Considerations for tenants facing condo conversion

Rent it Right

By Inman News Feed
Add Comment Add Comment | Comments: 0 | Posted Jun. 21, 2012

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Rent it Right

Janet Portman
Inman News®

Q: We're thinking of renting in a building that, rumor has it, may become condos. What do we need to think about? --Miguel and Sarah

A: Many states regulate the conversion of rental units to condos. They limit the number of conversions and give existing tenants first dibs on buying the units.

If the rumors of conversion are credible, think first about whether you'd like to buy the unit. You may not be able to answer this without having lived there, however. But it's a first step -- if the answer is a likely yes, then it may be worth your while to rent and suffer the disruptions that will happen during the conversion process.

First, the conversion process usually involves a map or plan, which can be involved and technical. You'll need to be familiar with it, and may need some help figuring it out. You may then enter a period of public comment on the project, which can be lengthy and, if the project is controversial, draining.

Clearly, learn whether the owner must offer existing tenants the right of first refusal once the units go on the market, and assess whether you're likely to have the funds to make an offer. If you don't think you'll have the funds, or wouldn't want to buy there anyway, find out whether state or local law requires the owner to offer relocation help to displaced tenants.

Q: We are about to hire a resident manager. We've always had a policy of asking whether applicants have ever been arrested or convicted; if the answer is "yes" to either question, we reject. Why take a chance, is what we figure. Is there anything illegal about this policy? --Lisa G.

A: You are on the right track to be concerned about the background of any resident manager you might hire. This person will have access to tenants' homes and information, and you certainly would not want anyone whom you did not trust to be in this position. Thorough screening is a good idea.

In fact, if you fail to screen and end up hiring someone with a recent criminal past who commits similar crimes on your property against your residents, you might find yourself at the other end of a civil lawsuit brought by the affected tenants. They might argue that you were negligent in your hiring process, putting them in a position of foreseeable harm.

But is your policy of "reject all, no matter how old or relevant the conviction or arrest" a good idea? Arguably, it casts too wide a net. Some convictions, and certainly some arrests that don't lead to convictions, might not be relevant at all.

For example, do you really think that a juvenile conviction for joy riding, which happened 20 years ago to an otherwise law-abiding and acceptable applicant, should worry you? And suppose someone is arrested and then released, when the police realize they've got the wrong person how does that experience make your applicant any less qualified and appropriate for the job?

For years, employment lawyers have wrestled with this question, with some cautioning employers not to automatically reject applicants with mere arrest records. The reasoning behind this advice includes not only the "not relevant" point just raised, but a realization that certain protected classes (particularly minorities) are statistically more likely to be arrested than others. When these people experience automatic rejections from employers, the employers' practices are said to "negatively impact" the protected class, which is against the law.

Recently, however, the Equal Employment Opportunity Commission (the "EEOC") has provided clear guidance on the wisdom of policies just like yours. (Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964. http://www.eeoc.gov/laws/guidance/arrest_conviction.cfm). While the EEOC's guidance isn't law, it is powerful and will be heeded by many judges (particularly federal judges).

The commission suggests that employers devise a list of specific criminal convictions that would make a job candidate unfit for the position, and focus its attentions on whether the applicant has any of these. The age of the conviction should also be a factor. Employers may still consider the behavior that led to an arrest, but the arrest itself is not necessarily relevant.

Apartment owners can still do their job to diligently screen applicants under this new guidance. Recent convictions for assaults, burglaries and crimes of dishonesty are certainly relevant; as would be the report from a former employer, who tells you that he suspects the candidate stole from him, but the arrest didn't lead to a criminal charge. You don't need proof beyond a reasonable doubt; you do need solid evidence that any reasonable landlord in your position would heed.

Janet Portman is an attorney and managing editor at Nolo. She specializes in landlord/tenant law and is co-author of "Every Landlord's Legal Guide" and "Every Tenant's Legal Guide." She can be reached at janet@inman.com.

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