Need to Know!

Tenant Screening & Criminal Records – The Bottom Line

April 12, 2016 1:53 pm

The Department of Housing and Urban Development (HUD) is charged with enforcement of Title VIII of the Civil Rights Act of 1968, as amended by the Fair Housing Act (Act).  HUD has long held that the Act prohibits practices that have an unjustified discriminatory effect (or more commonly, a disparate impact) on protected individuals, regardless of intent.  See previous post – HUD Discriminatory Effects Standard & Tenant Screening.

HUD’s Office of General Counsel recently updated their “Guidance” on the topic – creating quite a stir in the process.  The language used is more aggressive than we’ve seen and may or may not stand the test of time.

The Guidance asserts, correctly in our view, that use of criminal records for tenant screening purposes has a disparate impact on certain protected groups (based on race and national origin) and that doing so may form the basis of a Fair Housing Act (FHA) claim.

We’ve written and spoken on this topic for years.  HUD’s original guidance, published in 2013, said exactly the same thing.  The Supreme Court weighed in – affirming HUD’s discriminatory effects standard and three part burden shifting test.

Bottom line? Nothing changed – except perhaps HUD’s enthusiasm for disparate impact-based fair housing claims!  So rather than burning a lot of cycle time debating the merits of the Guidance, let’s cut through the ambiguity inherent in this debate and remind ourselves of  1) what not to do; and 2) current best practices.   Radical, I know!

High-risk Behavior

Let’s start with practices that will put a target on our back and that are difficult to defend. There are (according to HUD) a couple practices that are indefensible.  They are:

  1. Use of records of arrest (versus convictions).  Don’t do it!!
  2. Blanket policies that deny tenancy for any and all criminal convictions – regardless of the nature of the offense or when it occurred.  Bad idea!  Has been for years!!

Managing Risk

Many (likely most) property managers have long since adopted policies to mitigate the risk such claims, including:

  1. Creating (and limiting consideration to) a list of specific offenses –  serious crimes against persons or property – that given rates of recidivism represent a real threat to the community (including the landlord!);
  2. Considering criminal convictions and pending cases ONLY (largely ignoring records of arrest); and
  3. Limiting consideration to those offenses, the dates of final disposition of which, antedate the report by no more than seven years – recognizing that the odds that an individual will reoffend after that seven year period is quite low.

Thoroughness, Accuracy & Customer Service

Thoroughness and accuracy are critical.  They play an important role in this debate – since a failure to include (and adequately screen) AKA’s and additional addresses virtually guarantees missed records.

Make sure that your reports include record matching – that your tenant screening company does the work necessary to confirm that records returned are correctly associated with your applicant.  Missing a record is bad enough. Taking adverse action based on flawed data is potentially much worse.  Quality matters!!

We have a choice.  We can be intimidated by the threatening tone of the recent Guidance.  We can throttle back in our use of criminal records data for tenant screening purposes.  Or… we can apply our best judgment and “best practices” to mitigate what for most of us will be a relatively modest risk.

Visit Moco Incorporated or for more information regarding this and similar topics.


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