A recent case showed that sometimes an agency that does not have the usual association with land use decisions may nonetheless make land use decisions that can only be challenged under the Land Use Petition Act which has a very short 21 day period for filing such challenges. In this case a rural homeowner bought an RV for use by overnight guests and put in a holding tank for wastewater. State law says that holding tanks are illegal for residential purposes but the county health board can grant waivers of this provision on a case by case basis. The homeowner asked the health board for a waiver but was turned down on the basis that it was perfectly feasible for him to expand his existing septic system or put in a new one just for the RV. About two months later the homeowner filed a lawsuit in superior court, challenging the sections of the county code under which the county health board had denied his request for a waiver. The Court of Appeals decided that since the effect of the health board's decision was to regulate the homeowner's use of his land, that decision was a "land use decision" that could only be appealed under the Land Use Petition Act. Since the lawsuit was filed more than 21 days after the denial of the waiver request, the homeowner was out of time and his arguments could not be heard. The court has said that "even illegal decisions must be challenged in a timely, appropriate manner." So it is important in deciding to challenge government administrative action to decide whether that action is a land use decision that is subject to the shorter appeal period, rather than other types that are subject to a thirty day period.
The preceding is for instruction and should not be considered legal advice. Please see my website at http://www.seattle-realestate-lawyer.com/aspx/m/Real-Estate
Tuesday, June 14, 2011
Medicaid Support-- One Size Does Not Fit All
A recent administrative law case showed that the Department of Social and Health Services cannot adopt rules that have the effect of imposing "one size fits all" measurements on people who require Medicaid assistance due to developmental disabilities. In this case the Department had determined that a fifteen year old girl with severe developmental disabilities was eligible for twenty-four hour a day institutional care for managing the tasks of daily living. The girl lived with her mother who was her care giver and was enrolled in a program that allowed her to receive benefits for living at home rather than being institutionalized. This was reflected in a determination by the Department that the girl should receive Medicaid Personal Care in the amount of ninety hours per month. Then in 2005 the Department adopted a rule that presumed that a portion of a child's care was for development, not due to medical need, and that a portion of the child's care that was provided by a parent living with the child would substitute for the otherwise required Medicaid Personal Care. These presumptions could not be challenged by medical evidence. In fact the girl had a physician's report that said she needed ninety six hours of Medicaid Personal Care per month but there was no place to present that evidence. The Supreme Court decided that the Department's rule presumptions violated federal law that requires comparability of Medicaid benefits among similarly situated people. The court invalidated the Department's "one size fits all" rule and upheld an award of over $85,000 in attorneys' fees to the girl.
The preceding is for instruction and should not be considered as legal advice. Please see my website on administrative law at http://www.seattle-realestate-lawyer.com/aspx/m/Administrative-Law
The preceding is for instruction and should not be considered as legal advice. Please see my website on administrative law at http://www.seattle-realestate-lawyer.com/aspx/m/Administrative-Law
Monday, June 13, 2011
Fair Housing Laws and Lease Purchases
I suggest that there are reasons to consider fair housing laws when one uses a lease purchase or lease option as an exit strategy for a residential investment. Some people may have the impression that it is of little concern to the investor who is marketing a property through a lease purchase or lease option, how the investor treats the several potential buyers who may come to view the property with respect to one another.
It is important to recognize that a lease option or lease purchase still is, for purposes of fair housing laws, a real estate transaction that is subject to those laws. The fair housing laws are designed to prevent discrimination in housing based on certain categories of potential buyers or renters of housing. In Washington in the Seattle area there are four levels of government whose mission it is to enforce laws against discrimination in housing. Those levels are federal, state, county and city. Each level of government may have slightly different standards of what classes are protected. For example, the federal classes under Title VIII of the Civil Rights Act of 1968 as amended are race, color, religion, sex, handicap, familial status or national origin.
The City of Seattle’s Unfair Housing Practices Law includes all of the federal categories and adds ancestry, creed, housing subsidy, age, sexual orientation, gender identity and political ideology. Each of these levels of government has its own enforcement mechanism.
The investor who has a property to sell under the lease purchase approach may wonder, “How does this affect me? I am trying to sell a property and all I care about is whether the tenant buyer can pay the rent and become qualified for a mortgage over the term of the lease, which is several years.” The answer is that if members of a protected class are unsuccessful in leasing or buying the property, they may conclude that the treatment they received was as a result of their membership in the protected class and they may then file a complaint. The investor may or may not know at the time he deals with a group of potential lease purchasers that there are members of one or more protected classes in that group.
Assume that the investor is marketing a house and places an ad inviting people to call about the possibility of a lease purchase of the home. The investor receives several calls and sets up an appointment at which he expects several of the interested callers to appear simultaneously. This approach is designed to heighten the potential buyers’ enthusiasm for the property. The several interested callers show up at the appointed time, and based on what the investor knows from the telephone conversations he ignores some of the potential buyers who are on the property and spends all his time with those he finds most promising. The investor takes applications from several interested people but he does not log them in according to the time of receipt. The investor then decides among the promising applicants and awards one the lease purchase, but does not document the reasons for rejecting the other applicants.
Has the investor done anything that would be grounds for a fair housing act enforcement case? The answer is possibly, depending on whether any of the rejected applicants or those people who came to the home for the showing and were ignored by the investor, are members of a protected class. By ignoring some potential buyers who came to the showing and courting others, the investor has clearly discriminated. By selecting one applicant for the lease purchase and rejecting others, the investor has also discriminated by necessity since there was only one house to sell. The issue is whether the discrimination was legal or whether it was improper based on the protected classes.
What could happen in a fair housing enforcement case? At a minimum the investor would have to answer a claim of discrimination. If the agency pursued the case, the investor could be liable for money damages to the rejected member of the protected class and civil penalties. The civil penalties under federal law are $16,000 per violation and under state law in Washington are $10,000 for a first violation, up to $50,000 per violation for a person who has a history of violations. In Washington the Human Rights Commission may go to court to prevent the investor from selling the house to someone other than the complaining member of the protected class.
It is clear from this information that success by an investor in deflecting any claim of a fair housing law violation will depend both on acting in a nondiscriminatory way toward all potential lease purchasers and in creating and maintaining good records of that behavior. If a disappointed potential lease purchaser is a member of a protected class and claims that the treatment he received was the product of illegal discrimination, it is going to be records that will stand as the investor’s defense. Investors should consult their own counsel on how to create appropriate records for this purpose.
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