Keep Good Marketing Records to Prove Compliance, Protect Against Liability

In the November 2017 issue of the Insider, we discussed the vacant unit rule and its requirement to make reasonable attempts to rent vacant units (see “Follow Five Dos & Don'ts to Comply with the Vacant Unit Rule).” Beyond showing compliance with the vacant unit rule, there are other important reasons to keep good records of your efforts to market your units to qualified low-income households. Here’s a rundown on five types of marketing records you should keep and the problems they’ll help you avoid.

1. Advertisements

Keep copies of all advertisements you place in newspapers, magazines, or industry publications. If you place ads for your units on the Internet, make sure you keep printouts of the ads and can identify the websites in which they appear.

Similarly, if you swap advertisements with local businesses, keep detailed records of your arrangements. For instance, say you arrange with a local pizzeria to post its ad in your clubhouse in return for taping your site’s flyer on its pizza boxes. As proof of your marketing efforts, keep copies of the flyer and a description of the agreement you made with the pizzeria.

How keeping records of this helps. Keeping copies of the ads you place helps show that you’re serious about attracting qualified residents to your site. If you don’t meet your low-income occupancy goals, you’ll want to convince the owner that it happened despite your diligence.

It’s especially important to keep copies of your ads after a low-income unit becomes vacant. Under the vacant unit rule, an owner can continue claiming credits for a vacant unit if it makes “reasonable efforts” to re-rent the unit, or the next available unit of comparable or smaller size at its site, to a qualified low-income household. If months pass after a unit becomes vacant and you can’t prove you’ve been making reasonable efforts, your state housing agency may report your site to the IRS for noncompliance.

2. Marketing to Population Groups You’ve Targeted

Keep a record of your efforts to promote your site to special population groups, such as Section 8 voucher and certificate holders or the elderly. In awarding credit allocations, state housing agencies sometimes require owners to set aside a certain number of units for these groups. If the owner of your site made this commitment, keep records detailing the places you visited (for instance, senior centers) and what you did (for instance, ordered lunch for everyone while promoting the site).

How keeping records of this helps. If, despite your efforts, you can’t rent enough units to members of a special population group to meet the set-aside, you’ll need to show you tried your best. Check your site’s regulatory agreement to find out what you must do if you can’t meet a special set-aside. Some regulatory agreements require you to keep units empty if you can’t find residents from a special population group to fill them. If that’s the case, you’ll need good marketing records to show your site’s owner that you tried to prevent the loss of rent revenue, but couldn’t. Other regulatory agreements require you just to do your best to find residents from a special population group. In this case, you don’t have to keep any units empty. But you must make sure you keep good marketing records to prove that you made diligent efforts to meet the special set-aside before letting other residents move in.

3. Promotional Offers

Keep a written record of the details of any promotional offers you use to attract qualified residents.

How keeping records of this helps. Keeping detailed written records of your promotional offers may help you defend yourself if a prospect or resident accuses you of discrimination. For instance, say you offer a move-in special for a limited time of $100 off the first month’s rent. If a woman applies a day after the offer ends and then accuses you of gender-based discrimination for not offering her the special, your written records will back you up.

4. Waiting and Rejection Lists

You probably keep a waiting list for your units. But it’s also important to keep a rejection list that explains why you turned prospects away.

How keeping records of this helps. Keeping waiting and rejection lists will help you show that you’ve been diligently marketing your units despite the fact that some of them may still be unoccupied. And your records will also help back you up against prospects’ discrimination claims. For instance, if you turn a prospect away because his income exceeded the tax credit limits, but he claims you rejected him because he’s Muslim, your records of whom you’ve rejected and why will make it easier for you to refute the claim.

5. Traffic Records

Keep traffic records listing any prospects that visit your leasing office and how they heard about or became interested in your tax credit site. Your traffic records should also detail the efforts you make to follow up with prospects who showed interest in your units.

How keeping records of this helps. Keeping thorough traffic records is an excellent technique for gauging how effective your different marketing efforts have been. For instance, if many prospects say they heard about your site because of your pizza box flyer, you know that the arrangement you made with the local pizzeria was a success. And detailing how you follow up with prospects adds more proof that you’ve been diligent in meeting your low-income occupancy goals and complying with the vacant unit rule.