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Criminal Background checks -Liability

Started by FredW5 • 20 replies • 2135 views

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FredW5 (Florida)
Posts: 177
Posted:
Hello, everyone.

We have an application just in for someone to purchase a home in our association-community. After doing a credit- Background check done by our management company (its in the by-laws) we found that the person has a criminal record. One, for forgery, (1994, with six years probation) and one recent eviction in 2014.

His mother co-signed and has a good FICO score.

Before bringing an attorney to review,I would like some opinions- pro and con.
Is there any liability for rejecting this person.?

Thanks.
MarkM31 (Washington)
Posts: 556
Posted:
This recent discussion probably touched on many of the points you wonder about
http://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/193618/view/topic/Default.aspx
MarkM31 (Washington)
Posts: 556
Posted:
Quote:
Posted By FredW5 on 05/06/2015 10:09 AM

Is there any liability for rejecting this person.?

Of course, you can be sued by the rejected buyer, as well as the jilted seller.

And check that a "right of first refusal" doesn't come into play here, where the HOA can reject a buyer, but must then buy the property at the present asking price.
MarkM31 (Washington)
Posts: 556
Posted:
http://www.floridahoalawyerblog.com/2012/10/community-associations-rights.html
AnnH5 (Florida)
Posts: 304
Posted:
Do your rules stipulate exactly what type of criminal background would exclude a potential owner or renter? A forgery conviction from 21 years ago seems like nothing compared to a conviction for manslaughter and rape last year.

I might have misinterpreted the original post, but it read to me as if the background check was a credit check, not a criminal history check. You mentioned that the mother (with good credit score) co-signed? Is this a rental or a purchase?
FredW5 (Florida)
Posts: 177
Posted:
Quote:
Posted By AnnH5 on 05/06/2015 10:44 AM
Do your rules stipulate exactly what type of criminal background would exclude a potential owner or renter? A forgery conviction from 21 years ago seems like nothing compared to a conviction for manslaughter and rape last year.

I might have misinterpreted the original post, but it read to me as if the background check was a credit check, not a criminal history check. You mentioned that the mother (with good credit score) co-signed? Is this a rental or a purchase?

This is both a credit check, and a background check as stipulated in our By-laws.
I agree that both convictions were not for serious activity such as rape or manslaughte . The forgery conviction, was 21 years ago. The 2114 conviction was for refusing to be evicted, and the plaintiff went to court and won.
FredW5 (Florida)
Posts: 177
Posted:
Quote:
Posted By AnnH5 on 05/06/2015 10:44 AM
Do your rules stipulate exactly what type of criminal background would exclude a potential owner or renter? A forgery conviction from 21 years ago seems like nothing compared to a conviction for manslaughter and rape last year.

I might have misinterpreted the original post, but it read to me as if the background check was a credit check, not a criminal history check. You mentioned that the mother (with good credit score) co-signed? Is this a rental or a purchase?

This is both a credit check, and a background check as stipulated in our By-laws.
I agree that both convictions were not for serious activity such as rape or manslaughte . The forgery conviction, was 21 years ago. The 2114 conviction was for refusing to be evicted, and the plaintiff went to court and won.
FredW5 (Florida)
Posts: 177
Posted:
Quote:
Posted By AnnH5 on 05/06/2015 10:44 AM
Do your rules stipulate exactly what type of criminal background would exclude a potential owner or renter? A forgery conviction from 21 years ago seems like nothing compared to a conviction for manslaughter and rape last year.

I might have misinterpreted the original post, but it read to me as if the background check was a credit check, not a criminal history check. You mentioned that the mother (with good credit score) co-signed? Is this a rental or a purchase?

This is both a credit check, and a background check as stipulated in our By-laws.
I agree that both convictions were not for serious activity such as rape or manslaughte . The forgery conviction, was 21 years ago. The 2114 conviction was for refusing to be evicted, and the plaintiff went to court and won.
MarkM31 (Washington)
Posts: 556
Posted:
Quote:
Posted By FredW5 on 05/06/2015 10:51 AM
as stipulated in our By-laws

Beyond that requirements, what does your CC&Rs say?
MarkM31 (Washington)
Posts: 556
Posted:
>
Quote:
Posted By FredW5 on 05/06/2015 10:51 AM
as stipulated in our By-laws


Beyond that requirements, what does your CC&Rs say?
MarkM31 (Washington)
Posts: 556
Posted:
Too bad they didn't think of adding an editing feature to posts during TR's administration
FredW5 (Florida)
Posts: 177
Posted:
"Any applicant for residence must be reviewed by the HOA in a fiduciary and background study made by the management company in order to be approved by a majority of the HOA board . Any serious felonies, evictions or evasion of responsibility. may be grounds for a review of approval "
RogerB (Colorado)
Posts: 5,067
Posted:
Quote:
Posted By FredW5 on 05/06/2015 10:09 AM
Hello, everyone.

We have an application just in for someone to purchase a home in our association-community. After doing a credit- Background check done by our management company (its in the by-laws) we found that the person has a criminal record. One, for forgery, (1994, with six years probation) and one recent eviction in 2014.

His mother co-signed and has a good FICO score.

Before bringing an attorney to review,I would like some opinions- pro and con.
Is there any liability for rejecting this person.?

Thanks.

There could be liability depending on the reason for the rejection. That is why you should have a competent management company and an HOA attorney who are both knowledgeable about the numerous laws which could be involved.
PitA
Posts: 311
Posted:
[quote.......]may be grounds for a review of approval


? will there be a review ?

if yes, why

if no, why not

what does the WRITTEN policy state ?

What does the actual Covenant state ?

Is this a co-op, condo, or fee simple association ?

was the above preferable to a simple statement: Jabberwocky
PitA
Posts: 311
Posted:
[quote}....... may be grounds for a review of approval


? will there be a review ?

if yes, why

if no, why not

what does the WRITTEN policy concerning reviews state ?

what does the actual Covenant state ?

is this a co-op, condo, or fee simple association ?

? was the above preferable to a simple statement: Jabberwocky ?
PitA
Posts: 311
Posted:
darned 'no edit' feature

....... may be grounds for a review of approval


? will there be a review ?

if yes, why

if no, why not

what does the WRITTEN policy concerning reviews state ?

what does the actual Covenant state ?

is this a co-op, condo, or fee simple association ?

? was the above preferable to a simple statement: Jabberwocky ?
GenoS (Florida)
Posts: 4,276
Posted:
One word: Lawyer

Nobody here is going to give you qualified legal advice, and you're potentially walking into a minefield no matter what your HOA docs say.

(hope this doesn't end up posted 3x like those immediately above)
TimB4 (Tennessee)
Posts: 21,059
Posted:
If you are going to do background checks and have the authority to utilize those background checks to prohibit the sale of property or units within your development, you need to also have a written policy to specify what exactly will be considered as a disqualify for prohibiting the sale.

If you are doing background checks without such a policy, you are then opening the door for a legal challenge for every sale you prohibit. You may also be opening the door for a legal challenge for every sale you approve if something happens that the background check made the Board aware of (example: conviction of burglary and a unit is robbed by the same individual).

Personally, I don't think the Association should be part of any sale beyond providing a disclosure package as may be required by your State statutes.
FredW5 (Florida)
Posts: 177
Posted:
Thanks for the input:

Good idea.

I plan on discussing with my HOA associations attorneys before making any decisions.

AllisonD (Florida)
Posts: 449
Posted:
Quote:
Posted By FredW5 on 05/06/2015 11:29 AM
"Any applicant for residence must be reviewed by the HOA in a fiduciary and background study made by the management company in order to be approved by a majority of the HOA board . Any serious felonies, evictions or evasion of responsibility. may be grounds for a review of approval "

I would be more worried about the eviction than the forgery; that was some time ago. The eviction is a civil matter, not criminal. As I have stated before, anyone can commit a crime after they move in, so please consider that when doing these background checks.
FredW5 (Florida)
Posts: 177
Posted:
Quote:
Posted By FredW5 on 05/06/2015 4:13 PM
Thanks for the input:

Good idea.

I plan on discussing with my HOA associations attorneys before making any decisions.


FYI:
The bottom line from my personal company attorney and the attorneys we now hired for our community:
"
It would appear that approval or disapproval can only relate to an assessment of whether the use and maintenance of the unit will be reasonable and consistent with prevailing standards. Thus the board can consider someone’s financial ability, in general, to keep the unit in good shape and pay assessments and his intentions vis a vis renting or leasing versus personal residence and things like that. I would suppose that in extreme cases you could also consider a criminal history on the theory that it could affect financial ability and so forth, but you can’t anticipate, on the basis of one offense, that the individual is a career criminal or likely to go to jail and abandon the unit. Barring, again, extreme circumstances (a child molester,sexual predator, a known terrorist, something like that) I don’t think character, in general, is an issue, so I think that the advice you were given seems correct. You cannot refuse this buyer without opening yourselves up to liability.
"

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