DOJ Warns Landlords About Conducting Criminal Background Checks on Would-Be Renters

1( –  As President Obama commutes the sentences of more and more prisoners, his Justice Department intends to make it harder for landlords to deny affordable housing to ex-convicts.

The Justice Department announced on Tuesday that it is involving itself in a legal case in New York brought by a group that  helps “formerly incarcerated individuals” find housing.

The group complained that a 917-unit complex in Far Rockaway, Queens (N.Y.) had a policy of refusing to rent to individuals with prior convictions for felonies or misdemeanors other than traffic offenses. The plaintiff argues that this policy has an unjustified disparate impact against prospective African-American and Hispanic tenants, in violation of the Fair Housing Act.

Although the Fair Housing Act does not forbid housing providers from considering applicants’ criminal records, the DOJ says “categorical prohibitions that do not consider when the conviction occurred, what the underlying conduct entailed, or what the convicted person has done since then run a substantial risk of having a disparate impact based on race or national origin.”

In other words, if landlords have policies banning ex-convicts in general, they could be in trouble if too many of those ex-cons happen to be black or ethnic minorities. It’s called “disparate impact.”

“This filing demonstrates the Justice Department’s steadfast commitment to removing discriminatory barriers that prevent formerly incarcerated individuals from restarting their lives,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division.

“Women and men who served their time and paid their debt to society need a place to live, yet unlawful housing policies can too often prevent successful reentry to their communities. While not all criminal records policies adopted by landlords violate the Fair Housing Act, we will take action when they do.”


How to avoid common mistakes of first-time landlords.

For Rent ImageFirst-time home buyers are a declining group. Historically, 40 percent of home buyers have been first-time buyers. However, that number continues to shrink, even if the true home ownership rate among millennials climbed ever so slightly last year. If you’re already a homeowner, your wheels might be spinning right about now, if people aren’t buying starter homes, then the rental market has to be booming. Right? It is in many areas, particularly where unemployment is low, the population is high, and homes aren’t overpriced. You might think you’re ready to become a landlord, but learning how to be one by trial and error is not necessarily the best way. Here are seven things to consider before you take the plunge.

1. Live near your rental property. It is important to check on it periodically, take care of repairs yourself, and show the property when it’s time to re-rent it. Forbes put together a list of the 40 top investment areas, but even if you don’t live in a prime rental region, you can still invest in one.

2. Know landlord-tenant laws. Arizona has favorable landlord laws. However, you still need to follow and know the specific landlord-tenant provisions that cover security deposits, access to the property and notice required when you want to end their tenancy. There also are federal laws you need to know, such as habitability and fair housing laws.

3. Make sure you collect the rent on time. This seems like a no-brainer, but believe me, if you get too friendly with your tenants, you might just let them slide a couple of weeks. You don’t want the tenants getting months behind, because, if they can’t pay the current month, chances are they can’t pay multiple months. You really never want to take a partial payment either because it limits your rights to evict. Also, you really do want to build a good rapport with a tenant because it makes the relationship easier to manage with repairs and access. It is very important to have thick skin if you are going to be a landlord because you are going to have to evict someone in the middle of the summer, eventually.

4. Screen potential tenants. It’s worth the time to do a background and credit check on all potential tenants. You can use an online tenant-screening service for this. Credit score alone is not always a reason to accept or deny an applicant, but it is a useful screening tool. You should also conduct an interview and check their references.

5. Customize the lease agreement. If you don’t hire a property manager, you can use a standard lease form you can find online. For example you want to know how many people are going to be residing at the property, whether or not you will allow pets, who is responsible for landscaping and pool maintenance.

6. Inspect the property regularly. A simple drive by says a lot. If the tenant is maintaining the outside, they are normally maintaining the inside. Always take pictures to establish a base line of what was in the house and the condition of the carpet and other items before they moved into the home.

7. Understand this is not a get-rich-quick scheme. It takes time before the property appreciates and your investment starts to pay off. You’ll need reserves to pay the mortgage when the property sits vacant for a few months, you need to replace the A/C unit, put in new carpet and other basic maintenance. Think of being a landlord as part of your overall investment strategy and realistically aim for getting around a 5 percent return on your investment.