In April, the U.S. Department of Housing and Urban Development (HUD) made the job of a property manager a little bit harder. In past blogs, I’ve talked about the possibility of conducting criminal background checks on potential applicants. It turns out that it’s not quite as simple as that.
HUD recently released new guidelines for the use of criminal background checks for property managers, with HUD attorneys presenting the following conclusion: “Selective use of criminal history as a pretext for unequal treatment of individuals based on race, national origin, or other protected characteristics violates the (Fair Housing) Act).”
So what does this mean for the property manager? Many properties have adopted a zero tolerance policy for criminals, refusing to rent to anyone with a felony conviction. But according to HUD, that policy can result in a possible fair housing violation, as it likely will impact protected groups, resulting in a charge of discrimination. The guide is based on disparate impact, a legal doctrine adopted by HUD which states that a policy may be deemed discriminatory if it has a disproportionate adverse impact against any protected group currently protected under fair housing laws. In other words, even if you apply a set policy across the board to all tenants, that policy could still be considered discriminatory.
Instead, HUD is recommending something that it has cautioned against in the past; analyzing a complete application, taking into consideration the nature and severity of the crime, and the amount of time that has passed since the criminal conviction. The only exception to guidance that property managers can make is for felons who have been convicted of manufacturing or distributing a controlled substance.
Like any Fair Housing law, property managers cannot choose what applicants receive a criminal background check, so any policy would have to be implemented across the board, with a criminal background check given to all potential renters, which can be fairly costly, yet even then, the burden will fall on the property manager to prove that their rejection of the applicant is not discriminatory.
This interpretation makes it particularly difficult for property managers trying to turn properties with high crime rates around. And property managers, aware of their responsibility to provide a safe environment for their tenants, are caught in the middle.
Still in its infancy, it’s unclear what the impact of this guidance will have on property managers nationwide. The wording in the guide in somewhat ambiguous, and it’s likely that the industry won’t know the direct implications until a lawsuit is filed.
Source: Criminal Background Checks