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NEW!!!
Broad Guidance Regarding Fair Credit Reporting Act
The Federal Trade Commission recently issued new guidance regarding the Fair Credit Reporting Act, having significant impact on Property Managers and Landlords.
The first aspect of the Act that has been broadened relates to what kinds of "consumer reports" are covered and therefore trigger the notice requirement to the consumer. Previously, only consumer reports issued by credit bureaus, such as Trans Union, Experian and Equifax, triggered notice. Reports from tenant-screening services, reference-checking services, and other information providers that either use credit reports from a credit bureau or rely on information about the tenant's rental history also require tenant notice.
The second aspect of the Act that has been broadened relates to "adverse actions" that a landlord or property manager may make based "even in small part" on the credit report defined above. According to the guidance, any of the following constitute an "adverse action":
Refusing to rent
Requiring a co-signer on the lease
Requiring a deposit, if deposits are not required of other tenants
Requiring a larger deposit than would be required of other tenants
Requiring a higher rental amount than would be required of other tenants
If the Property Manager or Landlord takes an adverse action, he must provide the consumer with an adverse action notice that includes the name and contact information for the consumer-reporting agency. The adverse action notice must also state that the agency did not make the adverse decision and that the consumer has the right to dispute the accuracy of the report and to request a free report within 60 days. The consumer may also have a "consumer statement" included in the consumer report.
The Consumer Rights (Adverse Action Notice) on the back addresses the above issued. Please review it carefully and have your attorney review it as well to determine if you need to modify it to cover any unique circumstance of you own tenant evaluation process. You may not rely on the letter as legal advice or as assurance of compliance with the Act.
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