Landlords: Beware of Claims of Discrimination
Landlords need to be aware that federal and state antidiscrimination
laws limit what you can say and do in the tenant selection process. You
need to keep in mind the following points:
1. You are legally free to choose among prospective tenants as long as
your decisions are based on legitimate business criteria. You are entitled
to reject people for the following reasons:
* poor credit history
* income that you reasonably regard as insufficient to pay the rent
* negative references from previous landlords indicating
problems - such as property damage or consistently late rent payments
- that make someone a bad risk
* inability to meet the legal terms of a lease or rental
agreement, such as someone who can't come up with the security deposit
or who wants to keep a pet and your policy is no pets
2. Antidiscrimination laws specify illegal reasons to refuse to rent
to a tenant. The federal Fair Housing Act (42 U.S. Code 3601-3619) prohibits
discrimination on the basis of race or color, religion, national origin,
gender, age, familial status (children) and physical or mental disability
(including recovering alcoholics and people with a past drug addiction).
3. You cannot discriminate on the basis of marital status or sexual orientation.
For information on state and local housing discrimination laws, contact
your state fair housing agency. For a list of state agencies and contact
information, see www.fairhousing.com/resources/finder/index.htm, a Website
maintained by the national Fair Housing Advocate Online.
4. Be considerate when dealing with prospective tenants. Treat all tenants
equally. For example, if you require all prospective tenants to meet the
same income standard and to supply satisfactory proof of their legal eligibility
to work, you will get the needed information but in a nondiscriminatory
way. 5. Show the property to and accept applications from everyone who
is interested. Politely take all applications even if you have doubts
about a tenant's qualifications. Make decisions later about who will rent
the property. Keep copies of all applications
OAHU DISTRICT COURT DATA IS NOW ON THE WEB
Circuit and Family Court data have been available on the
Internet for some time.
Civil cases filed after November 15, 2001 in the Oahu District Court is
now available through its Website at www.state.hi.us/jud.
When accessing the Judiciary home page, users can click on "Records"
and proceed to the Hoohiki records data site. Users can get information
on court appearances, date, time, description, minutes of the hearing
and disposition of the case.
This link is also available in the Links & Resources section of our
Website, http://www.attorneyhawaii.com.
A CRACK IN THE PROTECTION AFFORDED TO TENANTS BY THE ENTIRETY
A recent case entitled United States v. Craft, decided on April 17, 2002
(Slip Op. No. 00-1831) may be of interest to people who hold property
as tenants by the entirety.
Sandra Craft and her husband owned property in Grand Rapids, Michigan,
as tenants by the entirety. Sandra's husband failed to pay federal income
taxes and the Internal Revenue Service filed a notice of tax lien in Michigan.
After the notice of tax lien was filed, the couple jointly executed and
recorded a quitclaim deed purporting to transfer the husband's interest
in the property to Sandra for one dollar.
After reviewing the common law of concurrent ownership, the Court held
that according to Michigan law, respondent's husband had rights in the
entireties property, among them: the right to use the property, the right
of survivorship, the right to become a tenant in common with equal shares
upon divorce, the right to sell the property with the respondent's consent,
and the right to block respondent from selling or encumbering the property
unilaterally. These rights, the Court concluded, constituted "property"
or "rights" to "property" to which the federal tax
lien attached. The Court declined to attempt to value these rights, however,
and remanded the issue as to property valuation to the Sixth Circuit Court
of Appeals.
The Craft decision changes what had been the rule applied in the U.S.
District Court for the District of Hawaii. Previously, citing Sawada v.
Endo, 57 Haw. 608, 561 P.2d 1291 (1977) and In Re Estate of David Au,
59 Haw. 474, 583 P.2d 966 (1978), the Hawaii federal district court had
previously ruled that under Hawaii law an IRS lien against one spouse
does not attach to property held as tenants by the entirety. Theo. H.
Davies & Co., Ltd. v. Long & Melone Escrow, Ltd. 876 F. Supp.
230 (D. Hawaii 1995).
The net effect is that it is now not certain whether debts of one spouse
will affect the property if the property is held as tenants by the entirety.
We know of no Hawaii cases yet involving this issue. You should still
consider holding property as tenants by the entirety. You need to be aware
that the automatic protection of the property from the debts or claims
of one's spouse is not as absolute.
NEW LAWS
Five bills passed in the most recent legislative session offer a measure
of protection to condominium owners.
HB 1713 (Act 140) requires 10 days prior written notification to an apartment
owner if the owner is to be charged fees and costs in responding to a
request for information. For example, if a condominium board is asked
a question and the Board refers the matter to its attorney, HB 1713 requires
10 days prior written notice to the requesting owner of any costs and
an opportunity to withdraw an information request and to avoid the fees
or charges.
HB 1715 (Act 141) allows condo boards one year to obtain approval of the
required 65 percent of owners for any proposed changes to a condominium
bylaws. This puts proposals originating from owners' associations and
independent committees of owners on an equal footing.
In a past newsletter, we advised you of the law that was passed last
year requiring an attempt be made to first mediate to resolve condo disputes.
HB 1716 (Act 142) requires each side to pay their own expenses unless
they agree on another arrangement.
SB 2289 (Act 137) Relating to Condominium Property Regimes gives a board
of directors of a condominium association the authority to install telecommunications
equipment in project common areas to account for obsolescence or provide
an equivalent function by a different means.
HB 2413 Relating to Condominium Property Regimes allows the owners association
of a condominium partially converted to fee simple to acquire the remaining
fee interest in a bulk sale if 75% of the remaining lessees approve a
declaration amendment authorizing the sale. At the time of printing this
newsletter, this bill is still awaiting the governor's signature.
FROM THE DESK OF HAROLD CHU...
There is no question that our society is more litigious. In our lead
article, we offer some suggestions to landlords on how to minimize their
exposure to claims of discrimination.
In Hawaii, it is quite common for husband and wife to own property as
tenants by the entirety. Reciprocal beneficiaries can also hold real property
in a manner that is similar to tenants by the entirety. It was commonly
believed that when you held property as tenants by the entirety, a judgment,
claim or lien does not affect the property unless the judgment, claim
or lien was against both spouses.
On page 2 of this newsletter, we discuss the case of United States v.
Craft. This case does not automatically invalidate the protection of tenants
by the entirety, but suggests that spouses and reciprocal beneficiaries
need to be prudent in addressing their debts, liens or claims to minimize
any potential effect on property held as tenants by the entirety.
We are advising you of several new laws in this newsletter. We will be
attending a legislative update seminar in July and expect to offer additional
information on the new laws in our next newsletter.
There were significant changes in the tax laws in 2001. One such change
was the higher limits on contributions to IRAs described on page 3 of
this newsletter. In an upcoming issue, we will be providing further insight
into the popular 529 plans and some suggestions as to how you might utilize
such plans in your financial planning.
The Internet is becoming a common source for information. We have set
forth on pages 1 and 4 some information that is now available on the Internet.
These additional resources are also available at the Links & Resources
section of our Website, http://www.attorneyhawaii.com.
Have an enjoyable and safe summer!
NEW IRA CONTRIBUTION LIMITS
In response to several inquiries, I have listed the new contribution
limits for IRAs in a simplified chart.
The maximum annual IRA contributions have increased for all participants.
Older participants can contribute more to allow them to "catch up".
See the table below.
Annual Contribution Limits for Traditional and ROTH IRAs
Under the Age 50
Year Age of 50 and older*
2002-2004 $3,000 $3,500
2005 $4,000 $4,500
2006-2007 $4,000 $5,000
2008 $5,000 $6,000
*For individuals who attain the age of 50 before the close of the
taxable year.
HUMOR
A kindergarten pupil told his teacher he'd found a dead cat. She asked
"How do you know that it was dead?" "Because I pissed in
its ear and it didn't move," answered the child innocently. "You
did WHAT?!?" the teacher exclaimed in surprise. "You know,"
explained the boy, "I leaned over and went 'Pssst!' and it didn't
move."
********
ADVICE FOR THE DAY!
Be nice to your kids. They will choose your nursing home.
********
Every night, Frank would go down to the liquor store, get a six-pack,
bring it home, and drink it while he watched TV. One night, as he finished
his last beer, the doorbell rang. He stumbled to the door and found a
six-foot cockroach standing there. The bug grabbed him by the collar and
threw him across the room, then left.
The next night, after he finished his 4th beer, the doorbell rang. He
walked slowly to the door and found the same six-foot cockroach standing
there. The big bug punched him in the stomach, then left.
The next night, after he finished his 1st beer, the doorbell rang again.
The same six-foot cockroach was standing there. This time he was kneed
in the groin and hit behind the ear as he doubled over in pain. Then the
big bug left.
The fourth night Frank didn't drink at all. The doorbell rang. The cockroach
was standing there. The bug beat the daylights out of Frank and left him
in a heap on the living room floor. The following day, Frank went to see
his doctor. He explained the events of the preceding four nights. "What
can I do?" he pleaded. "Not much" the doctor replied. "There's
just a nasty bug going around.".
NEW RESOURCES
We recently added some informative sources to the Links and Resources
section of our Website. The following are recent additions which may be
of interest to you:
HawaiiS.com - http://www.hawaiis.com/
Listing of foreclosures and apartments for rent.
CompareInterestRates.Com -http://www.compareinterestrates.com/state/hawaii/hi_products.asp
Current Hawaii mortgage rates with information on points, rate locks,
PMI, and closing costs. Personal mortgage rate quotes available from Hawaii
lenders.
Hawaii Mortgage Online - http://www.amo-mortgage.com/Hawaii/
Easy to use site with live mortgage rates, calculators, and
secure application tools.
Hawaii Real Estate Exam Book - http://hawaiirealbooks.com
Advertisement for study guide to the state section of the Hawaii real
estate exam. Table of contents, author biography and testimonials.
The Census Bureau's Annual Statistical Abstract of the
United States - http://www.census.gov
Statistical information on a wide range of topics about Americans.
www.state.hi.us/jud - hit "public records" Information on
Civil cases filed after November 15, 2001 in the Oahu District Court.
Attorney:
Harold Chu
hchulaw@lava.net
Publisher/Editor:
Cora Anderson
canders@lava.net
Secretaries:
Cora Anderson
canders@lava.net
Printer:
NewTech Imaging
Phone: (808) 523-7544
Fax:: (808) 526-1231
E-mail: hchulaw@lava.net
http://www.attorneyhawaii.com
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