Property Management, Tenant Selection, Real Estate News & Tips

Fair Housing Update – Illegal Use of Criminal Records For Tenant Screening

By on April 7, 2016 in Education, News with 0 Comments

Criminal Records Tenant ScreeningNew guidance has been issued by the U.S. Department of Housing and Urban Development (HUD) to explain legal use of evaluating criminal history when performing tenant screening for your rental properties. In clarifying what constitutes discriminatory behavior when reviewing a rental applicant’s criminal background, landlords and property managers may find they need to revisit their tenant screening criteria.

HUD enforces policies outlined in the Fair Housing Act which prohibits housing discrimination on the basis of race, color, religion, sex, disability, familial status or national origin. HUD recently examined how housing providers were using criminal history for rental applicants and wants to prevent discriminatory effects and disparate treatment that lead to adverse housing action.  In other words, housing providers were seen to unfairly screen certain types of criminals or types of crimes and even deny housing to applicants based on arrest records but not convictions – and HUD created new policies to prevent this type of behavior.

In order to protect the 100 million U.S. adults that have a criminal record of some sort, HUD issued the Guidance on Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate-Related Transactions on April 4, 2016.

HUD explains how criminal history can be used in a discriminatory way be housing providers, whether intentionally or unintentionally:

While having a criminal record is not a protected characteristic under the Fair Housing Act, criminal history-based restrictions on housing opportunities violate the Act if, without justification, their burden falls more often on renters or other housing market participants of one race or national origin over another (i.e., discriminatory effects liability). 9 Additionally, intentional discrimination in violation of the Act occurs if a housing provider treats individuals with comparable criminal history differently because of their race, national origin or other protected characteristic (i.e., disparate treatment liability).  (Section III).

HUD is now limiting the use of arrest records for tenant screening for housing providers. The guidance goes on to explain that arrest records can be incomplete and do not actually indicate any criminal activity has occurred unless a conviction has been made.

To prevent any discriminatory behavior, housing providers must create explicit screening criteria that denotes what type of criminal convictions will result in denied housing.  Additionally, housing providers will need to demonstrate that deniable criminal convictions would put their residents and/or property at risk.  

To do this, a housing provider must show that its policy accurately distinguishes between criminal conduct that indicates a demonstrable risk to resident safety and/or property and criminal conduct that does not.

What HUD’s new Guidance means for housing providers:

  1. Arrests records are not a valid reason to deny a rental applicant housing.
  2. Convicted criminals may be denied housing if the reason for their convictions clearly demonstrates that the safety of your residents and/or property are at risk.
  3. Blanket terms in your screening criteria that say “Any criminal convictions will be denied” are now considered discriminatory and in violation of the Fair Housing Act.

The new Guidance does not make criminals a protected class, but rather establishes requirements to clearly prove why you are denying an applicant based on a criminal conviction.

Remember that a housing provider violates the Fair Housing Act when the provider’s policy or practice has an unjustified discriminatory effect, even when the provider had no intent to discriminate

Ryan Green with Apply Connect offers great advice for landlords and property managers on how to manage these new policies from HUD by following these simple steps:

  1. Review your policy to make sure the language is clear, and conforms to the HUD guidelines (and have your housing specialist attorney read it over).
  2. Educate your staff, or anyone involved in reviewing background checks, so they are aware of the new guidance.
  3. Consider contacting your tenant screening provider to ask about their ability to restrict  records that cannot be used in the decision.

If you use integrated tenant screening services in your property management software, make sure the reports provided comply with these new policies. Rentec Direct has already taken the steps to filter our criminal background checks to exclude arrest records in order to mitigate our clients from Fair Housing enforcement and civil litigation.  

Not yet a Rentec Direct user, learn more about how easy it is to start screening your tenants today by watching this short video on tenant screening.

The complete Guidance on the Use of Criminal Records by Housing Providers from the U.S. Department of Housing and Urban Development can be found here.

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About the Author

About the Author: Kaycee manages marketing and media relations for Rentec Direct, bringing a unique perspective to the world of property management and proudly shares industry news, products, and trends within the community. .

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