Much like the 1991 HUD memorandum regarding occupancy standards (the “Keating Memo”) this new document provides general guidance for how to consider whether a housing policy violates federal law.  The memo is not law in itself, but it interprets how the law may apply to certain situations.  As with any new guideline, the legal ramifications will develop on a case-by-case basis as matters are heard in court and the guidance is considered.

According to the new guidelines, turning down tenants solely based on their criminal history may violate the Fair Housing Act.  While the Act does not list people with criminal records as a protected class, HUD notes that minorities have disproportionately high rate of arrests and convictions.  For this reason, while in some cases a landlord may refuse to rent to a party with a criminal record, the policy should not be applied automatically without further consideration.

Tenants with criminal records guidelines

The guidelines note that there is a difference between an arrest and a conviction.  An arrest may occur if a police officer forms the belief that someone needs to be detained for their own safety, for the safety of others, or for the investigation of a crime.  A conviction may occur only after a party has been formally charged with a crime and had an opportunity to defend himself or herself in a court of law.  A judge or a jury must determine that it is beyond a reasonable doubt that the individual committed the crime.  Both arrests and convictions may appear on a criminal history.

HUD takes the position that a policy of excluding individuals because of a prior arrest without a conviction is discriminatory.  Quoting the U.S. Supreme Court, HUD states, “[t]he mere fact that a man has been arrested has very little, if any, probative value in showing that he has engaged in any misconduct.”  In other words, an arrest is not, by itself, proof of a crime.  A housing provider who categorically denies housing to a person because of an arrest on their record violates the Fair Housing Act.

Convictions, on the other hand, are different.  HUD states in the memo, “In most instances, a record of conviction (as opposed to an arrest) will serve as sufficient evidence to prove that an individual engaged in criminal conduct.”  Even so, a blanket policy of excluding all people with a criminal conviction probably violates the Fair Housing Act.  The landlord with a policy of excluding applicants with a criminal history must be able to point to a “substantial, legitimate, nondiscriminatory interest” served by the policy.  The landlord must also be able to prove that the policy achieves those goals.  A housing policy must take into consideration the nature and severity of the crime, and the amount of time that has passed since the criminal conduct occurred

Whether the discrimination is accidental or intentional, during screening or just at the inquiry stage, the landlord or property manager is still at risk of a discrimination lawsuit. The best practices are:

• • Do not impose blanket bans on renting to those with criminal history or arrest records.

• • If there is evidence of a conviction, consider the nature and severity of the crime and how long ago the criminal conduct took place.

• • Ensure everyone who interacts with applicants is trained well on current Fair Housing policies.

• • Keep screening policies pertaining to arrest records and criminal history specifically related to safety of persons and property. The policy must distinguish between criminal conduct that indicates a demonstrable risk to resident safety and property and criminal conduct that does not.

• • Obtain and use a standard screening policy in compliance with Fair Housing and HUD regulations, and apply it equally to anyone who applies. You may want to consult an attorney or housing specialist to develop a rental criteria relating to criminal conduct.

Keep in mind that HUD has not stated that criminals are a protected class.  HUD recognizes that housing providers have an interest in providing safe housing to all their tenants.  These new guidelines do not require landlords to rent to convicted felons, but do require landlords to examine the criminal history (if any) of its applicants with more care than before.  Naturally, there will be applicants who refuse to provide details about their criminal history or provide inaccurate information revealed by a screening company.  An incomplete or inaccurate application may be denied.

Following best practices will save you thousands of dollars in litigation and court costs, so it is well worth the effort.  If in doubt about a policy, contact your legal resource for help dealing with tricky questions related to this new HUD guidance and the Fair Housing Act.

Evan L. Loeffler is the principal attorney at the Loeffler Law Group PLLC in Seattle, Washington.  His firm’s practice emphasizes landlord-tenant relations. 

www.loefflerlawgroup.com