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“SCREENING” CAN EMPTY YOUR BANK ACCOUNT!
By
Jan Bergemann
Published
November 9, 2012
Screening
may seem like a good idea – helping to keep the disreputable
people out of your community – but it may also empty your bank
account – if it isn’t done correctly.
Make
no mistake, not every association has the right to screen and
even reject possible new owners and/or renters.
Before
you even consider making such a move, please make sure that your
governing documents give you the right to do so.
Before
you even start telling possible owners/renters that they are not
welcome in your nice community, make sure that you have
fool-proof guidelines in place – in writing and written with
common sense. Absolutely avoid vague wording – make sure there
are no IFs, BUTs and MAYBEs in the wording of these guidelines.
You
are closely watched by the guard dogs of Fair Housing and
Americans with Disabilities Act – and violations can be very
costly.
I
will never forget the story of the condo president who greeted a
potential condo buyer (the offer was all cash) with the words:
“Sir, we are a good Jewish community and we are not very fond
of Hispanics!”
The result of this statement: The seller lost a buyer and all
neighbors had to pay their fair share to pay for the legal fees
and the penalty after the Hispanic filed a lawsuit.
And
never forget: Screening is meant to keep bad neighbors out of
your community. It’s not meant as a source of extra income.
The charge is limited to $100 for each application. I got once a
complaint from a homeowner (military) who needed to rent out his
home because he was sent abroad. The board rejected his first
four potential renters – and charged $100 for each screening.
The fifth candidate finally passed – and the owner was out
$500. He asked other owners in that community – and found out
that this was a pattern the board commonly used to add to the
association income.
In
this case there was no big lawsuit. But the owners, after
finding out about the “tricks” of the board, initiated a
recall and removed the board of directors. Still better than
paying for a juicy lawsuit!
But if you still feel that screening will be good for the
community -- and you have created all the necessary guidelines,
please don’t let the
CAM
do the interview and run the show. It may be more convenient for
the members of the board, but the liability still stays with the
association – especially if the
CAM
makes serious mistakes and asks the wrong questions.
Screening
may be an asset for the community – if done correctly, but it
is a huge liability if the folks in charge don’t know what the
heck they are doing. It’s a very touchy job!
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