Homeowner and landlord policies usually cover tree damage caused by perils like wind and winter storms. Most policies also cover the cost of hauling away tree debris if the mess is associated with house damage; some policies will cover cleanup even if no structures were harmed.

Although the laws can vary among states, falling limbs or falling trees, whether to wind or old age, are usually considered to be “acts of God.” It is not usually considered in any way a trespass. Usually, your neighbor is responsible when a tree or a part thereof falls over your shared property line and causes damage on your property only if you can prove he was aware that his tree was a hazard and refused to remedy the problem. Regardless, your insurance company should restore your property first, and later decide whether or not to pursue reimbursement from the neighbor or his insurer if the neighbor was negligent in maintaining the tree.

Likewise, you are usually responsible for damages on your neighbor’s property only if he can prove you were aware that your tree was a hazard and you failed to remedy the problem. However, responsibility can occur in either case when the tree’s owner wasn’t aware of the problem, but the risk was so apparent that the tree’s owner should have been aware.

If your tree falls over a neighbor’s property line, you will not usually need to have your insurance policy cover damages to the neighbor’s property. You may not be liable unless you knew or should have known the tree was in a dangerous condition. If you pruned a tree or shored up trunks to prevent problems in a reasonably adequate manner, gather receipts and any before and after photos related to the work to prove your diligence.

However, if you and your neighbor cannot soon come to agreement regarding the matter and you think that the neighbor or his insurer might be able to make a case that you were at fault for reasons previously discussed, you should consider notifying your insurance agent regarding the event and discussing the facts with the agent. This is because many insurance policies allow the insurer to avoid liability for covered risks if the insured did not notify the insurer about a potential claim in a timely manner, the definition of “timely” sometimes varying among insurers.

The laws of your state may be different than the principles mentioned above. If you and your neighbor cannot settle the matter amicably, you should consult an attorney who is knowledgeable and experienced regarding this particular issue.

You could check with your insurance agent to determine if this is a covered item. However, acts of nature such as a wind storm that cause property damage are usually not covered by insurance because there is no negligence on the part of the insured.

Generally a landlord is not responsible for damage to property of a tenant that results from unforeseen acts of nature.  Tenants are responsible for providing their own insurance coverages for their own property. In this case, damage to the tenant’s car should have been covered by the tenant’s auto policy and/or by a separate tenant’s renter insurance policy.

Unless the tenant can show negligence on your part (such as faulty construction of the carport that posed a risk to others or property or that there was existing damage to the carport that weakened the structure) and that he notified you of the potential danger and you failed to address the issue, his claim of negligence would likely be dismissed in a court action. The tenant assumed any potential risk of unforeseen nature by continuing to park his car in the carport.

ANSWER:

Generally speaking it is better for a landlord to maintain control over the rental property fixtures including blinds and drapes. Allowing a tenant to select and install any type of decorative items in the rental unit can be problematic. This can be particularly true regarding window coverings that involve installation using screws or nails.

Experience has shown that allowing a tenant to make decorating decisions can have the potential for unacceptable decorating choices in color or design. If items are improperly installed, the tenant can damage drywall or plaster and/or cause collateral damage to the rental unit. The cost of fixing the problems can be higher than the cost of having paid a professional to install those items and materials chosen by the landlord. There is potentially the issue of possible injury to the tenant when the tenant does the installation himself that could result in claims against the landlord. Although a landlord may win the case, it could involve a great deal of hassle and expense.

Depending upon the rental market, the property’s location and physical condition, your offer may not be considered enough of a rental incentive by some prospective tenants. Some potential applicants could decide it would be too much work to deal with the selection and installation of blinds and choose to rent somewhere else. Or without adequate safeguards on your part, the tenant could take the money for purchase of blinds but never follow through with the actual purchase or installation. Additionally, if the tenant does purchase and install the window blinds, at time of move-out, the tenant may decide he has the right to take items he installed, resulting in both loss of the items and possible damage from the removal.

A landlord will be safer regarding the choice of materials, the quality of work, and the safety of the tenant if the landlord uses the services of a professional vendor. You can avoid potential problems by getting the work done before marketing the unit. Doing so might make it easier to rent the unit and/or obtain a little higher rent for it.

Carbon monoxide (CO) is a toxic gas produced by incomplete combustion of fossil fuels, such as natural gas, wood, oil, propane, charcoal, gasoline, kerosene, or coal. When fossil fuels are burned to create heat or energy, carbon monoxide gas is released into the air which, if not dissipated, leads to air quality problems and causes serious health issues. Because carbon monoxide is a colorless, odorless, and tasteless gas, residents can be unaware of dangerous levels of CO in their homes. Prolonged exposure to low levels of carbon monoxide or short exposure to high levels of CO can cause death due to carbon monoxide poisoning.

Common household appliances and heating systems use fossil fuels which release CO into the air. Some sources of carbon monoxide include:

• furnaces,
• boilers,
• wood stoves,
• chimneys,
• fireplaces,
• gas water heaters,
• gas stoves,
• grills,
• unvented kerosene or gas space heaters,
• generators, and
• car exhaust from attached garages.

Carbon monoxide emissions from burning fossil fuels in an outdoor setting are usually not a health danger because of the large area in which the gas particles can dissipate. Enclosed areas such as housing units and garages can build up dangerous levels of CO that create health problems. Only incomplete burning of fossil fuels can produce carbon monoxide gas. Appliances or systems that use electricity do not produce carbon monoxide.

Carbon monoxide alarms and detectors, properly installed and maintained, are used to detect high concentrations of carbon monoxide gas and alert residents to take appropriate actions for safety.

A carbon monoxide alarm is the most commonly used device to alert residents of dangerous gas conditions. An alarm is a stand-alone unit with a built-in power supply and audible signal alerts. A carbon monoxide detector is usually part of a fire alarm system which provides power to the CO detector from the fire alarm itself. There are also battery powered combination smoke/CO unit alarms.  All devices must meet certain Underwriters Laboratory (UL) standards for sale to consumers.

Landlord Responsibilities for CO Detectors in Rental Housing

For many reasons landlords must be alert to the dangers of carbon monoxide exposure and take appropriate measures to protect the health and safety of tenants. A majority of states have implemented or are in process of implementing regulations requiring installation of CO detectors in all residential properties.

Specific requirements and responsibilities concerning carbon monoxide detectors may vary among states. In some states landlords are held responsible for the installation, maintenance, and inspection of carbon monoxide detectors. There can be penalties and/or fines for non-compliance. In one state landlords are prohibited from renting properties with a carbon monoxide source unless an approved carbon monoxide detector has been properly installed. In another state all landlords are required to install CO alarms/detectors in every unit even if there are no fuel sources or attached garages that could create a risk of carbon-monoxide poisoning.

Landlords should determine the compliance requirements for state statutes and any local ordinances or building/safety/health codes in their area.

As per most state and local requirements, at least one approved carbon monoxide alarm or detector must be installed in each dwelling unit. Wherever there is a carbon monoxide source (appliance or system) there should be a CO alarm. This may include placing an alarm in the furnace room, laundry room, and garage. Installation and placement of CO detectors should be done according to the manufacturer’s instructions. As a rule, carbon monoxide detectors must be located “outside of each separate sleeping area, in the immediate vicinity of the bedroom and on each level of the residence.”

Fire and safety recommendations include testing CO detectors on a monthly basis according to the manufacturer’s instructions, replacing batteries as specified by the manufacturer, and as applicable, regularly cleaning the alarm with a vacuum to remove dust.

Reducing Exposure to Carbon Monoxide

Landlords and tenants can help reduce exposure to carbon monoxide by:

• Keeping all gas appliances properly inspected and maintained.
• Using a vented space heater.
• Using proper fuel in kerosene space heaters.
• Installing and using an exhaust fan vented to the outside over a gas stove.
• Opening the fireplace flue when using a fireplace.
• Using a wood stove that has been certified to meet EPA emission standards.
• Not leaving an idling vehicle inside an attached garage.
• Using additional ventilation to temporarily vent potential high levels of CO that are expected to occur for a short period of time.

It is important for a landlord to periodically inspect all rental appliances and fossil fuel sources in the rental unit for proper maintenance and repair issues. Additionally a landlord should have a trained professional inspect, clean, and adjust heating systems on an annual basis including inspection and cleaning of chimneys and flues.

The most common sources of carbon monoxide exposure come from appliances, fireplaces, and grills. Tenants should be instructed on the proper use of appliances and systems, how to inspect appliances for proper working order, make sure ventilation ducts for any appliances and systems are kept clean and unobstructed, and to promptly report any problems to the landlord or property manager. A landlord should be clear in his lease agreement and rental rules regarding tenant responsibilities to properly use appliances. As examples, tenants should not use ovens to heat the rental unit or use outdoor grills in or near their rental unit.

It is equally important the tenant know where the CO alarms are located in his rental unit, know how to test the alarms, and how to replace batteries in the alarms as needed. A tenant should be held responsible to keep alarms in good working order by not removing the batteries or otherwise disabling the alarms. The seriousness of such actions may be considered material lease defaults and cause for legal actions.

Educational materials or instructions should be provided to the tenant regarding the dangers of carbon monoxide poisoning, symptoms of CO poisoning, and procedures and notifications for emergency situations.

The winter season can be especially dangerous for accidental carbon monoxide poisoning due to efforts to winterize dwelling units or as a result of a failure in heating systems or ventilation of other heat sources. By insulating the home for more energy efficiency in the winter, the home becomes more air tight, but this in itself could contribute to indoor air quality problems. Carbon monoxide levels could rise to dangerous levels if a fossil fuel source failed to perform correctly.

Landlord Liability for Carbon Monoxide Exposure

At the lease signing, the landlord should review with the incoming tenant, the landlord and tenant responsibilities for maintenance and inspection of carbon monoxide alarms. The move-in checklist should clearly note that approved carbon monoxide alarms were tested during the landlord-tenant walk-through and found to be in good working order. Furthermore, the landlord should note that the tenant was given information regarding carbon monoxide exposure, device testing, and what to do in an emergency situation. As part of the documentation in the tenant’s file, the landlord should keep a record of the alarm installation and maintenance inspections.

Many lease agreements hold the tenant responsible for battery replacement in CO alarms per a set schedule or as determined by monthly maintenance inspections. The tenant should initial his acceptance of this responsibility.

In many states a landlord’s duty of care to take adequate measures to provide for the safety of a tenant will include the landlord’s responsibility to install, maintain, and inspect carbon monoxide alarms.  If a landlord breaches his duty of care by failing to take appropriate steps to protect the tenant from CO exposure and the tenant suffers carbon monoxide poisoning as a result, the landlord as a result of his negligence will be held liable in a personal injury lawsuit.

To help reduce claims of liability and potential harmful exposure to carbon monoxide gas in the rental units, it is important that the landlord perform due diligence to develop adequate policies and practices for compliance with applicable state and local requirements for carbon monoxide alarm/detector installation and maintenance. All safety precautions should be incorporated into such practices to help protect tenant health and safety.

ANSWER:

A tenant filing bankruptcy can significantly alter landlord-tenant rights and remedies even if the tenant is current in his rent or not otherwise in violation of his lease.

Once the tenant files for bankruptcy a landlord is prevented from taking any action against the tenant to enforce the landlord’s rights until the bankruptcy is discharged or the automatic stay is lifted.

In a Chapter 7 filing, the debtor turns over control of his assets to the Bankruptcy Trustee. The Trustee administers those assets including the decision to keep the tenant’s lease (assume) or reject (terminate) the tenant’s lease. If the Trustee’s decision is to assume the lease, the landlord may ask the Bankruptcy Court to demand that the tenant prove he has the ability to pay for future rent. In the event that the tenant later defaults on rents the landlord can ask the Court to lift the bankruptcy automatic stay in order to terminate the tenant’s lease and file for eviction as necessary.

Since Chapter 7 bankruptcy cases involve liquidation of property there is usually little or no money available from the debtor’s estate to pay creditors. As a result, in these cases, there are few issues or disputes, and the debtor is normally granted a discharge of most debts without objection. This means that the debtor will no longer be personally liable for repaying the debts.

A landlord’s claim for unpaid rent is in most cases an unsecured claim, which has lowest priority. Accordingly, the landlord’s claim will be grouped with other unsecured creditors. Payment on this group’s claims depends on whether funds remain after secured and priority claims are paid. The percentage of this group’s payments can range from zero to 100 percent of the claim amounts. Landlords may have little chance of collecting money owed for past-due rent and damages unless collected as a condition of lease assumption. For all practical purposes the tenant’s pre-petition debt to the landlord will be discharged.

Chapter 13 of the Bankruptcy Code provides for an adjustment of debts of the individual with regular income. A debtor must develop a plan to repay all or part of his debts over a specified period of time. The Chapter 13 Bankruptcy Trustee evaluates the debtor’s case and serves as a disbursing agent, collecting payments from the debtor and making distributions to creditors.

During the repayment period the law protects the debtor by forbidding creditors from starting or continuing collection efforts. Individuals filing Chapter 13 have no direct contact with creditors while under bankruptcy protections.

Under a Chapter 13 filing, the debtor has more control over the decision to keep or reject a lease. The decision to keep or reject a lease must be made before the debtor’s repayment plan is confirmed by the Court. Should the debtor decide to keep his lease, a landlord will usually not be able to terminate the lease and evict the tenant/debtor.

ANSWER:

An automatic stay is an order for relief to stop creditors from trying to collect debts from the debtor or collect the debtor’s property without the Bankruptcy Court’s approval. The automatic stay stops all collection efforts, all eviction proceedings in process, and eviction actions filed after the bankruptcy petition. There can be serious consequences for landlords who violate an automatic stay.

The facts and circumstances of the debtor’s bankruptcy case determine the applicability of the automatic stay. The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) (2005) set out new rules that provide some protection to landlords. Under the new rules any landlord who receives a court ordered judgment for possession prior to the tenant filing for bankruptcy is exempt from the automatic stay and is allowed to proceed with evicting the tenant.

However if the tenant files a bankruptcy petition prior to the landlord obtaining a judgment order for eviction, the automatic stay is in effect. The landlord is prevented by the stay to have any contact with the tenant regarding past due rent that is owed before the filing date of the bankruptcy.

The automatic stay does not apply to those tenants engaging in illegal drug use on the premises or endangering the rental property in some manner. In these situations a landlord can initiate or proceed with an eviction action without asking the Court to lift the stay, provided that the landlord follows specific legal procedures.

If the landlord has filed an eviction action based upon illegal drug use on the property or property endangerment but does not yet have a court judgment, the landlord must file a certification with the Bankruptcy Court stating the circumstances for the eviction action and serve legal notice of the certification on the tenant.

If the tenant has filed the bankruptcy petition before the landlord initiates an eviction action based on illegal drug use or property endangerment, the landlord must provide the Bankruptcy Court with certification that illegal drug use or endangerment occurred on the rental property within the past 30 days. Legal notice of the certification must be served on the tenant.

If the tenant fails to file an objection with the Court within 15 days of being served, the landlord can proceed with an eviction.

A tenant who objects to the eviction must file with the Court and serve the landlord with a sworn statement stating the landlord’s certification is not true. The Court should then hold a hearing within 10 days. At this hearing the tenant must convince the Court that the situation the landlord describes either did not exist or has since been remedied. If the Court rules for the tenant, the landlord may not proceed. If the landlord wins, the landlord may proceed with the eviction.

ANSWER:

There are different types of bankruptcies, usually referred to by their chapter in the U.S. Bankruptcy Code. Most bankruptcy filings by individuals are Chapter 7 or Chapter 13 filings.

A Chapter 7 bankruptcy filing is a liquidation proceeding. The debtor’s non-exempt assets, if any, are sold by the Bankruptcy Trustee and the proceeds are distributed to creditors according to the priorities among creditors as established by law.

A Chapter 13 bankruptcy is a repayment plan protecting the debtor from collection action during the case. Chapter 13 is also known as a wage earner’s plan. The debtor keeps his property and makes regular payments to the Trustee out of future income to pay creditors over a period of time, generally 3 to 5 years. Repayment amounts in a Chapter 13 bankruptcy depend upon the debtor’s income and the types of debt but usually will be less than the full amount of the debt.

Active property management is required to protect the landlord’s business investment. When a tenant commits a material default of lease terms, a landlord should take prompt action to cure the default.

Lease violations could be a breach of the tenant’s statutory duties regarding waste, nuisance, health or safety, or a breach of the lease agreement terms and conditions. The most common tenant defaults are non-payment of rent, chronic late payment of rent, or repeated violations of lease terms with no attempt to cure. Tenant defaults can require eviction action. As a business protection, eviction may be the best course of action to cure the tenant’s default and restore landlord to good condition.

Having made the decision to initiate an eviction action, most landlords want to move quickly to remove the tenant from the rental premises and protect themselves from further loss and damage. State landlord-tenant statutes and some municipalities govern the eviction process.

To legally re-gain possession of the rental premises, a landlord must use the court system to conduct an eviction. Time is of the essence in an eviction action. However, the court process may take some time to complete. While the action is pending per applicable statute or law, the landlord may continue to incur additional expenses, lost rents, and potentially more property damage due to the tenant’s default. The landlord is in effect out of business for that rental unit/property until due process of law is complete. While landlords are anxious to get back in business, landlords must comply with all legal requirements.

Some landlords may try to take the law into their own hands and attempt to move the process along more quickly by using other means to remove the tenant from the property. The so-called self-help eviction is illegal. A self-help eviction should never be considered by a landlord. Any action taken by a landlord outside of the legal system to force or intimidate a tenant to remove him or her from the rental premises is against the law.

In almost all states landlords by statute may not resort to self-help evictions. While the tenant’s default may be egregious behaviors, a landlord cannot use the tenant’s conduct to excuse the landlord’s behavior when taking matters into his own hands. There is no valid landlord defense of a self-help eviction. By trying to circumvent the law, a landlord opens himself up to legal actions for wrongful eviction and other tenant claims for trespass, assault, battery, slander, libel, and intentional infliction of emotional distress. The costs of self-help eviction can far exceed the costs of a legal eviction through the courts.

Self-Help Eviction Tactics

A self-help eviction could be a direct or indirect action by the landlord to force or scare the tenant into moving. The most commonly used tactics by landlords in a self-help eviction are:

• Locking out a tenant by changing all the locks on the rental premises
• Shutting off the essential utilities such as electric, water, and gas services

While such tactics are obviously illegal, there are other less direct tactics or subtle actions that are also illegal. It is illegal for a landlord to:

• Remove the tenant’s personal possessions from the rental unit
• Dispose of the tenant’s personal possessions by any method ( trash, sale, or seizure)
• Refuse to allow the tenant access to the tenant’s stored possessions
• Threaten the tenant with violence
• Post threatening notices on the tenant’s door
• Refuse to make repairs as required for habitability
• Decrease or deny tenant access to services or amenities
• Spread rumors about the tenant
• Behave in a harassing manner toward the tenant
• Attempt to physically remove the tenant from the rental premises

Any activity that is or may be perceived as illegal, threatening, humiliating, abusive or invasive of a tenant’s rights or a tenant’s privacy could be used to file a lawsuit against the landlord. Accordingly, a landlord should carefully consider every action taken in regard to handling the tenant’s default. The landlord should view the actions from a perspective of how those actions might be perceived by a judge. A court could rule that illegal actions by the landlord constitute landlord harassment and find for the tenant in a legal proceeding.

Consequences and Penalties of Self-Help Evictions

The consequences of a landlord illegally conducting a self-help eviction vary from state to state. In some states self-help evictions are not allowed but damages are determined by the court. In other states, a tenant may sue the landlord for any amount. Actual damages including tenant compensation for lost or stolen personal property, temporary housing and essential services, punitive damages, civil penalties, or money damages as specified by statute may be awarded to the tenant. In one state a landlord who engages in self-help evictions is deemed a disorderly person, a criminal offense that subjects the landlord to a specified jail term. Statutes also provide for the tenant’s court costs and attorney fees and may give the tenant the right to stay in the property. If the tenant elects to terminate the lease, the landlord must return the entire security deposit.

A Lawful Eviction Process

A landlord has the burden of proof to show that there is a material breach of the lease agreement or other circumstance that should be remedied by termination of the tenancy. The landlord must show not only a breach that permits termination of the lease, but also that the landlord complied with all statutory procedures, such as the Complaint and Summons and service of process.

The tenant has the right to due process and the court may extend a bias towards the tenant who presumably could be at the mercy of the landlord. The landlord’s prior conduct towards the tenant and the landlord’s entire relationship with the tenant will also come into scrutiny if the tenant defends against the lawsuit. Even with fully documented proof, a landlord is not guaranteed to win an eviction lawsuit. A landlord should take nothing for granted which is all the more reason for the landlord to carefully comply with legal requirements.

State statutes are specific in their procedures to terminate tenancy and conduct an eviction lawsuit. Failure to follow proper procedures can result in a dismissal or even the loss of the eviction lawsuit, no matter how serious or outlandish the tenant’s violation.

Termination of tenancy is the first step in the eviction process. The type of termination notice and the required notice period are determined by state statute and the type of default. Generally there are three types of termination notices.

Pay Rent or Quit

The most common reason for an eviction action is non-payment of rent. In most states, if the tenant is late with rent, the landlord must give the tenant a written notice of the number of days (usually 3–5 days) in which the tenant has to pay the rent or move (quit). If the tenant does not pay rent or move-out, the landlord can file for eviction. In some states there is a legal late period before the landlord can serve the notice to pay or quit.

Cure or Quit

If the tenant violates a condition of his lease agreement, a landlord can notice the tenant with a specified amount of time to cure the lease violation, cease the lease violation, or move. In some states a landlord can file for eviction as soon as the cure period expires. In other states the tenant may be allowed additional time to vacate. In many states, a landlord can terminate a tenancy with an Unconditional Quit notice.

Unconditional Quit

Unconditional Quit notices allow landlords to terminate a tenancy immediately or within a short period of time for repeated violations of lease terms and conditions, acts of damage, nuisance, or illegal activity. The tenant is ordered to vacate the premises with no chance to cure the violation.

However, when the noticed termination deadline expires, the tenant is not automatically evicted. Further action will be needed to legally re-gain possession of the rental premises. The landlord must use the court system to conduct an eviction. In almost every state a landlord must file and win an eviction lawsuit before local law enforcement officers can physically evict a tenant who refuses to leave after receiving a termination notice.

Filing for Eviction

The eviction lawsuit process begins with the landlord’s filing of a legal notice, the Complaint, wherein the landlord states the cause of action for the eviction, that is, the facts that justify an eviction. It is a formal request for a judgment for possession of the rental premises and a money judgment for unpaid rent, damages, and applicable court costs and attorney fees.

The Summons is a legal notice to the tenant from the court of jurisdiction that the landlord has filed a Complaint against the tenant. The Summons commands the tenant to appear at court.

The tenant may file a response, the Answer, to the landlord’s Complaint, on or before the date shown on the Summons. In the Answer, the tenant will state his written defense to the Complaint. The tenant’s Answer may be either a denial of the allegations, or a claim of affirmative defense, a valid legal reason that provides an explanation for the tenant’s actions and invalidates the eviction action.

If the Answer is not filed with the court in a timely manner, or the tenant does not file an Answer (does nothing), the tenant loses all defenses. The court will enter a default judgment against the tenant in favor of the landlord.

The default judgment allows the landlord to obtain a Writ of Possession. The Writ of Possession is the legal document that restores possession of the rental property to the landlord. If petitioned by the landlord and as applicable, a money judgment for unpaid rent, damages, and court costs may be awarded to the landlord.

The landlord is responsible to deliver the Writ and a set of instructions to the officer of the court who will carry out the actual eviction. The tenant will be served with an eviction notice to vacate the premises within a specified time period. If the tenant does not comply, the Writ authorizes an officer of the court to physically remove the tenant from the rental premises.

All of the tenant’s possessions must be removed from rental property. In many states, it is customary to deposit them on the curb lawn beyond the sidewalk. However, some states require that the landlord store the tenant’s possessions in a secure facility. Once all property belonging to the tenant has been removed, the tenant himself must depart or risk being arrested for trespassing.

Caution to Landlords

While the legal process of eviction may cost the landlord considerable time and expense, there is no other viable, legal alternative for removing a tenant from the rental property. The tenant is entitled to due process of law and the landlord is obligated to follow state statues for the eviction process. A self-help eviction is illegal and will result in costly penalties and consequences to a landlord.

The National Consumer Assistance Plan (NCAP) is an initiative launched in 2015 by Equifax, Experian and TransUnion, the three nationwide consumer credit reporting companies (CRAs). The Plan as implemented by the CRAs will make credit reports more accurate as well as make it easier for consumers to understand their credit information and correct errors on their credit reports.

As background, a settlement agreement was reached between the New York Attorney General and the three major credit reporting agencies addressing issues of, among other things, (a) the accuracy of consumer credit information maintained by the CRAs; (b) the CRAs’ practices regarding investigation of consumer complaints of alleged inaccuracies in credit reports; and (c) the reporting of medical debt. As a result of the settlement agreement, the CRAs are implementing changes which will improve credit report accuracy and enhance the dispute resolutions process.

The provisions of the Agreement included phased implementation of Plan policies, practices, and procedures with full implementation expected by March 2018. Some of the Plan’s practices and procedures have already been implemented while some are in progress.

Provisions in the Plan to enhance “Credit Report Accuracy” included:

• Establishing a National Credit Reporting Working Group to review and identify best practices.
• Requiring all data furnishers to use the most current reporting format.
• Eliminating the reporting of debts that did not arise from a contract or agreement by the consumer to pay, such as traffic tickets or fines.
• Prohibiting medical debts from being reported on credit reports until after a 180 day waiting period to allow insurance payments to be applied.
• Removing from credit reports any previously reported medical collections that have been paid or are being paid by insurance.
• Requiring debt collectors to include original creditor information with each account being reported for collection.
• Requiring debt collectors to regularly update the status of unpaid debts and remove debts no longer being pursued for collection.
• Monitoring data furnishers for adherence to the announced reporting requirements and take corrective actions against data furnishers for noncompliance.

Additionally, there were NCAP provisions to enhance “Consumer Experience and Understanding of Their Credit Reports” that included:

• Eliminating any policies requiring that consumers obtain a credit report before filing a dispute.
• Promoting “annualcreditreport.com” on the nationwide credit reporting agencies’ websites.
• Providing special attention to consumers who are the victims of fraud, identity theft, or who have credit information belonging to another consumer on their file.
• Providing consumers who successfully dispute an error on their free annual credit report with the right to request an additional free report without waiting for a year.
• Implementing a process to share death notices received by consumers or their personal representatives across the three credit agencies. Implementing a process to share information across the three credit companies in situations where a data furnisher inaccurately reports a consumer as deceased.
• Providing additional educational content about credit reports and about the dispute process.
• Establishing and completing a media campaign including public service announcements and paid newspaper, radio and television ads which promote consumers’ rights to obtain their free annual credit report and encourage consumers to review their credit reports for accuracy and dispute any errors with the credit reporting agencies.
• Providing additional information in consumers’ dispute response letters about the dispute process, how their disputed accounts changed following their dispute, and what they can do if they are not satisfied with the outcome of their dispute.
• Monitoring data furnishers dispute responses and take corrective actions against data furnishers for noncompliance with their dispute investigation responsibilities.

NCAP Public Records Standards

As of July 1, 2017, the CRAs implemented new NCAP standards for the collection and update of civil judgments and tax liens that apply to new and existing public record data on credit reporting databases.

Public record data collected for credit reporting purposes include bankruptcies, civil judgments, and state and federal tax liens. Public record data must now contain minimum personal identifying information (PII) and be collected at more frequent intervals.

For a PII record to appear on a consumer credit report, public record data will have to comply with these two new NCAP standards:

• The minimum required of consumer identifying information: (1) name, (2) address, and (3) Social Security number and/or date of birth; and
• The minimum frequency of courthouse visits to obtain newly filed and updated public records of at least every 90 days.

Early preliminary data analysis conducted by the CRAs on the effect of the new NCAP standards on current public records reporting projected that the majority of civil judgment public records data would not meet the new standards. A similar analysis of tax lien data suggested that as much as half of the collected data would not meet the enhanced PII requirements. For compliance reasons with terms of the settlement agreement, the CRAs elected to remove all public records which did not meet the minimum PII standards beginning July 1, 2017.

Bankruptcy public record data will not be affected by the PII requirements since bankruptcy records already meet the enhanced standard of minimum personal identifying information.

The CRAs maintain five types of consumer information:

• identifying information such as name, address, Social Security number, and birthdate;
• current and past credit account information, including information about mortgages, car loans, and credit cards;
• public records such as bankruptcies, foreclosures, civil judgments, and tax liens;
• collection accounts (debts that have been turned over to a collection agency); and
• inquiries (requests to access a consumer credit report).

The consumer information is used by creditors to assess the consumer’s credit worthiness.

Consumer debt obligations for judgments and liens can be a decisioning factor by the landlord in qualifying an applicant. Consumer credit data analysis has shown that consumers with judgment and lien records are more likely to default on other debt obligations than would consumers without judgment or lien records.

The NCAP standards may affect a landlord’s credit decisioning for some applicants. With the removal of non-standard public records data from consumer credit reports, it is possible that some consumers will have a positive change in credit score, although CRA analyses show that the changes will have a modest impact on credit scoring. If a landlord or property manager relies solely upon the consumer’s credit report to evaluate the applicant’s credit risk potential, the rental decision could be compromised by the omission of public record data. The removal of non-standard data could create a false positive of a consumer’s lower credit risk. Thus, an applicant could appear more credit-worthy than he really is. The absence of public records data in a consumer credit report should not be taken as an indication there is no public record.

While for some tenants, the new NCAP standards appear to give a more favorable reporting advantage, it cannot change the facts of a civil judgment or tax lien case. The consumer still bears the legal obligation to clear the judgment or lien against him.

It should be made clear however that the removal of public reports for tax liens and civil judgments from consumer credit reports applies only to those public records which do not meet the enhanced NCAP standard of minimum personal identifying information. Tax lien data which meets PII standards will remain a reported public records item in the credit report. As noted above, civil judgments in the majority of cases do not meet the new standards.

Without adequate due diligence in tenant screening landlords and property managers could potentially offer tenancy to a high risk applicant which could result in tenant lease defaults and eviction. A landlord must take every care to reduce claims of negligence in his business operations. A credit report and/or credit score are familiar tenant screening tools. However these are not the only screening tools that a landlord should utilize to qualify applicants to the landlord’s rental standards.

Landlords should carefully review their existing tenant screening policies and practices to ensure they are fully protecting their rental operations through due diligence and risk management measures. Understanding the process of consumer credit reporting and the application of consumer data to his tenant screening standards allows a landlord to make a more informed decision in tenant selection.

Candidate assessments help expand the talent pool of potential hires. Creating a larger talent pool of pre-assessed candidates is a proactive measure for workforce development and future growth. Candidate talent assessments play an important role in an organization’s recruiting, hiring, and retention strategies for a productive, long-term workforce.

There are a variety of tools that can be used for candidate assessments, screenings, and testing. Organizations are most interested in tools that can help predict with good accuracy whether the candidate is well qualified to perform to required job standards and responsibilities.

By conducting behavioral and skill based assessments, employers gather relevant data for analysis and evaluation of a potential hire’s skills, knowledge, and abilities specific to job requirements. The assessment data, together with traditional background screenings and verifications, help the employing organization make a more informed hiring decision. Assessment tools when properly administered and correctly analyzed can help predict how quickly the new hire can assimilate into the workforce, become productive, and contribute to the organization over longer term employment.

Incorporating candidate assessment tools into the initial phases of hiring allows recruiters to more quickly identify well-matched candidates to job requirements and, as a result, expedite the hiring process. A better fit between the organization and the candidate can avoid a potential bad hire. It has been estimated that one in five hiring decisions would not have been made if adequate assessment and evaluations had been conducted. A bad hire, whether from a job performance standard or workforce interactions, is a costly decision throughout the employment term.

Before selecting assessment models, an organization should conduct job analyses to determine job requirements and corresponding employee skill sets and characteristics. It is important that assessment tools evaluate candidates on the basis of job related skills and proficiencies.

The organization may need to evaluate a number of assessment models and delivery platforms to choose the right model for its business needs. The validity, accuracy, and reliability of assessment models should be a priority in considering different models. A single model may not be adequate to assess the desired skill level and knowledge requirements of all jobs in the organization. It may be that several different assessment models should be used for evaluating candidates to fully capture relevant data.

Candidate assessment tools will have limitations. Organizations and candidates should be aware of possible bias; inconsistency or variation in administration of the selected model(s); manipulative, incomplete or inaccurate candidate responses; or other factors that could influence, limit, or skew assessment outcomes for accuracy and validity. Every effort should be taken by an organization to educate and train hiring assessment personnel on understanding assessment model(s) design, administration, and scoring metrics to minimize system errors, limitations, or flawed data.

Assessments should measure job related skills and abilities. Interpersonal skills, communication skills, planning and organizational abilities, leadership experience, teamwork building, and analytical skills may also be assessed as needed for specific jobs. Simulation exercises such as role play can assess various abilities including job knowledge, cognitive ability, general skills, and personality traits.

Skill based assessments are commonly used assessments to evaluate candidate hard skills. A hard skill gained from education, training, and experience is easily demonstrated by a candidate with the requisite skill. Candidates without such experience will not be able to successfully complete a required skill test and should not be advanced for hiring considerations.

Behavioral assessments are used to evaluate a candidate’s strengths and weaknesses, values, and personality traits. If behavioral assessments are backed by scientific principles proven to have reliability and validity, the assessment data provides insight for candidate performance and development. For organizations looking to match candidate personality with corporate culture, behavioral assessments may be of benefit in identifying good prospects for employment.

Some of the most commonly used candidate assessment tools include:

• Interviews
• Work Simulations/Work Samples
• Cognitive Ability Assessment
• Personality Tests

Interviews

Structured formal interviews are often used to evaluate a candidate’s job skills, experiences, and communication skills as candidates respond to a set of pre-determined questions developed from job specifications and requirements. All candidates are asked the same set of questions and responses are recorded for analysis and evaluation for potential hire. Many organizations use structured interviews as a means to help defend against candidate claims of bias and discriminatory treatment.

Informal reviews, those with no set format or prepared job related questions, are often too subjective in nature and generally do not provide the relevant data needed for analysis and evaluation of candidate skills. An unstructured interview is unlikely to accurately predict a candidate’s future job performance.

Work Simulations

Work simulation is an assessment tool that allows the organization to see how candidates perform under pressure in a simulated work environment. Using role play exercises or requiring a candidate to complete a sample of a job related task allows the organization to assess the candidate’s decision making skills, abilities to prioritize and multi-task, and perform specific job skills required for actual job performance. When developed using actual work requirements and administered correctly, work simulations can be a reliable indicator of job performance.

Combination Interview and Work Simulations

While traditional structured interviews are the most common of all candidate assessments for all types of organizations, many companies combine the interview with work simulations or role play exercises to gain a better sense of how the candidate will handle job responsibilities, interact with other employees, and produce an acceptable work product. For many employers using this combination of assessment tools provides an adequate and effective means of evaluating a job candidate.

Cognitive Ability Tests

Cognitive ability tests are designed to measure critical thinking and problem solving, abilities that are fundamental to job performance. Assessment may be conducted to measure the candidate’s aptitude to quickly learn new material, apply logic, and demonstrate reading comprehension and mathematical reasoning. This type of assessment has a good level of predictive validity of a candidate’s work performance and the potential for leadership and higher levels of job responsibilities.

Personality Tests

Personality tests help manage organizational risk by assessing the candidate’s behavioral traits in relationship to job requirements, interpersonal interactions, and the culture of the organization. Attributes of honesty, dependability, initiative, conscientiousness, and willingness to work with others may be indicators of a potential good hire.

It is unlikely that a single test by itself can be a perfect predictor of future work performance. Accordingly, many organizations use a combination of screenings and testing to assess several relevant skills and abilities of a candidate. This in itself can provide a broader perspective of candidate knowledge and abilities and a more reliable, objective evaluation of the candidate as a prospective employee. It is important for defensibility of the organization’s hiring process to use objective, validated metrics in testing.

Properly developed and validated hiring assessments such as interviews, work simulations, cognitive reasoning and problem solving tests, and personality traits assessments, by their structure and design have been shown to be of value to an organization to provide an objective, reliable means to predict an candidate’s future work performance and contribution to an organization’s goals.

Using candidate assessment tools to evaluate potential hires increases the likelihood of a better hire, a productive employee, and greater employee retention. In turn these benefits can help reduce organizational costs associated with employee hiring, training, and turnover. A fully integrated hiring assessment policy using bona fide screenings and testing can contribute to a more effective workforce with greater productivity.