HUD Issues Guidance on Use of Criminal History in Resident Screening

7 Home Design Trends That Will Appeal to Today’s Buyers
May 25, 2016
Assoctiation Budgets and Boards of Directors
May 25, 2016

HUD Issues Guidance on Use of Criminal History in Resident Screening

The Fair Housing Act (FHA) prohibits discrimination in housing-related activities, such as rental decisions by landlords, on the basis of race, color, religion, sex, disability, familial status or national origin. In June, 2015, the Supreme Court officially recognized disparate impact as a method for bringing a lawsuit under the Fair Housing Act. Disparate impact may occur when policies, though not explicitly discriminatory, result in statistical disparities between different races resulting in a negative discriminatory effect – even if unintended.

In April, 2016, HUD issued “Guidance” on how the Fair Housing Act applies to the use of criminal reports by landlords in their rental decisions, specifically as part of the screening process. In this Guidance, HUD notes that racial disparities in incarceration rates will result in certain races being denied housing more often than other races because of screening policies. Although rental applicants with criminal records are not generally protected under the FHA, a landlord can still violate the Act if their use of criminal histories in denying rental applications disproportionately burdens renters of a protected class over another. The HUD Guidance requires housing providers to support their uses of background screening with “substantial, legitimate, nondiscriminatory interests” such as the safety of residents, employees and property. This Guidance should/will change the policies of housing providers that currently automatically exclude any applicants with any prior arrests/convictions or that have policies that are unwritten, inconsistently applied, or not thought out and justifiable.

The best recommended practice is to carefully consider what types of offenses pose the greatest threat to the interest of a housing provider; for example, convictions for violent offenses against people or property. Because arrest records do not constitute proof of unlawful conduct or proven threat, the fact that a person has previously been arrested is not considered to be a reliable basis upon which to assess the potential risk to tenant safety or property posed by an individual. Screening policies must distinguish between criminal conduct that indicates a demonstrable risk to tenant safety and/or property and criminal conduct that does not. In conducting criminal background screening, the most concerning types of convictions should be given greater weight and should be looked at farther back in the applicant’s record than offenses that pose a lesser concern or risk. For example, convictions for public intoxication, minor marijuana possession or tax fraud would not be given the same weight in the decision process as robbery, arson, fraud or possession and manufacturing of drugs with intent to sell. Facts or circumstances surrounding an applicant’s conviction, age of the applicant at the time of the criminal conduct, evidence that the applicant has maintained a good rental history before and/or after the conviction, as well as any evidence of the applicant’s rehabilitation efforts are also factors to be considered. Criminal history information must also be considered uniformly in the screening process.

Compliance with the Act as interpreted in the HUD Guidelines will impose a burden on some landlords. However, for housing providers that already consistently implement a criminal screening policy which fairly weighs and reflects legitimate concerns posed by particular types of offenses, the new HUD Guidance does not change a lot. It should also be noted that the HUD Guidance is just that – guidance. It does not carry the force of law like formal agency rules and a court is not bound to accept its conclusions.

This article is provided for informational purposes only. Henderson Properties is not an attorney or government affiliate and makes no claims as such. For legal matters, consult an attorney.