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HUD guidelines: When can a landlord consider criminal history?

By: Victoria Edwards on in

Landlords often inquire whether considering a potential tenant’s criminal history is legal.

The guidelines on the use of criminal records by landlords issued by the Department of Housing and Urban Development clarify that rejecting an applicant because of one or more prior arrests without any conviction is a per se violation of the Fair Housing Act. The guidance cites the Supreme Court which recognized, “[t]he mere fact that a man has been arrested has very little, if any, probative value in showing that he has engaged in any misconduct. An arrest shows nothing more than that someone probably suspected the person apprehended of an offense.” This guidance makes clear that excluding a potential tenant on the basis of an arrest is unlawful as the landlord cannot prove that the exclusion of a tenant on that basis actually assists in protecting resident safety or property.

The next question is whether a landlord can exclude a potential tenant on the basis of a prior criminal conviction. The guidelines state that landlords who exclude potential tenants on the basis of prior criminal convictions must be able to show that this policy of exclusion “is necessary to achieve a substantial, legitimate, nondiscriminatory interest.” The guidelines then make clear that a blanket policy that excludes all tenants with a prior conviction violates the Fair Housing Act. The guidelines suggest that a more tailored policy, one which takes into account the nature of the offense, the severity of the offense and when the offense took place, is more likely to serve a “substantial, legitimate, nondiscriminatory interest.” However, this is not the end of the inquiry. Once the landlord proves that there is a legitimate nondiscriminatory interest served by the policy, the prospective tenant or HUD may prove that the interest could be served by another practice that has a less discriminatory impact. The guidelines suggest that the applicant’s financial qualifications should be considered first to rule out potential applicants on that basis before a criminal record search is undertaken.

HUD guidance suggests that the landlord conduct an “individualized assessment” of each applicant that considers the facts or circumstances surrounding the criminal conduct, the age of the individual at the time the conduct occurred, evidence that the individual has maintained a good tenant history before and after the conviction, and evidence of rehabilitation.

Most importantly, the policy must be implemented in such a way that the policy is carried out on all applicants equally and uniformly. Exceptions to the policy cannot be made based on race. For instance, if an African American applicant is rejected due to an aggravated assault that occurred 10 years ago, a non-Hispanic white applicant with a comparable criminal record must be similarly denied.

Using criminal history as a basis for denying a rental application is heavily scrutinized by HUD. The hoops that the property manager must go through to show that the policy is nondiscriminatory may not justify the policy. If a landlord does implement a rental policy that takes into consideration criminal history, the goal of that policy should be the safety of their tenants and property. There is a big difference between a conviction for aggravated assault or murder and a conviction for vehicular manslaughter or DUI where the intent is less nefarious (choosing to drive while impaired versus intending to assault or kill). The landlord’s policy should be designed to take into consideration these differences.

Interestingly, cities have recently started enacting ordinances that prohibit landlords from screening tenants based on their criminal records. In August of 2017, Seattle, Washington, passed an ordinance that barred excluding people with criminal records in advertisements and barred landlords from asking prospective tenants about criminal records or rejecting tenants based on a criminal record. While we are not aware of any municipalities in Pennsylvania that have passed similar ordinances to date, it is clear that the litmus test of using a criminal conviction to deny housing is no longer viable. Property managers have to consider the issue if they have not already done so and come up with reasonable policies that protect their owner clients as well as the prospective tenants who seek counsel.

Attorney James L. Goldsmith contributed to this article.

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Comments (4)

Comments

  • John Collins   August 25, 2017 at 8:24 am

    Thank you. I would bet that this is not common knowledge.

    Reply to John Collins
  • Glenn Lehman   August 26, 2017 at 8:50 am

    At Lehman Property Management we reviewed a detailed list of crimes and determined which were never acceptable (Offenses against animals, children, arson, etc) , offenses that are time based (Drug convictions, DUI, theft, check fraud, child support), and offense that are okay any time (Misdemeanor, Traffic, etc) and compare the records to what is disclosed. Lying about your criminal past is always disqualifying. We developed 4 grids of choices and allow property owners to select the appropriate criteria. We developed this process 7 years ago, we review and update this every year.

    To be clear conviction – not charges are what we consider.

    As an aside, one of the reasons people should consider professional management is to protect themselves from the liability associated with making the wrong decision in this area.

    Reply to Glenn Lehman
  • Brett Woodburn   September 4, 2017 at 12:46 pm

    Glenn, under the official Guidance, that may not be sufficient to avoid liability for disparate impact. I wrote an article that was published here a couple of years ago. If it is not still available in the archives, let me know off-line.

    Reply to Brett Woodburn
    • Glenn Lehman   September 5, 2017 at 5:23 am

      Of course that may not be in line with the guidelines, from meetings held with housing they are not even sure what they mean. The only way to have zero risk is to approve everyone with a conviction, which we are not willing to do. Thanks for the offer of an article from a few years ago, this issue though changes way to fast.

      IT is a good reason for a REALTOR who dabbles in property management to refer the business to a specialist or ensuring they stay current with the law. Even those who just do listing for rent.

      Reply to Glenn Lehman

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