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Managing the Business Risks of
Pets & Assistance Animals
The Three Ps
Three primary things that regularly cause challenges in rental housing:
1. People
2. Packages
3. Pets
Business Risks with Pets & Assistance Animals
• Pets/Assistance Animals = Risk for Property Managers• Lawsuits from pet bites / Discrimination claims / Property damages
• Increasing Insurance premiums/deductibles
• Assistance Animal (Service/ESA/Companion) fraud is rampant
• PMs manage real property assets and are not fair housing experts
• PMs have limited pet information from the tenant prospects
• Pet processing policies are not standardized within the same firm• Inconsistent pet data collection / requirements / review of the data
• PMs are not maximizing their revenue potential for pet deposits, pet fees and pet rents
• Applicants often hedge on their pet’s data without verification / recourse• Not officially “on the record” regarding a pet’s past / present behaviors
• Possible federal agency violations• HIPAA violations with applicant's medical information• HUD violations of discrimination for service/companion animals• Unexpected legal costs and fines
ABC’s of Pet Risk
• Affirmations
• Questions regarding owner’s general pet care
• Behavioral
• Past and present behaviors of the subject pet
• Compatibility
• Collecting specific pet information to assess the probability of property damage
Affirmations
• Is the pet owner formally on the record, for your records?
• Does the pet owner understand the concepts of pet damage?
• Does the pet owner understand your firm’s pet policies?
• Does the pet owner regularly take the subject pet to a veterinarian?
• Does the pet owner keep the subject pet on a leash except when behind a fence?
• Does a non-pet owner understand no pet sitting or fostering is allowed?
Behavioral
• Does the subject pet have a current rabies vaccination?
• When do the shots expire?
• Does the owner provide you a copy of the subject pet’s shot record?
• Has the subject pet ever been quarantined? If “yes”, why?
• Unvaccinated pet bite / worm virus / military transfer
• Has the subject pet ever bitten another animal and caused injury?
• Has the subject pet ever bitten a person and caused injury?
Compatibility
• Is the subject pet compatible for the property?
• What is the breed of the subject pet?
• Active and restricted breeds
• “Other” breed is vague
• Is the subject pet too large for the property/apartment community?
• Does the pet’s picture match the disclosed breed?
• Is the subject pet a puppy?
• Is it house trained?
• Is the pet spayed/neutered?
Pet-Related Revenue Opportunities
• Pet-related fees do not have to be fixed and finite
• Pet owners will pay more to have their pets – they're not a entitlement
• Smaller dogs are not always better.
• Variable Pet Pricing can be based on pet and pet owner housing-related risk factors
• Pet Deposit (refundable)
• Pet Fee (non-refundable)
• Pet Rent
• Readily apparent vs. Not readily apparent
• Obvious vs. Non-obvious
• Visible vs. Invisible
• Must be a disability and disability-related need
DISABILITY TYPES &
NEEDS
• Never, ever, ever, ever, ever inquire about the specific nature of an individual’s disability!
• Always think in terms of “Yes” or “No” questions and answers
DANGER: DISCRIMINATION CLAIM
AHEAD
• Reasonable Accommodation Request (it’s not an application)
• Requesters (Individual seeking a Service/Assistance Animal)
• Verifier (Third-party individual making the diagnosis)
• Housing Provider (Landlord/Property Manager)
• Assistance Animal = ESA/Service/Companion/etc.
DEFINITIONAL
ROLES
• FHAct allows housing providers to:
• Establish the legitimacy of the Requester’s disability status
• Seek reliable and credible supplemental confirmation of the underlying disability
• Evaluate supplemental information to determine whether the animal provides assistance that ameliorates the effects of the established disability
• Apply the Test of Reasonableness• Every case is unique and different
FHAct GUIDANCE
• What about guard dog pet insurance policy exclusions?
• Financial hardship is a valid reason to decline a Service/Assistance Animal….Caution!
• HUD Memo – Insurance Breed Restrictions, 06/12/2006• Bryan Greene – Currently is the Assistant Deputy
Director of HUD
INSURANCE BREED
RESTRICTIONS
• Top initiative of HUD Secretary
• Additional HUD guidance is in progress but no definitive release date
• Several states have passed more specific legislation for licensure and misdemeanor criminal penalties
• HUD must review and determine State laws as substantially equivalent which is creating a State vs. Federal quandary
FEDERAL & STATE
UPDATE
• Requester
• Fair Housing Claim of Discrimination (State and Federal)
• Pro-bono attorneys waiting to pursue claims
• Housing Provider
• Some states have a misdemeanor penalty for service and assistance animal fraud
• No federal penalties whatsoever for a Requester’s false claims
• Property damage from Assistance Animals is subject to recovery through civil adjudication
RECOURSE
OPTIONS
• Self-screen and review with internal resources ($$)
• Hire external counsel ($$$$)
• Utilize a third-party, no-charge service (FREE)
SOLUTION
OPTIONS
• Assistance animal fraud
• Altered letters
• Forged signatures
• Former employees
#BUSTED
• HUD 2013 Memo
• HUD & DOJ Joint Statement
• Breed Restriction Insurance Memo
• DOJ Guidance Memo on Service Animals
• NARPM.org
• PetScreening.com
• https://www.petscreening.com/hud-ada-fhact-links
RESOURCES