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2007-12-14 17:53:00

Rental Property Owners Prevail in Tenant Screening Lawsuit

In a stunning victory, the Fourth District Court of Appeals agreed with residential landlords subject to a class action lawsuit and a tenant screening company subject to a separate action, that the Consumer Credit Reporting Agencies Act (ICRAA) was unconstitutionally vague. The ICRAA was enacted to require third party investigators to give notice to consumers when investigating a consumer's character, general reputation, personal characteristics, or mode of living. The plaintiff claimed that landlords and tenant screening companies who research court records to determine if an applicant was subject to a previous unlawful detainer were subject to the notice requirements under the ICRAA. The Court of Appeals disagreed. The court ruled: "Unlawful detainer information defies categorization." The court reasoned that there can be many different grounds for an eviction, sometimes based upon non-payment of rent and sometimes based upon bad behavior. The court concluded that to require all unlawful detainer actions to be subject to the ICRAA ". . . fails to provide adequate notice to persons who compile or request tenant screening reports that may contain unlawful detainer information." The two cases are Ortiz v. Lyon Management, Group, Inc., and Trujillo v. First American Registry, Inc. Both cases were certified for publication meaning that they are the law in the Fourth District Court of Appeals which covers Orange, San Diego, Imperial, Inyo, Riverside and San Bernardino Counties. It is persuasive law in the remainder of California.

(Kimball, Tirey & St. John LLP represented some of the defendants in the Ortiz case cited above. For more information, please contact Jeff Garland at 800-338-6039.)

(This legal alert is for general information purposes only. Before acting be sure to receive legal advice from our office. If you have any questions about this alert, please contact the nearest KTS office in your location. For past alerts and articles on other related topics, please consult the resource library section of this web site.)

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