The official publication of the Arizona Multihousing Association
Fighting housing discrimination
NEWS & HAPPENINGS Quarterpenny Management taps Elizabeth Beaulieu
LEGISLATIVE UPDATE Phoenix Neighborhood Services Department updates ordinances
Supreme Court upholds use of Disparate Impact Analysis under the Fair Housing Act
BEST PRACTICES Q&A with Pete Aronchick of WASH Laundry
AMA helps to build your business Let’s face it, one of the key reasons that we all get involved in trade associations like the AMA is to help to build and improve our businesses. The summer season brings AMA members together for a number of signature events intended to do just that — help us build our networks and grow business. Tucson’s Reverse Trade Show offers members a unique and fun way to get to know key regular members and share innovations and services. The annual Trade Show and Tributes is highlighted by the huge trade show where members can network and show their spirit and service. I enjoy walking those trade show floors and seeing how many members take the time to connect. This year’s NAA conference in Las Vegas provided a wide array of educational opportunities for our teams. These national conferences help connect the AMA to the national scene where we learn more about model legislation, new technologies and leadership trainings to improve operations and the regulatory environment. We are also fortunate to have Mike Clow of Greystar on the NAA national Executive Committee and Amy Smith of Bella Investments representing Arizona on the board of directors. These leaders demonstrate Arizona’s strong leadership in the multifamily industry. Special congratulations to Mike on his leadership of this conference! Looking forward to the fall, we are preparing for new professional certification programs. If your organization plans on development of top talent, these certifications are great ways to build skills and expertise. Starting in September, the AMA will offer classes for the National Apartment Leasing Professional (NALP) and Certified Apartment Portfolio Supervisor (CAPS) certifications. Both programs require a significant time commitment and its best to plan now and get your team members enrolled soon! Have a great summer and stay engaged with the AMA!
— Christine E. Shipley, AMA Board Chair, Dunlap & Magee
Ready for a leadership role with the AMA?
s we prepare for our annual board retreat this summer, I am awed by the talent and the expertise that our AMA board members bring to our organization. Their strategic governance of our organization has led to our incredible growth over the past years. Without industry leaders on our board, our association and our industry would suffer. Our board members are highly successful business leaders who are ready and willing to work to improve the greater industry in Arizona. They help to guide the development of educational opportunities for your teams, they guide the advocacy efforts of our Association at the state level and in local communities and they help to ensure our long-term financial health. Their expertise in business translates directly into the business of our trade association and we are grateful for their work. Without an active board, we would not be able to support the active programming that we deliver every year. The Leadership Development Committee, currently chaired by Kimberly Fitch, recruits individuals each year to be nominated for open positions on the board. Members in good standing who have been involved on AMA committees and events, have considered this opportunity, and have discussed the time commitment with your employer, may apply by simply sending an email or letter of interest to me or Kim Fitch. — Tom Simplot, AMA President
Interested in serving on the AMA Board of Directors? Nominations are now open! The Leadership Development Committee meets annually to nominate members for the AMA Board. There are three-year seats for Regular members and one-year seats for Associate members. Please send your letter of interest no later than Friday, September 11, 2015 to Leadership Development Committee, c/o Tom Simplot, President/CEO, firstname.lastname@example.org. www.azmultihousing.org
Apartment News > August/September 2015
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Let’s Talk! Amy Davidson MDU Manager, Arizona Amy.Davidson@Cox.com 623-328-3805
TABLE OF CONTENTS
Apartment News > August/September 2015 > www.azmultihousing.org 12
ALL PHASES OF PEST CONTROL
• Monthly Pest Control Programs • Termite Specialists/ FREE Est.
12 Fighting housing discrimination Supreme Court upholds use of the Disparate Impact Analysis Fair Housing Act
14 Q & A Arizona Real Estate Commissioner Judy Lowe
DEPARTMENTS 6 News & Happenings 8 Legislative Update 10 Legally Speaking 16 Best Practices 17 Events & Education 18 On the Scene 20 Focus on Tucson 22 Thank You Patron Members
AMA Main Office 818 N. 1st St., Phoenix, AZ 85004; 602-296-6200; Fax:602-296-6178 AMA Tucson Office 660 S. Country Club Road, Tucson, AZ 85716; 520-323-0643; Fax: 520-323-3399
AMA STAFF Tom Simplot President & CEO email@example.com James Tunnell Vice President firstname.lastname@example.org 602-296-6212 Erika Kowalski Director of Operations email@example.com 602-296-6210 Michelle Rill Manager of Major Events firstname.lastname@example.org 602-296-6205 Robert Schmitz Manager of Community Outreach & Education email@example.com 602-296-6204 Sharon Hosfeld AZ Smoke-Free Community Coordinator/Government Affairs Analyst firstname.lastname@example.org 602-296-6214
AMA TUCSON STAFF Desi Brinkman Operations & Membership Coordinator email@example.com 602-296-6203 Stephanie Garcia Community Outreach & Education Coordinator firstname.lastname@example.org 602-296-6208 Amy Hindenlang Membership Administrator email@example.com 602-296-6209 Kyle Simplot Accounting Assistant firstname.lastname@example.org 602-296-6207 Todd Bradford Membership Benefit Services Consultant email@example.com 602-377-2553 Cassidy Campana Apartment News Editor & Communications Consultant firstname.lastname@example.org 602-770-6014
Lauren Romero Tucson Area Association Executive email@example.com 520-323-0643
• Bee Service/ Emergency • Beehive Removal • Roach Control/ Programs
ARIZONA LANDLORD TENANT ACT http://bit.ly/1oYUoTA
• Pigeon Control
General Manager: Cami Kaiser Creative Development Director: Isaac Moya Editor: Jim Williams Editorial Coordinator: Nick Kostenko Senior Managing Art Director: Tracey Phalen Design: Rachel Tullio Management Company Advertising: Enrique Grove 602-444-8916 Advertising: Regina Key 602-444-6865; Kelli Fawcett 602-444-6889 Advertising Coordinator: Dominick Galluzzo
• Scorpion Control • Rodents, Gophers, Wasps
EXTRA COPIES If you would like additional copies of the Apartment News delivered to your office, just email Amy at firstname.lastname@example.org with the names and address you would like added.
• Bed Bugs
ARIZONA DEPARTMENT OF HOUSING www.housingaz.com
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AMA NEWS & HAPPENINGS
P.B. Bell adds 2 executives P.B. Bell has added two new members to its executive team. Justin Steltenpohl, vice president general counsel, and Brandon Corn, business analysis director. In his new role, Steltenpohl manages all legal matters for the company, including corporate governance issues, partnership agreement negotiation, and Brandon Corn financing transactions. He has more than 15 years of experience in the real estate industry, specializing in financial services and corporate governance. Justin Steltenpohl In his new role as business analysis director, Corn is responsible for implementing and managing property software systems and processes. Corn has a decade of experience in the multifamily housing industry, serving in both the corporate support environment and as part of property operations teams.
QUARTERPENNY MANAGEMENT LAUNCHES IN TUCSON
Quarterpenny Management began its operations earlier this year with management of the seven Farthing Properties located in Tucson and Green Valley. The Farthings wanted to work to consolidate its operations of both the Arizona properties and other holdings they have in other states. Elizabeth Beaulieu, CAPS, was named the portfolio director along with Cheryl Gaida-Vieux as the portfolio manager and Kevin Weekly as the new Controller. In her new role, Beaulieu will oversee all aspects of the 1,586 units in Arizona along with other support for the family holdings. The Quarterpenny Management employees at both the site and corporate levels have a long history of AMA involvement and look forward to the continued support of this association in Education, Networking and Government Affairs.
Apartment News > August/September 2015
Alliance Residential named in Careerbuilder Top Companies to Work for in Arizona for 2015 Alliance Residential, the largest multifamily developer and seventh largest multifamily manager in the nation, has been named one of CareerBuilder’s Top Companies to Work for in Arizona by Republic Media for the second time. Companies are evaluated and selected based on a combination of overall satisfaction scores from an employee engagement survey and evaluation from an employer questionnaire covering topics related to HR programs, benefits and workplace culture.
“Our ability to attract and retain top talent directly contributes to the company’s consistent growth, profitability and industry-leading initiatives,” Greta Schneider, Alliance’s vice president of talent, said. Alliance offers many unique programs for their associates. One area of focus is professional development, where associates can utilize their learning management platform, Alliance University to earn real estate credentials and ongoing education.
Mark Taylor promotes Riggs to director of sales, training Jessica Riggs has been promoted to director of Sales & Training at Mark-Taylor Residential. Riggs joined Mark-Taylor in 2008 as an administrative assistant, rapidly ascending to an executive-level position overseeing Mark-Taylor’s robust in-house training program. Today Mark-Taylor manages 45-plus luxury communities in Arizona and Nevada and Riggs oversees the company’s state-of-the-art training program Mark-Taylor University. The inhouse training offers customized courses and programs to set employees on a path of continual success with abundant opportunities for advancement. “Jessica is a rock star, and is typical of the best-in-class employees we have at Mark-Taylor,” said Mark-Taylor Residential President Dale Phillips. “She is a born leader, works hard, is dedicated and clearly committed to keeping our place at the top of preferred places to work.” www.azmultihousing.org
AMA NEWS & HAPPENINGS
Scott Cook joins Allison-Shelton as principal and shareholder Allison-Shelton Real Estate Services recently announced that Scott Cook has joined the firm as a Principal and Shareholder. He joins the firm after a 15 year career with Greystar, where for the past 5 years he served as Chief Financial Officer of the property management division. Allison-Shelton Principal Tom Shelton noted that “having known Scott for the past twenty-five years…, there is no doubt that he is the perfect fit for our company as we aggressively expand our portfolio throughout the United States. His understanding of the multifamily business is unparalleled and we couldn’t be any more excited to have Scott as our new partner.”
MEB awarded management of 11 communities MEB Management Services, a leading provider of multifamily management, has been selected by CVG Properties Services to manage their portfolio of apartments in Arizona and California. CVG Properties, a private
real estate investment firm offering partnership investments in residential income properties for institutions and individuals, had utilized their in-house team for the property management of the multifamily assets.
AMA got hacked! New web address, emails
Last month, the AMA’s website was maliciously hacked and the association’s team worked diligently to ensure that operations were restored as quickly as possible. In less than one week, all of the files, email, databases and resources were transitioned to a new URL. The association now has a new domain name — www.azmultihousing. org. The beginnings of AMA e-mail addresses have remained the same and the new domain is @azmultihousing.org. Please note all of the new email addresses for the AMA team. Emails sent to the old addresses should be forwarded thanks to the work of the technology team. The association leadership appreciates the patience and support of its members.
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KEEPING IT COOL Phoenix strengthens air conditioning requirements COURTESY OF CITY OF PHOENIX, NEIGHBORHOOD SERVICES DEPARTMENT
ver the last five years, the City of Phoenix’s Neighborhood Services Department (NSD) has received 300+ resident complaints of living units not providing air conditioning. This can be especially grueling during the hot summer months. The City’s current ordinance (Chapter 39) did not provide staff with the specific language that required landlords to maintain adequate temperature ranges. The Law Department researched other city ordinances and recommended the following heating and cooling temperature requirements for habitable spaces: > 70 degrees Fahrenheit for heating > 86 degrees Fahrenheit for evaporative cooling > 82 degrees Fahrenheit for air conditioning > P rohibit use of unvented portable space heaters, burning solid, liquid or gaseous fuels > P rohibit the use of cooking appliances as heaters Five citywide community input sessions were held during the summer about the proposed ordinance changes and staff also met with NSD’s partners from the Arizona Multihousing
Apartment News > August/September 2015
Association and the Phoenix Association of Realtors to get their feedback. Both groups expressed support for the heating and cooling requirements. These changes also provide the tools for NSD inspectors to enforce this issue when the summer months arrive in Phoenix. Several other amendments were made based on public input, including board up standards modifications, address numbers’ visibility and more. The Phoenix City Council unanimously approved these ordinance changes. This is another example of how the city and NSD will work to protect the health and well-being of residents.
Don’t forget to register Pursuant to A.R.S. § 33-1902, any residential rental property must register certain information related to the property and its ownership with the County Assessor in which the property is located. Failure to register residential rental properties with the county may result in a civil penalty. Rental registration forms can be found on the County Assessor’s web site. For properties located in Maricopa County, visit mcaccessor.maricopa.gov/property/ residential-rental-property. For properties located in Pima County, visit asr.pima.gov/links/respropclass.aspx. www.azmultihousing.org
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SERVICE & REPAIR Federally subsidized housing updates By Judy Drickey-Prohow, Esq., Law Offices of Scott M. Clark, P.C.
n its 2014 appropriation to United States Department of Housing and Urban Development (HUD), Congress directed HUD to ensure that federally subsidized properties are maintained in good repair and provide clean, safe and usable housing for all participants. In response to that directive HUD issued a Notice, dated March 2, 2015 establishing new procedures for ensuring that federally subsidized properties meet the standards that Congress requires. Properties covered by these new procedures include the following: >> Insured and non-insured projects with project-based assistance under Section 8 or a “contract for similar projectbased assistance.” HUD has interpreted this latter requirement to include all multifamily housing projects that are required to use the TRACS program, including programs with a: >> Rent Supplement Contract >> RAP Contract >> Section 202 Project Rental Assistance Contract >> Section 811 Project Rental Assistance Contract >> Section 202/162 Project Assistance Contract >> Section 202/8 Housing Assistance Payments Contract >> Section 811 Project Rental Assistance Contract, and >> Senior Preservation Rental Assistance Contracts Excluded from coverage are units assisted by the Section 8 Project-Based Voucher Program and Public Housing assisted under Section 9 of the United States Housing Act of 1937. Under the new procedures properties that receive failing scores from HUD’s real estates assessment center (REAC) will be subject to certain corrective actions that may include penalties up to putting the property into foreclosure and/or requiring a change of management. Specifically HUD is required to
take specific actions upon the following triggers: >> When a project receives a REAC score of 30 or less. >> When a project receives a REAC score between 31 and 59 and the owner fails to certify in writing that all deficiencies have been corrected, or >> When a project receives a REAC score between 31 and 59 and receives consecutive scores of less than 60 on REAC inspections. Following issuance of such scores (and failure, upon appeal, to have the scores raised) HUD will issue the owner the standard Notice of Violation (NOV) and/or Notice of Default (NOD), requiring the owner to survey 100 percent of the project’s units and take corrective action for all physical deficiencies. Going forward the Notice will clearly label that portion of the NOD or NOV that sets out the plan and require the owner to: >> Conduct a survey of 100 percent of the project, identifying all physical deficiencies; >> Correct the physical deficiencies identified from the survey, including but not limited to those previously identified in the REAC inspection; >> Execute a certification that the project is in compliance with HUD’s physical condition standards and all state and local codes and submit the completed survey and certification to HUD within 60 days; and >> Provide all tenants with a Notice of Compliance, Disposition and Enforcement Plan for the project and provide HUD with a certification of compliance with this requirement. Where properties are unable to correct all deficiencies within 60 days, owners must now submit a repair plan to HUD
The views expressed here are generalized advice or information. Fact-specific questions should always be referred to legal counsel. Statements and opinions expressed in these legal columns are solely those of the author or authors. This advice does not necessarily represent the views or opinions of the Arizona Multihousing Association.
Apartment News > August/September 2015
with the 100 percent survey and request an extension of time to complete the repairs. The repair plan must provide the cost and source of funds that will be used to make the repairs. If the repair plan is not approved, HUD will schedule a re-inspection as soon as possible after the 60-day cure period ends. If the results of the re-inspection show that the project continues to be in poor physical condition, as manifested by a score of 59 or less, then HUD must consider various alternatives including imposition of civil money penalties, abatement of subsidies and possible assignment of an FHA loan and/or foreclosure. If an owner fails to comply with the terms of a corrective action plan, the new regulations allow HUD to replace project management with a management agent acceptable to HUD AND require HUD to take one or more of the following four actions and provide notice of these actions to the owner, local government and any contract administrators and/or mortgagees: >> Impose civil money penalties. >> Abate, including partial abatement, of any Section 8 or other rental assistance contracts until all deficiencies have been corrected. If the rental assistance contract is to be terminated, the director must also request HUD approval to relocate all residents. >> Encourage a transfer of the project and/or transfer and assignment of the contract to a new owner. >> Seek judicial appointment of a receiver to manage the property and seek a judicial order of specific performance to cure all project deficiencies. In the event that any of these actions are taken, the project owner will also be required to provide a “Notice of Enforcement action” to all tenants, with the appropriate section marked for the initiation of an administrative proceeding for civil money penalties. In addition to these actions, the following actions may also be taken: >> In the case of an insured, HUD-held Section 202 or Section 811 direct loan or capital advance, the director may seek approval to proceed with assignment and/or foreclosure of the loan or capital advance, and >> The director may recommend that HUD exclude the owner from further participation in any HUD programs. Obviously these new rules have significant implications for owners and managers of covered subsidized multi-housing projects. Where there is uncertainty about the requirements for maintaining the premises and/or bringing it to the standard required by Congress, management is encouraged to consult with their HUD directors and ensure that they meet the standards at the time of the REAC inspection rather than waiting for any remediation period. Judy Drickey-Prohow is an attorney with the Law Offices of Scott M. Clark, P.C.. She can be reached at 520-241-1847. www.azmultihousing.org
LEGALLY SPEAKING Your questions answered
Bed bugs ... and other pests
By Andy M. Hull, Esq.,Hull, Holliday and Holliday, PLC. Q: I live in a pretty good sized apartment complex in North Phoenix. In early March, I discovered bed bugs on my mattress when I awoke during the middle of the night. I called my landlord to let them know and they arranged for pest control to come out. They came out twice and also had my carpet cleaned. I thought everything was fine until my child started having the same bites on her arms and legs. Obviously the treatments didn’t work. What responsibility does the landlord have towards getting rid of this pest? Am I able to get out of my lease and move somewhere else? A: If you did not bring the bed bugs into your apartment, then the landlord is responsible for treatment. You can deliver a written notice to the landlord to take reasonable steps to correct the problem. If the landlord makes a reasonable effort to treat it, the lease remains in effect. If the landlord doesn’t do this, you can break your lease and move out. The notice must give the landlord at least five (5) days to take treatment steps and you must cooperate and have your apartment ready for treatment. If you want to go online, the applicable law is A.R.S. § 33-1319 and A.R.S. § 33-1361 of the Arizona Residential Landlord and Tenant Act.
What are my legal options? Q: I moved into my apartment 6 months ago. I was shown a model apartment, but was given a much older unit. The neighbors smoke marijuana and leave trash everywhere. My upstairs neighbor runs something that vibrates my whole apartment. Repairs have been made to my apartment, but the problems (like mold around the windows) have returned. Management no longer returns my calls. A: You can give written notice delivered in person or sent certified mail to the landlord giving them a specific list of items that need to be corrected. They have ten (10) days to correct (five days if it’s health and safety related). You will have to agree to testify in court regarding the marijuana use, failure to pick up trash, noise issues and repairs. If the landlord fails to take steps reasonably related to correcting the issue you can terminate your lease and move out. Andy M. Hull is the principal of Hull, Holliday and Holliday, PLC. He can be reached at 602.230.0088. Apartment News > August/September 2015
Supreme Court upholds use of disparate impact analysis under the Fair Housing Act
FIGHTING HOUSING DISCRIMINATION In February 2013, the United States Department of Housing and Urban Development (HUD) released new rules involving “disparate effect” under the Fair Housing Act (FHA). In those rules HUD concluded that policies n a hotly contested decision, the and practices that had the U.S. Supreme Court has upheld effect of discriminating in HUD’s conclusion that parties can violation of the FHA, or rely on a “disparate impact” analysis that perpetuated existing to challenge decisions and policies by discrimination in violation municipalities, developers, housing of the FHA, constituted providers and others that have the effect unlawful discrimination.
BY JUDY DRICKEY-PROHOW, LAW OFFICE OF SCOTT M. CLARK
of creating or perpetuating discrimination in the nation’s housing markets. (Texas Department of Housing and Community Affairs v Inclusive Communities Project, Inc., June 25, 2015).
Challenging racial segregation
In its decision the Court found that Congress had intended to permit parties to use a disparate impact argument to challenge de facto racial segregation when it prohibited housing providers from “refusing to
Apartment News > August/September 2015
sell or rent…or otherwise make unavailable or deny a dwelling to any person because of race, color, religion, sex, familial status or national origin.” Specifically the Court said that: “Congress use of the phrase ‘otherwise make unavailable’ refers to the consequences of an action rather than the actor’s intent.” Thus, while most FHA complaints will continue to assert that a discriminatory housing practice occurred because of someone’s discriminatory intent, parties can also challenge policies and practices that are facially neutral but have the effect of excluding persons because of the person’s membership in any protected category. The Court also emphasized that disparate impact analysis use is limited. A plaintiff seeking to rely on a disparate impact analysis must show both a statistical imbalance and evidence that a www.azmultihousing.org
housing provider’s policy or practice caused the imbalance. Once a plaintiff has shown this imbalance and causality, the housing provider must be permitted to demonstrate that the policy or practice being challenged is necessary to achieve a valid interest. Thus, the Court said: Just as an employer may maintain a workplace requirement that causes a disparate impact if that requirement is a ‘reasonable measurement of job performance,’ so too must housing authorities and private developers be allowed to maintain a policy if they can prove it is necessary to achieve a valid interest. While the Court properly assumed that most disparate impact cases will involve issues like zoning, lending, and similar matters dealing with urban development and segregated housing patterns, the Court did not limit its analysis to those situations. It found, for example, that a disparate impact claim would not lie against an individual landlord who excluded individuals convicted of the illegal manufacture or distribution of a controlled substance, because “Congress ensured disparate impact would not lie if the landlord excluded tenants with such convictions.” By implication the Court left open the possibility that disparate impact claims could be made against individual landlords who relied on other policies or practices that do not fall into exceptions under the FHA and that can be demonstrated to create a statistical imbalance in a community.
Disparate effect rules When HUD looks at policies to determine whether they have a discriminatory effect, it is primarily looking at facially neutral rules, policies and procedures that statistically tend to exclude larger percentages of identifiable protected groups than others. This meets the criteria that the Supreme Court has approved, requiring challengers to show both a statistical imbalance and evidence pointing to some conduct by the housing provider that resulted in the disparity. Because rental criteria provide the www.azmultihousing.org
Claims alleging disparate effect may arise, for example, from a landlord’s use of rental criteria that excludes anyone with a criminal conviction from renting in the community. gateway to a determination of who will be permitted to live in a particular community, those criteria are the most likely areas where disparate effect challenges will initially occur for private landlords and management companies. Claims alleging disparate effect may arise, for example, from a landlord’s use of rental criteria that excludes anyone with a criminal conviction from renting in the community. At least in the employment setting, those criteria have been show to have a disparate impact in that they statistically exclude a higher percentage of racial or ethnic minorities than nonHispanic Whites from employment. If such a challenge is raised, the housing provider is obligated to demonstrate that the criteria are necessary to achieve a valid interest of the landlord or community. The Equal Employment Opportunity Commission’s (EEOC) recent guidance on consideration of criminal arrest and conviction records in employment provides a useful understanding of how HUD is likely to analyze similar practices in housing. See eeoc.gov/laws/ guidance/arrest_conviction.cfm. Other potential challenges should be expected, for example, when a property refuses to rent to Section 8 voucher holders, since that practice may have the effect of disproportionately excluding larger numbers of applicants with children, persons with disabilities and racial and ethnic minorities. A screening criterion that does not consider spousal support when calculating income may have the effect of excluding more women than men. In each of these scenarios, the policy or practice in question is
subject to challenge because it statistically excludes more persons of one protected group than others.
HUD’s Guidance to Investigators In its guidance to its own investigators, HUD concedes that in most cases a housing provider will be able to articulate some legitimate goal that the policy is “allegedly designed to serve.” Under HUD’s disparate effect rules a legally sufficient justification exists where the challenged practice: Is necessary to achieve one or more substantial, legitimate, non discriminatory interests of the housing provider, and Those interests could not be achieved by another practice that has a less discriminatory effect. These legitimate justifications must be supported by evidence and may not be hypothetical or speculative. If the housing provider cannot articulate a legitimate basis for the challenged practice, the housing provider is considered guilty of a violation of the FHA. Assuming the housing provider can show a legitimate reason for its policy, the investigation will then hone in on whether that goal is sufficient to establish “business necessity,” i.e., whether the rule, policy or practice is “needed to achieve this goal.” HUD requires its investigators to assess the legitimacy of these defenses by looking at several factors: Can the housing provider demonstrate that the identified problem that is being addressed by the rule or policy has, in fact, occurred in the past, as opposed to simply being a “prospective worry” of the provider? Has the housing provider demonstrated the seriousness of its concern over this problem by consulting an “expert” about it or has the housing provider simply relied on his/her own “gut reaction” in addressing the problem? If an expert was consulted, did this occur before the housing provider implemented the challenged policy and was the policy implemented at the CONTINUED ON PAGE 15 >
Apartment News > August/September 2015
on the property. There are many owners now that are expecting the property management licensee and/or company to carry a fidelity bond to protect the trust account.
with Arizona Real Estate Commissioner Judy Lowe
Q: Many rental property owners use property management companies. What should one look for in a property manager? Any person who is involved in the renting or property management of an Arizona property that they do not own is required to have an Arizona Real Estate License, unless they are exempt from the licensing requirement per the Arizona Judy Lowe Revised Statute. The Arizona Revised Statute also has statutory guidelines for the individual licensees who are involved in the property management activities. Real Estate licensees who practice property management should have strong accounting skills, and provide evidence of a strong real estate property management education and experience in property management. Do your homework on property managers An owner of a property who is preparing to hire a real estate licensee to manage an Arizona property, should first check to make sure the individual has an Arizona real estate license, by visiting www.azre.
Apartment News > August/September 2015
gov. This website will not only show the license history of a real estate licensee, but will also show the education history of the licensee, so the viewer can observe if the licensee has taken any courses in property management. Answers to most questions that an owner of an income property might have regarding what to expect from a property manager can be found on the website, as well as, the requirements of the licensee in serving and protecting the owner. Plan on a Management Agreement There should be a Management Agreement between the Broker and the Owner, with very explicit detail and terms, including the expected rental rates, limits on maintenance/repairs costs, the expected return to the owner, and the guarantee of a well-managed Owner’s trust account. The trust account receives the tenant’s security deposits and rent receipts, pays the maintenance costs of the property, and remits to the owners their proceeds. The real estate licensees’ monthly trust account reconciliation should be shared with the owner on a very regular basis, as well as, a copy of every lease agreement that is executed
Q: Your team has been working with Governor Ducey’s office to speed up processes and work at the “speed of business.” Can you share any successes or improvements that we should be aware of? Gov. Doug Ducey’s Lean Transformation Program is being rolled out in all Arizona Government agencies, including ADRE. This program is built around utilizing a TEAM within the Agency to create change in the culture and management systems of an agency to effect a more efficient and thus faster delivery of services and processes. At ADRE we have been very successful thus far in addressing the licensing processes in our real estate licensing and the builder development services divisions. In the coming months we will implement the LEAN concepts to better serve the real estate industry and to adhere to our mission of offering protection to the Arizona constituents in their real estate transactions. ADRE does not license or offer oversight for some apartment complexes where residential leasing agents or on-site managers are performing residential leasing activities on residential income property at no more than one location during the period of the agents’ or on-site managers’ regular workday, who do not receive any special compensation for any real estate activity requiring a real estate license, and who are employed by the owner or the owner’s licensed management agent to perform the duties customarily associated with that employment. ARS 32-2121. The Department of Real Estate does not enforce the Arizona Residential Landlord Tenant Act. A copy of this document can be found at the Arizona Department of Housing website, www.housing.az.gov. www.azmultihousing.org
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recommendation of the expert, or was the expert consulted only after the policy was established or after the housing provider was sued for unlawful discrimination? What other alternative policies or practices did the housing provider, and/ or its expert, consider for dealing with the identified problem, and if other alternatives were considered, why were they not adopted? HUD also directs its investigators to explore, with particularity, the availability of less discriminatory alternatives by discussing them with the complainant, the housing provider and if necessary, through independent investigative sources. Unless the housing provider can demonstrate that (1) it implemented a challenged policy or practice to address a legitimate issue, (2) it adopted the policy after reviewing various alternatives and consulting with experts, and (3) there are no less discriminatory alternatives that the property could have realistically used to accomplish its goal(s), a property can be held liable for violations of the FHA.
DISPARATE IMPACT LIABILITY August 5; 9 a.m.â€“noon $20 ($40 non-members)
AMA Office, 818 N. 1st St., Phoenix, 85004 Presenter: Judy Drickey-Prohow, Law Offices of Scott M. Clark, P.C.
The Supreme Court has now definitely answered HUDâ€™s detractors who have long contended that HUD has exceeded its statutory authority by promulgating rules and litigating challenges to the FHA that were based on de facto segregation rather than intentionally discriminatory acts. This decision puts housing providers on notice that they can violate the FHA both by their actions and their inactions. Continuing to enforce a policy or practice simply because it has worked in the past does not provide any assurance that the policy currently complies with fair housing laws. Properties must be vigilant in evaluating the effects of their existing and prospective policies and, if a policy or rule has a discriminatory effect on an identifiable group, must be able to justify their need for the policy. In addition, as with any other practice, documentation is critical. Any person having questions about the effect of a policy, practice, rule or screening criterion should consult legal counsel at any time.
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A conversation with Pete Aronchick, WASH Laundry
12 working hours from the placed service call throughout the US and Canada. Ask if your laundry company offers a Service App that residents and managers can use. Do they have 24/7 live phone service? Are the proposed washers and dryers new or used? Is there a decorating allowance for the laundry rooms or an up-front bonus? Things like newer units and upgraded décor can make a big difference in a community, and in usage rates by residents. We want our clients’ residents to feel comfortable and confident in the service.
ete Aronchick has worked in the laundry systems business for more than 17 years. He brings expertise from some of the world’s leading companies and has been heading up the WASH Laundry team in Arizona for the past three years as district sales manager.
Q: Laundry can be an important revenue stream for a management company or independent operator. What advice would you give operators who are shopping for a new service? I would recommend for the owner/ Property Manager to request a copy of the current laundry lease from the laundry route provider. Check the lease expiration date. Verify if the lease has an “Automatic Renewal” or the “First Right of Refusal” clause (this is very important). Request the reported laundry collections year to date. Check the lease for the monthly commission split (ie: 50/50). Ask how old the current washers and dryers are and what are the charges per wash and dry ($1.50/$1?). You want to charge a fair market rate for your area.
Photo by John Harris
Pete Aronchick – Arizona District Manager WASH Laundry Systems
Q: How has this business evolved in the past 20 years? Technology has really changed our business like so many others. Today, commercial laundry systems have evolved with Smartcard systems, including
Apartment News > August/September 2015
wireless technology that accepts credit/ debit cards or cash/coin. These systems allow residents to check status of the washers and dryers for their availability or completion of cycle. The system sends a text or email to the resident. No more checking back every few hours or finding your wet clothes on top of a dryer.
Q: With more than 90 percent of the world’s buildings relying on coin operated or card laundry systems, what should operators know when they are shopping for a service? Smart apartment operators will educate themselves on all of the available options today. Service response time is also a major issue for multifamily communities. For WASH Laundry, our mission statement sets a goal of repairing units within
Q: When you are meeting with a new client, what kinds of things make you stand out? Experience, honesty and integrity. Oh yeah, I am funny too. I would say that one of my best attributes is a fast response to an email, phone call or text. Super important!
Q: How is the AMA helping you to build your business here in Arizona? The AMA has allowed me to establish the Wash Laundry footprint in Arizona. Wash Laundry is a Platinum Sponsor of the AMA. We believe in supporting our Arizona Multifamily Association. I got involved early on in our membership. If you are patient, and get involved, the association will be good to you. It’s a great place to network! www.washlaundry.com www.azmultihousing.org
EVENTS & EDUCATION
Classes held at the AMA Gallery Space, 818 N. 1st St., Phoenix 85004
AMCF BOWL A THON
NATIONAL APARTMENT LEASING PROFESSIONAL (NALP)
Aug. 21; 2–6 p.m. Brunswick Zone Mesa, 1754 W. Southern Ave., Mesa
Sept. 3, 17; Oct. 8, 22, Nov. 12; 9 a.m.–5 p.m. $359 ($475 non-members) Leasing professionals are the first people prospective residents meet, and often their only gauge of the property staff. This course is designed to teach these professionals skills to help them become top producers. This program is a total of five days and attendance for all classes is mandatory.
PHOENIX DINNER MEETING Sept. 16; 5–8 p.m. Phoenix Country Club, 2901 N. 7th St., Phoenix Guest Speaker: Phoenix Fire Chief Kara Kalkbrenner
FAIR HOUSING Aug. 18 and Oct. 20; 9 a.m.–noon $20 ($40 non-members) Continuing Education Credits: Fair Housing
AZ LANDLORD TENANT March 17, May 21, Sept. 15 and Nov. 17; 9 a.m.–noon $20 ($40 non-members); Continuing Education Credits: Legal Issues
CERTIFIED APARTMENT PORTFOLIO SUPERVISOR (CAPS) Sept. 8-12; 9 a.m.-5 p.m. $1,200 ($1,475 non-members) This nationally recognized designation is for multi-site supervisors and experienced apartment managers with a CAM, ARM or RAM designation. This program is a total of five days and attendance for all classes is mandatory.
Tucson ASSOCIATE MEMBER COUNCIL FEATURING PRIME RESIDENTIAL Aug. 11; Park Place Apartments
AMA TUCSON/KOGLEMEIER LAW GROUP EDUCATION CONFERENCE & TRADE SHOW Sept. 18; Tucson Convention Center See AMA website for cost and more details.
TUCSON DINNER MEETING Oct. 15 See AMA website for cost and more details.
TUCSON NETWORKING- CHILI COOK OFF Oct, 29; Redi Carpet
DISPARATE IMPACT LIABILITY August 5; 9:00 a.m.–noon $20 ($40 non-members) AMA Office, 818 N. 1st St., Phoenix, 85004 Presenter: Judy Drickey-Prohow, Law Offices of Scott M. Clark, P.C.
INTRO TO PROPERTY MANAGEMENT Aug. 15; 9 a.m.-noon Northwest Exterminating 4954 N. Shamrock Place, Tucson $20 ($40 non-members)
Call today! Law Enforcement Specialists has ofﬁcers standing by: Please call 623-825-6700 or 888-572-2442; by email at
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ON THE SCENE RECENT AMA EVENTS
TAKE A VICTORY LAP! Mark-Taylor VP shares highlights from legislative session During the most recent AMA Dinner Meeting, John Carlson, Government Affairs Committee Chair and Vice President, Mark-Taylor Residential, and Tom Simplot, AMA President/CEO, took AMA members on a Victory Lap of this year’s legislative John Carlson work following a successful legislative session and trip to Washington, DC with the AMA team. As the chair of the Government Affairs Committee for the AMA, Carlson has devoted countless hours to helping enhance Arizona’s multifamily industry and the regulatory environment for AMA members.
Networking in paradise Tucson celebrated in paradise this year at the annual the Reverse Trade Show event held at the Viscount Suites. More than 50 teams joined the AMA for this popular event, and they met with nine management companies who went all out to treat them to a relaxing event in “paradise.” One of the best networking opportunities of the year, the show brings together members for a more personal networking experience, where management companies have time to meet directly with regular members and learn about their companies, products and services. Special thanks to the show sponsors — Diamond: American Technologies Inc; Emerald: Ferguson Enterprises, Law Offices of Scott M. Clark P.C., Signasure; Ruby: Tucson Appliance Company, Valley Wide Security; Turquoise: Arizona Smoke Free Living, Belfor Property Restoration, The Greenspan Co./Adjusters International, Sunland Asphalt, AZ Partsmaster, Rentpath, Apartment Finder, Dogwood Building Supply.
Tucson’s AMC visits with Quarterpenny
BEST OF THEME WINNERS (left) 1st Place: MEB Management Services (above) 2nd Place: Scotia Group Management.
Quarterpenny Management hosted Tucson’s AMC group in June at their beautiful community, Lantana Apartments. QPM introduced their new management company to approximately 40 AMC representatives. Also in attendance was QPM’s portfolio director, Elizabeth Beaulieu, portfolio manager, Cheryl Gaida- Vieux; property managers, assistant managers and maintenance supervisors from seven properties that are owned and managed by QPM. Elizabeth Beaulieu shared insights about QPM’s operations in Tucson and their decision to create their own management company for their properties. Elizabeth assured the group that QPM and their long-term employees who represent the properties are committed to using AMA Associate Members first whenever possible. Special thanks to Mike Rochon of Distinctive Carpets for his continued leadership of AMC and his support of these gatherings.
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FOCUS ON TUCSON
Get to know AMA’s Tucson Area Association Executive
auren Romero, the AMA’s new Tucson Area Association Executive, has been in Tucson ever since moving from her hometown of Chicago. After graduating from Columbia College Chicago, Lauren came to Tucson to visit and enjoyed the warm winters too much. She started her career in the apartment industry as a leasing consultant with P.B. Bell and was promoted up to portfolio director of Tucson Operations. She had experience managing an array of properties including both multihousing and commercial. Lauren left the industry two years ago to be a stay at home mom and worked briefly with Keller Williams of Southern Arizona and as an independent consultant in property management. Lauren is a licensed Real Estate Broker with the State of Arizona.
Q: What do you hope to bring to the Tucson AMA office? I am bringing a unique perspective of how to navigate the AMA from my history of being a past regular member myself, and now my husband is getting started as an associate member. I think this
background knowledge of the member experience allows me to more clearly understand what they are looking for through our events and I will help them grow their businesses and support the industry. I am really excited to see Tucson growing, and the AMA anticipating that growth by focusing direct energies on Tucson. We have such wonderful committee volunteers who are very active, and we have many members who aren’t sure how or where to get involved. I have been talking with a lot of our new or less active Tucson members about what to expect at each event, who to reach out to and where their involvement fit best so they can balance time spent participating with the AMA and their daily job to result in a growth in their businesses.
Q: As a former director of a large multifamily portfolio and a real estate broker, what kinds of programs were helpful to you when working in the industry? What kinds of programs are you looking forward to developing/supporting?
Transforming the Multifamily Laundry Room Experience with Technology
You may not think of laundry as a high-tech industry, but at WASH we’ve invested millions in technology to transform the laundry room experience for our customers. The result is intelligent systems that enable: s 2EAL 4IME #ONNECTIVITY s 2EMOTE ,AUNDRY -ONITORING s 1UICK 3ERVICE s %ASY 0AYMENT
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BATES I am a strong supporter of education classes and opportunities in both the formal setting and in more casual networking situations. I always saw an impact from the AMA classes that my staff attended. It gave them renewed motivation to try something again and get tips from other attendees. The relationships that are built at networking events are so wonderful to lean on when you’re stuck on a problem or project- the associate members and regular member peers are the best “teachers” since they’ve usually faced similar obstacles and they have solutions through their products and services. I’d like to explore the feasibility of coalitions to allow more learning and networking opportunities within the submarkets in Tucson.
Q: You bring a strong background in the multifamily industry, what do you see ahead for the Tucson market? Tucson has a lot of new projects recently opened and underway, and many others who are/have gone through extensive renovations. This is really exciting for Tucson’s rental market as renters are taking notice and taking advantage of the newer features. We’ve also seen a resurgence of investors looking to purchase and partner on projects for renovations with the intention of getting a return on their investment through higher rents. Ultimately I think this will make Tucson’s product more modern and increase rental revenues.
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Apartment News is the official publication of the Arizona Multihousing Association, providing the latest News and updates on communities in...
Published on Aug 1, 2015
Apartment News is the official publication of the Arizona Multihousing Association, providing the latest News and updates on communities in...