Credit Disputes For Boston Renters: Attorney Insights For Lease Approval – Last week there was a rather interesting lawsuit out of Massachusetts that caught my attention. You might be thinking – “What does Massachusetts have to do with Texas or Michigan?” Well for one, Vineyard Vines makes great clothes that look good no matter what state (physical or mental) you’re in. And for two, the decision in this lawsuit could affect multifamily tenants across the country.

Obviously, since it’s from a federal district court in Massachusetts, it doesn’t directly affect Texas owners. But the question may be a common one affecting the courts or plaintiffs here. As a result, I think it’s a topic worth discussing. So let’s do it.

Credit Disputes For Boston Renters: Attorney Insights For Lease Approval

So the basics of the case are this – a property management company in the Boston area used an outside company, SafeRent Solutions LLC, to conduct tenant screening. And then using that information to determine whether to rent an apartment to potential tenants.

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SafeRent used an automated algorithm in its screening to determine if a tenant qualified for the apartment community. This provides a SafeRent Score that is based on several factors, including credit history, bankruptcy records, past due bills, payment performance and eviction history. But apparently there was no special human contribution. It was simply a computer algorithm.

However, both the landlord and SafeRent were sued as part of a class action. In that lawsuit, the Plaintiff alleged that SafeRent’s algorithm is largely calculated on factors that produce disproportionately lower SafeRent scores for black and Hispanic applicants. And the factors it considers don’t necessarily indicate higher-risk tenants. As a result, it violated the Fair Housing Act.

In response, SafeRent argued that the algorithmic screening program is not subject to FHA standards. It claimed that it is simply an algorithm that provides owners to make their decision. SafeRent does not make decisions for the tenant alone.

So far, SafeRent’s arguments have not been convincing to a Massachusetts court. The court said there was enough evidence in the plaintiff’s complaint to show that SafeRent provided a unifying result based solely on its algorithm that the landlord could not change. And SafeRent knew that the landlord was solely relying on that result to make the rental decision.* As a result, SafeRent is subject to the FHA and therefore, plaintiff’s lawsuit is allowed to proceed.

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So what does this all mean? Should Texas owners be concerned? Well yes. And no. And that means a lot. Or maybe nothing. Does that clear it up?

First, this ruling is from a federal district court in Massachusetts. Massachusetts courts have no precedential value for Texas courts. As a result, technically this decision means nothing to Texas owners.

But it is not uncommon for courts to look to other areas for guidance and reasoning. Therefore, if a similar case were to arise in Texas, a court could review this Massachusetts decision. So he is potentially influential in a Texas court.

And, of course, the defendant can appeal the decision. And if that happens, then the District Court and potentially the Supreme Court could rule on the matter. The decision of the District Court would not be a direct precedent, but it would be even more influential than the decision of the District Court. And, of course, the Supreme Court ruling will be the law of the land.

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However, the most likely reason Texas owners should take note is that this decision is very likely to give a boost to other plaintiffs across the country. And maybe right here in Texas. And that could mean Texas landlords could be sued for violating the Fair Housing Act for engaging with some tenants. At the very least, it’s something owners should be aware of. We have the multi-jurisdictional capabilities and experience to guide our clients skillfully, cost-effectively and successfully through disputes nationwide while, at the same time, understanding the unique aspects of the federal and state court systems, including specialized state business courts. Eckert Simmons’ commercial litigation lawyers advise clients on business disputes across a wide range of local, regional and national industry sectors. Our litigators have extensive experience in a variety of business and consumer disputes. Our team has established an excellent reputation for effectively providing high quality, timely and efficient services to clients at a competitive cost in a variety of sophisticated and high commercial litigation matters in areas such as:

Our diverse client base ranges from international Fortune 100 companies, public and private companies, banks, manufacturers, professional services firms, insurance companies, construction companies, healthcare providers, colleges and universities, hotels and hospitality management companies and government entities. Successfully resolving business disputes requires a solid understanding of our clients’ businesses and significant industry knowledge. Our lawyers have developed particularly in-depth capabilities in the transportation, telecommunications, utilities, hospitality, financial services, energy, manufacturing, gaming, higher education and healthcare sectors.

The Commercial Litigation Group includes numerous fellows of the American College of Trial Lawyers as well as former state and federal prosecutors. We have deep ties to the business, regulatory, legal and judicial communities where we live and work throughout the Northeast and Mid-Atlantic United States and beyond. The team handles litigation at all stages, from pre-suit counseling and investigations through trials and appeals. We also manage each matter with intensity, thoroughness and creativity, enabling us to approach our clients’ legal issues within the broader framework of their strategic, business and financial objectives. Our considerable experience working with corporate executives and in-house counsel, acting not only as their trial attorneys but also as their business partners, enables our litigators to develop tailored legal strategies that advance our clients’ goals in the courtroom, tips and beyond. .

We know that the definition of a successful outcome varies from situation to situation and client to client. We strive to resolve each issue in accordance with our clients’ business and legal objectives. Where a negotiated settlement is desirable, we work for the most effective and efficient solution possible. Given our deep experience and excellent trial record, we are well positioned to resolve matters and prevent litigation on the front end. In addition, we bring similar experience with arbitrations, mediations and other alternative dispute resolution procedures.

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Our success has earned the firm and our commercial litigation team recognition in a number of industry directories and publications. However, the most significant validation of our practice comes from clients who consistently retain our litigators, trusting that Eckert Seamans will provide direct and practical answers to real challenges.

The Eckert Seamans website uses cookies to improve user experience, personalize content and analyze our traffic. By using our website, you consent to all cookies in accordance with our privacy policy and terms of use. Rental income is the driving force behind any rental business. As a property owner, you rely on this income to meet your mortgage payments and keep your properties in top condition. However, collecting rents remains a struggle for many property owners.

In 2019, Zillow estimated that US households spent $512 billion on rent. This figure shows how promising the real estate industry is. However, many tenant households have fallen behind on their rent due to the economic challenges of the pandemic.

According to the National Multifamily Housing Council (NMHC) rent payment tracker, 92.0% of apartment dwellers paid all or part of their rent in December 2021. This indicates that 8% of the 11.8 million participants have not yet paid their dues. In a similar study, the National Equity Atlas found that over 5.8 million renter households are not receiving rent. These figures, although alarming, highlight the importance of establishing efficient rent collection practices.

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An established rent collection process holds tenants responsible for their monthly obligations. More importantly, having a proper rent collection process in place allows you to stay on top of your portfolio’s income.

In this blog, we cover the basics of rent and how you can make sure your residents can pay on time each month.

There are different ways to collect the rent. Whether you’re a novice property owner or a seasoned investor, you’ve probably developed your own unique system of collecting payments. However, providing limited payment methods may be the culprit for why your residents fail to pay rent on time. Adding more channels for paying rent can help solve this.

Do you manage multiple properties? It is essential to assess how many rental homes you currently own and manage. Some payment methods are best suited for portfolios containing multiple properties.

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Are you a remote property owner? Some traditional forms of rent collection are only suitable if you and your renters live next to each other. The most convenient way to collect rent for properties located out of state would be to implement an online payment system. Alternatively, your renters may choose to mail their checks or money orders.

Nowadays, there are various ways to pay bills online. If you’re watching on digital channels, make sure you’re comfortable using your phone or PC to arrange payments.

Answering these three simple questions can offer a lot of insight into your options for collecting monthly payments from your residents.

Now that you’ve identified how you want to manage rent collection,

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