. These forms frequently limit the rights of property managers and landlords and can be very dangerous. Our firm advises our clients not to sign those forms. For much more detailed analysis I would strongly recommend that you read our article on this subject The Dangers of Rental Assistance Forms
Common Waiver Scenario #4 (Partial or late payment of rent )
This is the "classic" Estoppel case. Charlie paid rent late every month for 6 months. In fact, he paid his rent on the last day of the month. On the seventh month, the property manager decided that she had enough of this nonsense and instituted an eviction action against Charlie. In court, Charlie's lawyer asks the judge to throw out the case based on the doctrine of Estoppel. The judge agrees. The same result often happens when the property manager constantly accepts partial payments. As we have pointed out numerous times in this newsletter and in seminars, the tenant is actually being rewarded for bad behavior in these cases. Why? Courts will rule that the doctrine of estoppel will apply if : 1. Words and admissions, or conduct, acts, or all combined cause another person to believe the existence of a certain state of things 2. In which the person speaking, admitting, acting and acquiescing did so willfully, culpably, or negligently, 3. By which such other person is or may be induced to act so as to change her own previous position injuriously. What does that mean? If the property manager is giving the impression to the tenant that the terms of the lease need not be followed, then the landlord seriously jeopardizes her ability to enforce the terms of the lease. Our article in the November 2008 Newsletter is a must read! Partial Rent Acceptance This situation also comes into play when you do not act promptly to remove an unauthorized resident (link to our article "authorizing the unauthorized resident) or when the property manager serves notices after a non-renewal notice is issued (link to our article "No more notices after Non-Renewal). You should also be aware that under Florida case law, some judges have ruled that serving a Three Day Notice upon a tenant voids all earlier Three Day Notices. You should not give the tenants any Three Day Notices while an eviction action is ongoing!
Does the "No Waiver" provision in my lease protect me?
It may not! Courts will often not allow a landlord to defeat potential waiver defenses by including favorable language in their leases. Many courts take the view that these provisions are against public policy. In addition, many judges may determine that such a clause violates Section 83.45 of the Florida Statutes (Unconscionable Rental Agreement) or Section 83.47 (prohibited lease provision) if those judges believe that you are attempting to take away from the tenants protections already granted to them by the Florida Landlord Tenant Act (Chapter 83 of the Florida Statutes).
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Look Before You Leap
Making Informed Business Decisions as You Embrace Social Media
This article written by Doug Chasick, Senior VP, Multifamly Professional Services with CallSourceยฎ, and Nadeen Green, Senior Counsel with For Rent Media Solutionsโข. The information contained in this article is not to be considered legal advice, and the authors and their respective companies strongly recommend that you consult with your own counsel as to any questions or problems you may have. Doug and Nadeen can be reached at email@example.com and Nadeen.Green@ForRent.com.
It's not just about stone tablets anymore (even if those of you who know the authors of this article may think we put this article together using them). We no longer rely solely on print to convey our messages and information, and the once-exotic website is now oh-so-last century as many of you text, tweet, IM, jabber, blog and whatever, just about every waking moment.
And while some in the multi-family housing industry are still dragging their collective heels in participating in this modern technical world, many industry folks are embracing it with enthusiasm. Often those folks are the marketing innovators with the vision of communication with rental prospects and residents alike through social media.
But keep in mind that while fire is used to keep us warm, it can also be used to destroy; knives are valuable implements, but can be used as weapons; and social media is a great tool, but it can also be harmful if not used wisely. And wisdom requires knowledge; with the knowledge of risks, your decisions will be informed. So your authors want to provide you with some of that knowledge, so that perhaps you can avoid possible pitfalls, with the emphasis on possible. (Goodness knows that courts will have a fine time trying to apply long-held legal principles to the fast and ever-changing world of technology and communications.) We are not telling you to avoid the use of social media in the marketing of your community and in the communication with your residents; we are only suggesting that you keep your eyes and your minds open.
Let's start the discussion by talking about basic or "static" websites, where you control all the content. This website is a form of advertising, and as a practical matter it is no different than any form of traditional advertising, so the same rules apply. Your self-promotion must be true, or it is false advertising. What you write about others must be true, or it is libel. You have to be aware of consumer laws (watch out for sweepstakes or drawings that are really illegal lotteries), and you have to honor the trademarks and copyrights of others.
Let's not forget about the fair housing considerations: The purpose of a website is to advertise the community and all content (that means both words and pictures) must be fair housing compliant. Quite simply, that means that a "reasonable person" looking at your website should not see anything that would suggest "any preference, limitation or discrimination because of race, color, religion, sex, disability, familial status or national origin." This means that the words that are used, the directions that are given, the symbols that are used, and the pictures that are shown cannot indicate that type of preference, limitation or disability. And the days of using Barbieยฎ and only Barbieยฎ in your advertising should have long been over. She is tall, blond, beautiful and white, but that is not the case for everyone. White only advertising is a costly fair housing sin. Finally, remember the EHO logo. It should be used on all of your advertising, and that includes your websites.
Now let's move on and talk about a website where others can post information. Are you liable for what they post? The answer is, "it depends". It depends upon how much control you exert over those external postings. You may have heard of the Craigslist.com case; they were found not to be liable for what others posted on their website (and we are talking about fair housing violations here). That is because they didn't review or control the postings, they simply allowed them to be placed; and if a bad thing was posted and Craigslist found out, they pulled it immediately. Under the Community Decency Act of 1996, Craiglist is an ISP and thus immune from liability for what others post. (But as a side note, the National Fair Housing Alliance wants to see the CDA be amended to say that even if there is no review or control, there should be liability if it is a fair housing issue. Ouch! While the NFHA has not said whether they will try to make such a change happen, this is scary.)
But there was a different result in the Roommates.com case. In that case the postings for the type of roommate wanted (or not wanted as might be the case!) came from the on-line form they provided. So Roommates.com was in essence controlling the content posts (with their fair housing repercussions), and they did not have protection under the Community Decency Act. So it's all about control. The more the message is controlled, the more likely the accountability.
And that brings us to the current enthusiasm for social media and its use as an advertising medium, whether it be Facebook, Twitter, YouTube or a blog. Is social media a form of advertising? Once again, the answer is, "it depends". It depends on what a judge or jury might say about this. If we held a gun to the heads of multi-family professionals who are using a fan page on Facebook or who are sending "Tweets" (Note: these authors do not necessarily advocate holding a gun in such a manner, nor are we planning to do so), you would ultimately have to admit that the ultimate goal is effective marketing of your community or company. And that sure sounds like advertising to us.
This all raises lots of issues and questions, but doesn't allow for many clear answers! Social media can be a cost-effective and enormously successful form of advertising, but you need to make informed business decisions. You need to know what questions you should be asking before you take the leap into social media. Based on our experience, we suggest you start here:
1. You don't need an active voice in the world of social media for people to be talking about you (feeling paranoid yet?). When people post comments - good or bad - will you respond, and if so how? Will you apologize for a mistake you made? Will you try to correct what you believe is inaccurate?
2. And just who will be in charge of all of this responding, apologizing and rebutting? Who will be your voice?
3. This can all be time consuming. Will you be "known as a company that listens and participates", as described by Mark Juleen with J.C. Hart in the October 2009 Units magazine? Or will the time investment push you or your staff "over the edge", which is the concern of Lori Snider, apartment consultant interviewed in that same Units article, "Look Who's Talking". How much time will be committed to monitoring and responding?
4. Where will your voice be heard? On your own website or blog? Through posts on the websites and blogs of others?
5. Since you must be concerned about fair housing issues, what will you do if someone says something inappropriate about their neighbors (that's right - your residents will be posting too!) or your prospects?
6. What about the "over-the-top compliment" - could that be sexual harassment?
7. Who is doing your blogging or tweeting or Facebooking (is that a verb?) for you? Are you giving them something (maybe a discounted rent, favorable lease terms or even an actual payment) to do that? Are they saying nice things? Then that is an endorsement or a testimonial, and either way they must tell that they are getting consideration for saying those nice things. In fact, you need to direct the person that they cannot make unsubstantiated claims about your community and that they must disclose any material connection between the blog and you (such as that rental discount). You should also monitor those solicited blog posts to assure compliance, and your internal rules should either prohibit your employees from posting any reviews of your community or doing so without revealing their connection to you.
8. Which brings us to the question, when is an employee "yours" - with all the attendant responsibility on your part for their actions - when s/he is "on the clock" or when s/he is on their "own time"? The number of people with personal blogs and/or Facebook, Twitter, You Tube, etc. accounts increases daily, and it's likely your employees are in the blogosphere, even if your business isn't, so how will you manage the constant stream of comments?
9. And that brings you to training. Will you train your employees in the proper use of your social media? Will you give them paternal advice on the proper use of social media in their personal lives? Just as the purely innocent remark can get us into trouble (fair housing, anyone?), so can the well-intentioned post or comment bring about unexpected and unpleasant consequences.
This article has given you way more questions than answers. The world of social media is a world that is quickly evolving. Keep your eyes open, your ears to the ground, and know exactly to where you are leaping. This will help you to better land on your feet, and perhaps not in a courtroom.
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