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New Legislation affecting rental applications

The Virginia Landlord Tenant Act has seen a lot of updates over the past year. Most recently, a section J has been added to Va. Code, § 55.1-1245 (2021). This new addition has a short shelf life (from March 1, 2021, through July 1, 2021) and will be immediately replaced by an almost identical section that will be in effect until July 1, 2028.

Section J applies only to Landlords who own more than four rental units (or have more than a ten percent ownership interest in more than four rental units) and relates to the rental application screening process. Landlords that fall in this category cannot deny an application based “payment history, or an eviction for nonpayment of rent” that occurred or occurs during Virginia’s state of Emergency. Specifically, Landlords:

“shall not take any adverse action, as defined in 15 U.S.C. § 1681a(k), against an applicant for tenancy based solely on payment history or an eviction for nonpayment of rent that occurred during the period beginning on March 12, 2020, and ending 30 days after the expiration or revocation of any state of emergency declared by the Governor related to the COVID-19 pandemic.”

If the screening process results in an application denial, the Landlord must comply with new requirements. In addition to continuing to comply with Fair Housing laws, the Fair Credit Reporting Act, Landlords must now add new language to denial letters. Specifically, in addition to current requirements, denial letters must now include the following:

  1. Language to inform the applicant of her or his, “right to assert that his failure to qualify was based upon payment history or an eviction based on nonpayment of rent that occurred during the period beginning on March 12, 2020, and ending 30 days after the expiration or revocation of any state of emergency related to the COVID-19 pandemic.”,
  2. The statewide legal aid telephone number, web site, and address, and
  3. Language to inform, “the applicant that he must assert his right to challenge the denial within seven days of the postmark date.”

Once the written denial letter is mailed, Landlords must wait seven days from the postmark date for the tenant to respond. If the applicant does not respond within that time frame, the Landlord may proceed. This waiting period may be reduced to the close of the following business day, so long as the Landlord also communicates the denial via telephone or electronic means. Landlords must be able to validate the date and time that any communication sent by electronic or telephonic means was sent to the applicant.

If the denied applicant responds to assert her right and the Landlord’s decision was made based on a “consumer or tenant screening report”, additional Landlord action is required.  They must, “make a good faith effort to contact the generator of the report to ascertain whether such determination was due solely to the applicant for tenancy’s payment history or an eviction for nonpayment that occurred during Virginia’s State of Emergency.” Section J requires the landlord to wait an additional three business days for a response. If no response is received, the Landlord may then proceed.

Last, if a Landlord fails to comply with the above requirements, Section J allows for statutory damages of $1,000.00 and attorney’s fee.

Right now it’s difficult, if not impossible, to determine how the implications of Section J and eventually Section I, will play out on a practical basis. As always, we will stay in front of this, keep you in the loop, and make sure we are all in the best position possible.