REINCheck

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VO [00:00:06] You're listening to REINCheck with Andrea Rice, Contracts and Industry Specialist at REIN, where you get the latest member news and information delivered straight from the source, REIN MLS.

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Andrea Rice [00:00:19] Hello and welcome to REINCheck, I'm your host, Andrea Rice, and today we are checking in with Brandon Allred and Al Patel to discuss Source of Funds. We'll be learning a little bit more about what is meant by a Source of funds under the Virginia law and also tackle a new required field for Source of Funds exempt on the rental data input sheet. Brandon is an attorney with Kaufman and Canoles and serves as REIN Property Managers' Advisory Committee legal counsel, and Al is REIN's Property Managers Advisory Committee past Chair and current Co-Chair. Brandon and Al, thank you so much for joining us today to talk about Source of funds.

Al Patel [00:00:58] Glad to be here.

Brandon Allred [00:01:00] Thanks for having us.

Andrea Rice [00:01:02] And those of you tuning in are probably pretty familiar with Brandon and Al. They've helped us out several times in the past with symposiums and training videos. And Al was even a part of our first Facebook Live event. So, thank you guys for always lending your time and expertise. So, before we get into the new check box on the rental input form, Brandon, can you just go into a little bit about what is meant by Source of Funds under Virginia law?

Brandon Allred [00:01:34] Absolutely. I'm happy to do that. So, Source of Funds really came out of the update to the Virginia Fair Housing Law that passed and became effective on July 1st of this year. And the update to the Fair Housing Law added a new category, a new protected class. And that protected class is Source of Funds. And Source of Funds really means income. Income from whatever source derived in the context of fair housing use to pay for housing costs, in this case, rent. So, the concept is really that you can't treat somebody differently based on the manner in which they earn their income, unless, of course, the manner in which they earn their income is illegal. And in that case, you can treat them differently. You don't have to rent to somebody who earns their income from some sort of illegal activity.

Andrea Rice [00:02:42] Right.

Brandon Allred [00:02:42] Most often you see this in the form of Section Eight housing vouchers as a legal source of income. In general, you can't discriminate against somebody., can't refuse to rent to them because their income, their wherewithal to pay comes from Section Eight housing voucher. But this comes up in other contexts, too. You can't discriminate against somebody because their income comes from Social Security, veterans benefits and the list goes on. There are a couple of exemptions, but I think we'll get into those a little bit later.

Andrea Rice [00:03:18] OK, yeah, I think that is really helpful because I know when that became Source of Funds became a protected class there was all this confusion about really what is Source of Funds? What does that mean under the code? So thank you. I think that clears things up for a lot of people on what exactly Source of Funds is. So now that we have that background on Source of Funds, let's dive into a little bit this new required field on the rental input sheet. So as of January fourth, there is a new required field on the rental data input sheet and it is Source of Funds exempt, yes or no. So if someone is inputting a rental listing, they do have to make a selection before they can upload their rental listing. So, Al, could you please tell us when would someone select yes and when would someone select no.

Al Patel [00:04:19] Ok, well, as Brandon mentioned, there are certain exemptions which we'll discuss in a later podcast video. So, there are exemption. If the property or is exempt from accepting Source of Funds, then that's when you will check yes. If the property is not exempt, obviously, you just check no. So, it's in a way, it's a pretty straightforward field. Yes or no, just whether the property is exempt from accepting Section Eight or, you know, Social Security or any other kind of social fund that Brandon mentioned.

Andrea Rice [00:05:04] OK, and Brandon, could you give just an example about what would make a property exempt?

Brandon Allred [00:05:11] Sure, so the exemption is really based off of the number of rental properties that a landlord owns in the Commonwealth of Virginia and the way the legislature wrote the code of the update to the Fair Housing Law. If you own four or fewer rental properties in Virginia, you can opt-out of the Source of Funds requirement. So you can treat people differently based on their Source of Funds. In other words, you do not have to accept housing vouchers, but that exemption only applies to you if you own four or fewer rental units in Virginia.

Andrea Rice [00:06:02] OK, so and this when you check that, yes, you are this listing a Source of Funds exempt then that's going to be an indicator to those looking at the listing in the MLS that, oh ok, they are they do or do not have to accept all Sources of Funds, correct?

Al Patel [00:06:21] Correct. And in most, as Brandon said, you know, if you're if you know for sure your landlord owns less than four or fewer properties, then they could be exempt.

Andrea Rice [00:06:36] OK, and because this is a required field and you do have to select either yes or no, I'm just curious, would there ever a time when an agent is inputting a rental listing where they wouldn't know at that time whether the property was exempt? Or could it ever be undetermined for any reason?

Al Patel [00:06:58] I wouldn't think so, because, as Brandon mentioned, you know, it does fall under the ownership. So that conversation the agent would need to have with the property owner, say, do you own more than four, four properties in the Commonwealth.

Andrea Rice [00:07:22] Ok.

Al Patel [00:07:22] So I can't imagine I know I don't know, Brandon, you can, but I can't imagine a time where you would not know based on having a conversation with a property owner.

Brandon Allred [00:07:34] Yeah, I think that's right, and I think the other thing to keep in mind about this field is that at some level it's really an educational tool that you can use in working with your landlords and your clients because Source of Funds is new. It just came out in July. So, I think there is still an educational component that brokers and listing agents will have to go through with their clients. So, this is really designed to help prompt that discussion if you haven't had it already.

Andrea Rice [00:08:14] OK, great. And I think it's important to always point out that if you're unsure of what a field means or how to do the field or how to fill out something on a form to always check with your broker. They're going to be able to direct you and what you need to do. So, if you have any questions, I would on how to tackle this new required field or how to navigate Source of Funds, always check with your broker. They'll be able to direct you. Before we sign off, do you guys have anything else that you think is important to add about either Source of Funds or this new required field?

Al Patel [00:09:00] I think we've pretty much covered everything. Pretty straightforward.

Andrea Rice [00:09:06] OK, and for those of you listening, if you enjoyed today's discussion on Source of Funds, you will want to be sure to check out our next episode where Brandon and Al will be back to discuss declaration the new Declaration of Ownership Interest Addendum. So, this will talk more about Source of Funds exemption and the new form that was created to ensure agent's compliance with Virginia Fair Housing Law. Between now and then, if you have any suggestions for our Property Managers Advisory Committee you can submit them to PMAC@reininc.com and I will make sure that you are your suggestions gets on an upcoming meeting agenda. Brandon, Al, again, thank you and thank you for everyone tuning in, and have a great rest of your day.

Brandon Allred [00:09:56] Thank you.

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VO [00:09:58] You've been listening to REINCheck with Andrea Rice. Stay in the know from those who know. Delivered straight from the source, REIN MLS.

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