Landlords with a "No Criminals" Policy Are Now Breaking the Law

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Prior to 2016, landlords in the US were free to have policies that refused tenants with criminal backgrounds. They were even free to turn down tenants that were arrested but not convicted. However, guidance from the Department of Housing and Urban Development now severely limits landlords' ability to deny ex-convicts due to the racial implications. HUD Guidance.

Arrest vs Conviction

The new guidance from HUD prohibits landlords from denying a tenant's application merely because of an arrest. Landlords should be extra careful because many tenant screening software services only show landlords the tenant's arrest history, not the result of an arrest. Relying solely on such software's recommendations may be illegal. The reason is that a person who is arrested is considered innocent until proven guilty. A "conviction" means that the tenant has pleaded guilty or has been found guilty by a court of law. The HUD states it is improper and unfair to deny housing to an innocent person. Layman Summary, HUD Guidance.  

Criminal Records

Newly published guidance from the Department of Housing and Urban Development (HUD) states that landlords cannot deny all applicants with criminal records due to the disparate impact on minority groups. The government determined that because minorities are disproportionality affected for the same crimes (especially non-violent crimes like drug dealing), landlords cannot permanently ban them without violating the Fair Housing Act's ban on discriminating against minorities. In other words, landlords and property managers are prohibited from having strict "No Ex-Convicts" policies. Instead, landlords must look at the particular applicant, how long ago the crime was, and what the person has done recently. A common rule of thumb is raising a red flag only if the tenant was convicted (not just arrested) for a violent or dangerous crime within the past 7 years. If the tenant does have a recent criminal record, landlords should still not automatically deny them. They should implement a policy of having conversations with convicts to determine whether they are actually a danger to other tenants, considering the nature of the crime and any evidence or referrals the tenant can provide to prove they are no longer a danger. Layman Summary, HUD Guidance.

Evicting a Tenant Once They Are Arrested

These examples cover a landlord who denied a rental application. However, the same rules apply when a tenant was arrested while living in an apartment. A landlord cannot evict a tenant simply for being arrested because an arrest is not the same as guilt. Second, the landlord cannot evict the tenant unless the crime may increase the danger to other tenants in the apartment. For example, if a tenant was arrested and convicted of tax fraud, it's unlikely that such a crime would create a danger to other tenants. However, if the conviction was for murder, the landlord has a right to remove the tenant to protect the others in the building.

Consequences

Landlords who violate this rule are in violation of the Fair Housing Act. Such violations can result in $16,000 per violation for a first offense. To be clear, that means $16,000 for each tenant that received discrimination - a discriminatory policy by a larger landlord may result in dozens of tenants receiving some form of discrimination. In cases where the Justice Department is involved, civil penalties may rise to $100,000 per violation and federal courts can add additional damages. Landlords should also keep in mind the time and costs involved in defending against such an action. About 36% of all complaints from tenants end up in some action taken against the landlord, with either a charge or a settlement, based on 2016 data. Tenants can report such issues here.

Arrest vs Conviction


The new guidance from HUD prohibits landlords from denying a tenant's application merely because of an arrest. Landlords should be extra careful because many tenant screening software services only show landlords the tenant's arrest history, not the result of an arrest. Relying solely on such software's recommendations may be illegal. The reason is that a person who is arrested is considered innocent until proven guilty. A "conviction" means that the tenant has pleaded guilty or has been found guilty by a court of law. The HUD states it is improper and unfair to deny housing to an innocent person. Layman Summary, HUD Guidance.


Criminal Records


Newly published guidance from the Department of Housing and Urban Development (HUD) states that landlords cannot deny all applicants with criminal records due to the disparate impact on minority groups. The government determined that because minorities are disproportionality affected for the same crimes (especially non-violent crimes like drug dealing), landlords cannot permanently ban them without violating the Fair Housing Act's ban on discriminating against minorities.

In other words, landlords and property managers are prohibited from having strict "No Ex-Convicts" policies. Instead, landlords must look at the particular applicant, how long ago the crime was, and what the person has done recently. A common rule of thumb is raising a red flag only if the tenant was convicted (not just arrested) for a violent or dangerous crime within the past 7 years. If the tenant does have a recent criminal record, landlords should still not automatically deny them. They should implement a policy of having conversations with convicts to determine whether they are actually a danger to other tenants, considering the nature of the crime and any evidence or referrals the tenant can provide to prove they are no longer a danger. Layman Summary, HUD Guidance.

Evicting a Tenant Once They Are Arrested


These examples cover a landlord who denied a rental application. However, the same rules apply when a tenant was arrested while living in an apartment. A landlord cannot evict a tenant simply for being arrested because an arrest is not the same as guilt. Second, the landlord cannot evict the tenant unless the crime may increase the danger to other tenants in the apartment. For example, if a tenant was arrested and convicted of tax fraud, it's unlikely that such a crime would create a danger to other tenants. However, if the conviction was for murder, the landlord has a right to remove the tenant to protect the others in the building.

Consequences


Landlords who violate this rule are in violation of the Fair Housing Act. Such violations can result in $16,000 per violation for a first offense. To be clear, that means $16,000 for each tenant that received discrimination - a discriminatory policy by a larger landlord may result in dozens of tenants receiving some form of discrimination. In cases where the Justice Department is involved, civil penalties may rise to $100,000 per violation and federal courts can add additional damages. Landlords should also keep in mind the time and costs involved in defending against such an action. About 36% of all complaints from tenants end up in some action taken against the landlord, with either a charge or a settlement, based on 2016 data. Tenants can report such issues here.

Last Update : September 11, 2018 UTC

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