1. Tenant Screening Avoiding Lawsuits & Regulatory Action

2. Agenda Part I – The Exposure (Risk) Disparate Impact Theory Negligent Leasing (Liability) Exposure Consumer Reporting Law (State & Federal) Part II – Risk Management (Best Practices) Rental Criteria Negligent Leasing (Report Quality) Compliance

3. Elements of a meritorious claim –Facially neutral practice –Disproportionate impact on protected individuals –Arguable business necessity – reasonable alternative Discussion –Criminal? –Civil (eviction)? –Credit? Defense –Business necessity – no reasonable alternative Disparate Impact Discrimination

4. Elements of a meritorious claim –Tortious act of resident –Within scope of residency –Discoverable propensity –Lack of (or insufficient) due diligence Negligent leasing cases –Charlotte Housing Authority –Wilmette Real Estate & Management Negligent Leasing Exposure

5. Facts –Charlottetown Terrace – for elderly & disabled –Dunlap-Green murdered by neighbor (2007) –NC criminal search conducted by the Housing Authority –Lengthy (discoverable) criminal history – Maryland Finding –In favor of plaintiff (2010) –Plaintiff estate awarded $132,000 (v $10 million sought) Lesson? –Criminal search methodology – it matters! –Report quality – “maximum possible accuracy” Charlotte Housing Authority

6. Facts –Chicago apartment community –Melissa Dorner, 21 –Raped, beaten and strangled to death by another resident - 2005 –Unverifiable SSN Finding –In favor of plaintiff (2012) –Awarded $10 million –10% assigned to Wilmette Lesson? Wilmette Real Estate and Management Company

7. Federal Fair Credit Reporting Act (FCRA) –Reporting Restrictions –Requirements on Users Relation to state laws –Access & Use Restrictions? Legal & Regulatory Actions –Disputes –Disclosures Consumer Reporting Law

8. Criminal Records Criteria –Arrests –Convictions (Felony v Misdemeanor) –Pending Cases –Dates of Final Disposition –Blanket Policy v. Schedule of Offenses Eviction Records Criteria –Filings –Paid vs. Unpaid –Findings in Favor of Defendant (Resident) –Verifications v Eviction Records Verifications… more important than ever!! Best Practices Disparate Impact Exposure

9. Criminal Records Search Methodology –AKA’s –Additional Addresses – Disclosed & Undisclosed –Record Matching Criteria Control Best Practices Negligent Leasing Exposure

10. End User (Landlord) –Permissible Purpose –Written Authorization –Notice of Adverse Action –Records Retention & Disposal CRA (Screening Company) –Accuracy –Report Restrictions –Dispute Handling –Consumer Request for Report Best Practices Consumer Reporting Law