Need to Know!

Tenant Screening – Importance of Access to Eviction Records

May 29, 2015 9:17 pm

Many in the low income housing advocate community have pushed for legislation to limit access to eviction filings and dismissed case for tenant screening purposes. They argue that the practice is at best unfair and at worst, prejudicial – that many are dismissed due to lack of merit.  That has not been our experience.

There is very little that is certain these days.  But one thing we can  count on is self-interest.  Filing merit-less eviction actions is absolutely contrary to the interest of the landlord.  Consider that:

  • Evictions are time consuming! $$
  • Evictions negatively impact occupancy (rents)! $$$
  • Evictions are expensive – given legal fees and court costs!  $$$$

In fact, pursuing unlawful detainer actions to a decision is so expensive in time and treasure, that the majority of those filed are dismissed by the landlord when the resident pays or moves out.

The risk of an occasional eviction is a fact of life for landlords – a risk of doing business.  We manage that risk by thoroughly screening prospective residents – including, of course, a comprehensive eviction search.

Access to the Public Record 

Washington is an “open records” state.  The right to access the public record is written into the constitution. Access to eviction records (including filings, dismissed cases and judgments) is essential to the tenant screening process.

Efforts to pass legislation limiting access to the public record in the State of Washington have thus far failed .  Efforts to limit the content of tenant screening reports (consumer reports as defined by the FCRA) have failed as well, and are likely “preempted” by Section 625 of the Fair Credit Reporting Act (FCRA) – “Relation to state laws”.

Efforts to limit access to eviction records nationally have enjoyed some success, however, so it is important for the rental housing industry to remain engaged legislatively.

Admiring the Problem

All that said, there are occasions when residents prevail or may have prevailed but are denied tenancy due to the existence of a filing – which is unfair.  The Washington State Supreme Court acknowledged as much in a recent appeal, while at the same time affirming the open records provision of the state constitution. See Hundtofte v Encarnacion.

Another issue is the disparate impact legal theory.  Under this theory, a facially neutral business practice that has a disproportionate impact on protected groups can form the basis of a Title VIII (fair housing) claim.

There is little doubt that use of court records (including eviction records) has a disproportionate impact on some protected groups.  Once a plaintiff proves that a practice has a disproportionate impact on a protected group – of which they are a part –  the burden shifts to the landlord who must prove that the practice is a “business necessity”, and there is no (less discriminatory) alternative.

Finally, denying tenancy based solely on the existence of an eviction filing or dismissed case does not set right with many – who take to heart the notion that we are “innocent until proven guilty”.

So… there is a problem worthy of a solution.   The problem is that advocates are pushing for limits on access to eviction records – access that is essential to the tenant screening process.  Relying exclusively on the presence of an eviction filing – without knowledge of the reasons behind the filing, increases the risk of a fair housing claim and is unfair.   The question is, what do we do about it?

The Solution

There is an alternative to denying tenancy based on the existence of an eviction filing or dismissed case – a strategy that reduces the risk of a disparate impact claim, addresses the fairness issue and provides better information to the landlord.

The alternative is for the tenant screening company to comply with Section 607 of the FCRA, which states in part that “…Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.”

The solution is for the tenant screening company to contact the landlord (or landlord’s attorney) – disclosed or undisclosed by the applicant – to determine what it is the applicant did or failed to do in violation of the rental agreement – and for the landlord to base their decision on that.

Conclusion

Judgments in favor of the landlord – occurring within the last seven years –  are both reportable and actionable.  Filings (including dismissed cases) are actionable as well – to the extent we can identify the reasons behind those actions.

Finally, the more complete and accurate the information, the better the decision.  The better the decision, the better the bottom line!

Visit Moco Incorporated or MyScreeningReport.com® for more information about tenant screening best practices.

 

 

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