Using Criminal History to Screen Prospective Tenants

Using Criminal History to Screen Prospective Tenants

By Grant Keating and Josh Strickland

Originally Published in NOAA’s Suites Magazine June 2019

On April 4, 2016, the Department of Housing and Urban Development (HUD) issued new guidelines on the use of criminal records in evaluating a prospective tenant for an apartment. 

That action titled “Office of General Counsel Guidance on Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate-Related Transactions” can be found online at OGCGUIDAPPFHASTANDCR.PDF 

The Fair Housing Act & Criminal History

The Fair Housing Act (FHA) prohibits discrimination in the sale, rental, or financing of dwellings and in other housing-related activities on the basis of race, color, religion, sex, disability, familial status or national origin. 

It is not in and of itself illegal under the FHA to reject leasing applicants who have criminal records, but a blanket rejection of applicants based on criminal history may constitute a violation of the FHA if, without any justification, persons of any one race, color or national origin are rejected more frequently as a result of such policies. 

In other words, a policy that has a “discriminatory effect” may violate the FHA, even if it was unintentional. 

Intentional Treatment Discrimination

Intentional conduct, like treating applicants with similar or comparable criminal histories differently because of their race, color, national origin or other protected characteristics, also remains a violation of the FHA. 

For example, rejecting an African-American applicant having a criminal record while approving a white applicant having a comparable criminal record is what is referred to as “intentional discrimination” discrimination. 

Disparate Treatment Discrimination

“Disparate treatment” discrimination results when a policy that appears to be neutral on its face, (like not renting to convicted felons), has a disproportionate impact on members of a protected class as applied. 

Intentional and disparate treatment discrimination are both prohibited by the FHA. 

The Implications of the Updated Guidelines

So what is new and what is not? 

The legal principles on which the guidelines are based are not new and have been in place for many years. 

However, the update to the guidelines suggests a renewed focus on this issue and the possibility of increased enforcement actions. 

Criminal History Can Create an Unintentional Discriminatory Effect

Somewhere between 70 and 100 million U.S. adults, roughly one-third of the population, have some sort of criminal record. 

African-Americans and Hispanics are arrested, convicted, and incarcerated at higher rates than other population groups. 

Due to these facts, HUD has found that refusals to lease apartments based on criminal records constitute a barrier that has a disproportionate impact on minorities. 

In light of the well-documented inequities in the criminal justice system for persons of color, a policy that automatically rejects all housing applicants based on criminal history poses a real risk of creating an unintentional discriminatory effect. 

A landlord can violate the FHA if their seemingly neutral policies or practices have a discriminatory effect, even if the landlord did not actually have an intent to discriminate. 

Drug Offenses Are The One Exception

The one exception is that landlords may continue to automatically reject leasing applicants who have been convicted of the manufacture or distribution (but not simply possession) of illegal drugs, as this conduct is specifically excepted from the FHA discrimination statutes. 

Practically, What Should Landlords do?

So what is a landlord to do in this environment? 

– Case-by-Case Reviews

As an initial matter, blanket policies that automatically reject prospective tenants with a felony conviction (other than drug offenses as discussed above) should be avoided. 

Instead, those policies should be replaced with a policy that reviews individual criminal histories on a case-by-case basis. 

– Give the Applicant a Chance to Explain

Landlords should provide an applicant a chance to explain any offense and consider those explanations as part of their determination, including taking into account how long ago the conviction occurred, what it was for, and any evidence of rehabilitation. 

– Remain Mindful and Avoid Biases

A landlord must also remain mindful to avoid treating individuals with the same or similar criminal background differently based on sex, race, color or national origin, even if they had no discriminatory intent. 

As the process can be time-consuming, you may want to wait to the end of the application process to evaluate an applicant’s criminal history.

– Run FRCA-Compliant Background Checks

Lastly, when running background checks on applicants, a landlord must also comply with the Fair Credit Reporting Act (FRCA). 

The FCRA generally requires a person obtaining background information to: 

  1. have a legitimate purpose to seek that information, 
  2. only use that information in furtherance of that legitimate purpose, and 
  3. requires consent and notice from the person whose background is being checked.

Leasing is specifically recognized as a legitimate purpose for performing background checks under the FCRA, but rental applications should contain provisions notifying applicants that you intend to run a background check as part of the application process and that the applicant expressly consents to your authority to do so. 

Get Expert Professional Legal Assistance

The expert attorneys at Dworken & Bernstein can assist landlords in navigating this policy minefield and defend against any actions brought by HUD, the Ohio Civil Rights Commission or other agencies. 

If you enjoyed this article, or if there is a particular legal topic of interest that you would like to be featured in the next edition of Suites, please reach out to Grant or Josh by calling 440-946-7656.

The information presented in this post is not legal advice and does not form a lawyer/client relationship. Laws and circumstances can differ and change.
Please contact us for a personal review of your situation


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