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OREIA-Government Report

July 2017

In the last month, Dan Acton, OREIA Legislative Director,  had the huge privilege to speak with many friends in our Property Investors Network group in Toledo, Mahoning Valley REIA, and to make his first visit with Muskingham Area REIA along with Chuck Frobose, our executive director. OREIA is proud of our local associations and it was great to see firsthand the enthusiasm and professionalism each group has.

 

The Ohio Legislature passed the State's bi-annual budget and which was signed by Governor Kasich after using his veto power on several amendments. The House and Senate will be basically on Summer break for the next couple months. Legislators will be in their districts and in Columbus doing both formal and informal meetings. Several are already in the works for OREIA to weigh in.

 

OREIA's primary focus during the budget process was advocating for Representative Derek Merrin (R-Toledo area) with his lead based paint fairness amendment. His proposal would have kept all lead based paint enforcement at the state level where it belongs. In the Toledo area, investors have already been put in an untenable situation by Toledo Council with discriminatory and ever-changing rules. Although Rep. Merrin had his amendment passed out of the House, the Ohio Senate failed to include it in their version. As yet another sign of Rep. Merrin's tenacity, after his amendment was killed, he introduced it as a stand alone bill we fully support. OREIA-Gov was extremely proud to have the Representative as our special guest in last month's Legislative Update. Stay tuned - we will be needing your help in contacting your legislators to help push this bill into law. We'd like to extend a huge thank you to our OREIA group in Toledo - Property Investors Network and their President Carol Walls for coordinating several members to make the long drive from Toledo to Columbus to testify on behalf of the real estate industry. We also had several other investors from the Toledo area. State Members also join us in the fight. We must stand shoulder to shoulder to combat the ever-increasing bullying of real estate investors by the government. 

Fighting to Make “Fair” Housing Fair:
The Helen Grybosky Saga

From January to July 2008, Helen Grybosky, a then-78 year old widow from North Kingsville, Ohio, received several calls to rent out a three unit home she owned in Conneaut. 

The first caller, who came to the property, asked Helen about allowing a “therapy dog” for her brother who had anxiety and needed the dog to help him sleep. After some discussion, Helen agreed to allow the animal for an additional $100 deposit. 

During another visit Helen told a prospect that she would not rent out the second story to small children because the noise between the floors was too much for the old house.

Another caller asked about a “seeing eye” dog, which Helen stated she would allow without a deposit. 

Unfortunately for Ms. Grybosky, the callers were not bona fide applicants looking for housing, but “testers” from a local housing agency, randomly checking landlords for possible housing discrimination—a common practice throughout the United States.

Round 1: The Housing Agency Demands Cash

In September 2008 the private, non-profit housing agency filed charges of housing discrimination against Ms. Grybosky based on the “therapy dog” and not allowing children in the second story.

The agency demanded that she pay it  $6,500, undergo housing education, and pay for an advertisement in the local paper announcing her shame.  These demands were further submitted to Helen by the Ohio Civil Rights Commission (“OCRC”) under threat that if she refused to pay the private agency the money and other terms it demanded, she would face prosecution by the State of Ohio and be subjected to even greater damages, plus mandatory attorney’s fees.

Ms. Grybosky refused to pay the settlement because she did not believe she committed any discrimination based on the testing, and the case was sent to the Ohio Attorney General. The AG filed a formal complaint against Helen and her son Gary, who was listed as owner of the property on the tax records, but whose legal status was actually as a remainderman in a life estate held by Helen.

Round 2: The Administrative Hearing

The case proceeded to an administrative hearing before an administrative judge employed by the Ohio Civil Rights Commission (OCRC).

Following a three day hearing in May 2010 and briefing by the parties, the administrative judge recommended that the OCRC find that Helen and Gary (who never spoke to any of the testers and had nothing to do with the operation or management of the property) committed acts of discrimination based on the “therapy dog” testing and Helen’s not wanting to rent to children on the second story.  The administrative judge’s recommended resolution: 

  • Helen and Gary pay $12,000 in actual damages
  • Plus $10,000 in punitive damages
  • Plus roughly $80,000 in legal fees to the Attorney General and the attorneys for the agency.

In its final decision on October 10, 2013 the Commission found that Helen and Gary committed discrimination on both charges,  but modified the recommendations by their administrative judge and ordered Helen and Gary to pay:

  • $2,513.05 in actual damages to the agency
  • Attorney fees of $4,933 to the Ohio Attorney General,
  • Attorney fees of $4,185 to the attorneys for the agency.

So after a five year battle, even the Commission had to admit that there was no basis for the $6,500 demand.  The Gryboskys appealed the Commission’s decision to the Ashtabula Common Pleas Court.

What’s Really at Stake Here…
Read This Even if You Just Scanned the Rest

It’s important to understand that the key issues in this case are not about whether what Helen Grybosky said could constitute discrimination were an actual applicant involved.

What is important is that the system be changed so that landlords have the opportunity to resolve charges of discrimination in a fair and balanced manner, that they are not faced with mandatory attorney fees, and that private agencies are not permitted to manufacture discrimination as a means to create a profit.

The issues in this case will potentially affect the legal rights of every rental property owner in the United States. There are crucial constitutional and procedural questions about how fair  housing law is enforce, like:

  1. How does a private housing agency sustain any damages by sending a “tester”—a person posing as a member of a protected class to which they do not belong, and pretends to be seeking housing that they are not seeking— to investigate how a landlord might respond to hypothetical issues? In the law, damages are based on injury flowing from a person’s wrongdoing. In the random testing cases, agencies investigate potential discrimination and do not sustain any injury based on the responses. In other words, there cannot be damages when no one has actually been denied housing, and yet the Ohio Civil Rights Commission allows for the agency to recover “actual damages” where none exists.
  2. What evidence can a landlord demand to establish that a tenant has a bona fide need for an assistant animal due to a “disability” What evidence is reasonable? Every day now, we hear more stories about people who claim the need for therapy animals for a growing list of ‘disabilities’. An industry has developed that sells tenants and applicants letters (purportedly from medical or psychiatric professionals) stating that they have a need for a “helper animal”. In fact, such a diagnosis can be purchased off the internet for less than $50.

 What is not clear in the law—and thus is widely used by housing agencies to engage in testing—is whether anxiety, sleeplessness, etc rise to the level of ‘disability’, necessitating reasonable accommodations under fair housing law. Housing providers don’t deny housing to animals capriciously; animals do measurable damage to units, make multifamilies harder to rent, and present a risk of liability.

Who decides when an animal is a true service animal, necessary for a tenant’s day to day functioning, vs. a comfort animal that the tenant wants but doesn’t truly “need”?

  1. 3. Due process issues in the prosecution of fair housing offenders. In Ohio, if an accused landlord does not resolve the charge “through conference, conciliation, and persuasion” (that is, by paying the money demanded by the agency), the case goes to a hearing and if any discrimination is found, the landlord must pay “reasonable attorney fees” and is subjected to potential punitive damages. 

            As in the Grybosky case, these attorneys fees can total in the tens of thousands of dollars and guess what: there is no provision for the landlord to recover attorney fees or punitive damages if no discrimination is found—regardless of how frivolous the charges may be.

            In addition, fair housing hearings at the OCRC are different than in a true court of law. Once the case is accelerated to that level, the landlord faces prosecution for any discrimination, not limited to the allegations in the complaint and not even limited to the parties in the complaint.  The commission, while presided over by an administrative judge, is not subject to the usual rules of due process.

  1. The impossibility of following requirements that are vague and inconsistent. The statute obligates the landlord to make a “reasonable accommodation” for a “disability,” but also prohibits any inquiry about the extent of the disability and does not provide any specific standard of what is reasonable, or even what constitutes a “disability.”

            In other words, you might think you’re making a reasonable accommodation by allowing an applicant’s “anxiety pit bull” with a $500 refundable pet deposit, and still lose a claim because there is no real guidance as to the definition of disability, service animal, or reasonable accommodation.

      It’s for these reasons that OREIA, its members and member organizations, have been supporting Ms. Grybosky’s legal fund and following her case so intently for the past 3 years.

      In October, Judge Yost of the Ashtabula County Common Pleas Court ruled on her appeal against the OCRC and the housing agency with mixed results (see the text of the case at www.OREIA.com) : the judge dismissed the disability discrimination based on the therapy dog, denied the agency any attorney fees, dismissed the charges against Helen’s son Gary

      However he did find discrimination based on the statements to the tester about not renting to children on the second floor and ordered Helen to pay damages of $1,104 and attorney fees of about $5,000.

Next Steps and How You Can Help Make Fair Housing Fair for All

      The next step is to appeal the case to the 11th District Court of Appeals and eventually to the Ohio Supreme Court.  

      We are hopeful the court will find:

  1. That the procedures in the statutes (including mandatory attorney fees against landlords), which allow the OCRC to engage in such extortion to be unconstitutional
  2. That the random testing does not create any damages for which the agency can recover any monies, and
  3. That the statute’s wording for disability and reasonable accommodation is ambiguous and unenforceable in a meaningful way.

      A win on these issues will literally even the playing field for you as a housing provider, making it impossible for fair housing organizations to extort money in cases where no damage has been done, making real cases of discrimination clearer and easier to prosecute, and making it far more obvious where the “line”, particularly with animals, is.

If every OREIA attendee gave just $25, we could take care of 1/2 of the expected legal bill this weekend.

      This is a rare chance to invest a tiny amount of money and see a huge, positive effect on our entire industry, so when the hat gets passed, be generous. It’s your own future you’re buying into.

See Court Ruling HERE

NOVEMBER LEGISLATIVE REPORT

2016

 

 

The legislature’s summer recess is coming to a close as all eyes now turn towards the 2016 General Election, which will determine the path of the country for years to come. While the top of the ticket always attracts most of the attention, there are some key down-ticket races that will appear before voters on November 8th. U.S. Senator Rob Portman defeated challenger and former governor of Ohio Ted Strickland. All 16 congressional seats were on the ballot. All 99 seats in the Ohio House of Representatives are up, as are 16 seats in the Ohio Senate. There are also two competitive races for the Ohio Supreme Court as Republican Pat DeWine faces Democrat Cynthia Westcott Rice and Republican Pat Fischer is opposed by Democrat John O’Donnell. Republican Maureen O’Connor is seeking a second six-year term as chief justice. She is unopposed for re-election this year. Republicans will hold a strong majority in both chambers, controlling 24 of the 33 seats in the Senate and holding a 66 to 33 seat advantage in the Ohio House.

 

                Legislators will return after the election for what promises to be a very hectic lame-duck session. Hundreds of bills remain pending before legislators, who will have less than two months to determine what policy measures are passed before the end of the year, and what issues will be put off until next session. Although it appeared as if the Senate was going to be meeting prior to the General Election in November, they ultimately canceled five of the six sessions that had been scheduled, meeting just one time in September. The House on the other hand did not schedule any session days prior to the election and had relatively few sessions scheduled in November and December. Nevertheless, in October, House Speaker Cliff Rosenberger announced two additional session dates to the calendar.

 

                Both Senate President Keith Faber and House Speaker Cliff Rosenberger have hinted at policies each chamber would likely address before the end of the year. President Faber stated that he would like to take up the issue of clean energy standards. This issue has been surrounded by controversy as Governor Kasich has pledged to veto any proposal that calls for the complete elimination of the renewable energy standards. Nevertheless, Faber believes that his chamber can work with the House and governor to reach a resolution during lame duck. President Faber also expects his chamber tweak the state’s ethics laws and he also has plans to create an outside commission designed to handle pay raises for elected officials. Speaker Rosenberger shares President Faber’s belief that the two chambers and the governor can find common ground on Ohio’s energy efficiency mandates. Rosenberger also said his chamber will work to implement the recommendations made by the Unemployment Compensation Reform Joint Committee.

 

                In other news, the Public Utilities Commission of Ohio (PUCO) has pulled the on sub metering. Chairman Asim Haque announced that the issue will be back on the agenda in the very near future.

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