What Documents to Keep to Protect Site in Legal Disputes

Sites generate a lot of records, such as leasing records, maintenance records, security deposit records, incident reports, and so on. Because these records take up space in leasing or management offices, most staff members want to get rid of them as soon as possible. But these records can help you if you ever need to defend yourself in a lawsuit. They can also help you to bring a lawsuit against someone—for example, a resident who leaves owing you money.

Every site needs to come up with a policy on what records must be kept and how long they must be kept, says Atlanta attorney Robert Hein. Such policies will vary from state to state, as record retention often depends on how long state law allows people to sue someone before the lawsuit is time-barred—that is, how long the statute of limitations is for a lawsuit.

To make sure your staff keeps records for the right amount of time, give them a memo instructing them on what to do. We’ve given you a Model Memo: Give Staff Memo on Keeping Records, which you can adapt and distribute to your staff. Check with your attorney about any state or local laws that may affect recordkeeping at your site before adapting our Model Memo for use.

What Records to Keep

The following is a list of records that should be kept in the leasing or management office and why they might be important in the future.

Availability logs. Availability logs are records of what units are available to rent on any given day. They can be effective in defeating a fair housing claim. For example, if a prospect says you refused to show him units because he’s disabled, a saved availability log might prove that on the day the prospect came in, the type of unit he was looking for wasn’t available.

Phone logs. Phone logs are records of all incoming phone calls to the leasing office and what transpired during them. These can also be effective in defeating a fair housing claim. For example, say a prospect accuses you of discrimination by dissuading him over the phone from coming to see the site. Your phone log might show that the prospect said he wasn’t interested in your site because, say, it didn’t have a swimming pool.

Guest cards. Most sites have leasing staff fill out a guest card for every prospect who comes into the office, regardless of whether the prospect leases a unit. Guest cards generally contain such information as the prospect’s name and contact numbers, the type of unit the prospect was looking for, and what, if anything, occurred while the prospect was at the site. Guest cards—particularly guest cards for prospects who decided not to lease at your site or whose applications were rejected—are important to keep.

For example, say a prospect said she couldn’t spend more than $500 for a unit and all of your units lease for much more than that. If you documented the prospect’s spending limit in the guest card and the prospect later claims that you refused to rent her a unit for a discriminatory reason, you can use the guest card to show that the reason you didn’t lease her a unit was that she couldn’t afford it.

Rejected or withdrawn applications and backup material. These records may also come in handy in a fair housing lawsuit. For example, if a prospect says you rejected his application because he has children, you can use the application and backup material, such as copies of pay stubs, to show that you rejected the application because, say, the prospect’s salary didn’t meet your site’s income criteria.

Former resident files. Former resident files contain many different records that can help you in lawsuits. A typical resident file contains the resident’s rental application, signed lease, copies of all correspondence to and from the resident, copies of any complaints made by or against the resident, and copies of maintenance requests or service reports, among other things. So these files can be used for any number of things, such as to show why you’ve kept all or a portion of a resident’s security deposit.

Incident reports. Incident reports made by staff members, police, security guards, fire departments, or other agencies about incidents that have occurred at the site can be useful in many ways. For example, say a resident who was assaulted in her unit sues you for having negligent security. An incident report, such as a police report, could let you off the hook if, for example, it says that the resident was assaulted by an ex-boyfriend whom she let into the unit.

Service request logs. Keeping a log of when and what types of service requests have been made can be helpful in defending against lawsuits. You can use the log to prove that you had no knowledge that a certain item inside a resident’s unit, such as a stair railing, was defective because no service requests were ever made about it.

Vendor files. It’s important that you keep vendor files, such as contracts and canceled checks. That way, if a vendor accuses you of, say, nonpayment, you can show canceled checks or paid invoices kept in your vendor file. Or if a vendor doesn’t perform work properly, you can pull out the contract to show it what the job required.

Employment records. Employment records are important to keep for several reasons. For example, an employee may sue for wrongful discharge. The employee’s file, if filled with records of disciplinary actions taken against the employee, could prove that the employee was discharged for cause.

Employee injury reports. Most employee injury reports are now governed by Occupational Safety and Health Administration (OSHA) recordkeeping requirements. If your site has more than 10 employees, the site must record work-related injuries and illnesses using OSHA Forms 300, 300A, and 301.

How Long to Keep Records

Every site should come up with a record retention policy that tells staff how long to keep records and what to do when it’s time to dispose of the records, says Hein. How long you keep records will generally depend on your state’s statutes of limitations for different types of legal actions, and on the types of disputes, claims, or lawsuits that sites are typically involved in, explains Hein. The following are some guidelines to follow:

Records to keep for three years. Some records, such as guest cards, rejected applications, and availability logs, are usually used to defend against fair housing lawsuits or claims. For the most part, fair housing claims are filed as administrative complaints with HUD. These complaints must be filed within one year of the alleged incident. Fair housing complaints that are filed in federal court and most state courts must be filed within two years of the incident. So to be on the safe side, Hein recommends keeping guest cards, rejected applications, and availability logs for three years from the time the records were created.

Hein also recommends keeping resident files that are closed with no collection matters or security deposit disputes pending for three years from the time the resident moves out. Hein says to keep these records for three years in case the need arises to respond to potential claims after a resident has left, such as a claim that a lease was wrongfully terminated.

Other records that you should keep for at least three years are employment records, says Hein. The statute of limitations for many laws governing labor disputes, such as the Fair Labor Standards Act, and for workers’ compensation is usually two years, says Hein. So keeping these records for three years is a safe way to hedge your bets. Hein recommends keeping the following records for three years:

• Guest cards;
• Availability logs;
• Telephone logs;
• Rejected applications and backup material;
• Resident files with no pending security deposit disputes or collection issues; and
• Employment records.

Records to keep for five years. You can use records such as incident reports or service request logs to defend against personal injury or property damage lawsuits. In most states, a lawsuit for a personal injury must be filed within three years of when the incident occurred. But the statute of limitations for a lawsuit involving lost or damaged property is four years in some states. So the best rule of thumb is to keep incident reports and service requests logs for five years after the incident occurred or after the service request was made.

For OSHA records, you must save the OSHA 300 Log and the OSHA 301 Incident Report forms for five years following the end of the calendar year that these records cover.

Records to keep for seven years. Records that can lead to claims of a contractual nature, such as vendor records, and resident files involved in either security deposit or collection disputes need to be kept the longest, says Hein. That’s because most states give someone six years within which to file a contract-related lawsuit. To make sure that you have the records you need in case you want to file a contract-related lawsuit or are forced to defend against this kind of lawsuit, Hein recommends keeping the following records for seven years after the goods or services were purchased or after the resident with a collection matter or security deposit dispute moves out:

• Vendor records; and
• Resident files with security deposit disputes or collection matters pending.

Inform Staff of Policy

To ensure that your staff keeps the records you need for the right amount of time, give them a memo outlining your record retention policy. Your memo, like our Model Memo, should tell your staff what records to keep and how long to keep them. Since each state may have different statutes of limitations for certain kinds of legal actions, check with your attorney before you set your policy on how long to keep records.

Further reading: For more information about how good recordkeeping can help you prevent and defend against fair housing claims, see “How and Why to Keep Good Records,” in the Summer Special Issue of the Insider’s sister publication, FairHousingCoach.com. This issue also features a Model Nondiscrimination Policy, which you can adapt and use at your site.

Insider Source

Robert Hein, Esq.: Fowler, Hein, Cheatwood & Williams, PA, 2970 Clairmont Rd., Ste. 220, Atlanta, GA 30329; www.apartmentlaw.com.