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Fair Housing: Are You Up to Date on Criminal Background Checks?

By: Daniel G. Drake Posted on: Friday, April 17th, 2020

Since the real estate market crash in late 2008, many people have become landlords who would have otherwise not done so. Beside the normal and expected tasks (collecting rents, doing maintenance, responding to “emergency” complaints, etc.), one of the most important duties that landlords must be aware of is compliance with the federal Fair Housing Act (Title VIII of the Civil Rights Act of 1968, as amended; codified at 42 U.S.C. §§ 3601–3619), particularly that portion dealing with the use of criminal background checks when screening applicants.

For years, Florida landlords were allowed to solely determine their own guidelines on who they would accept as tenants when an applicant had a crime on his/her background, so long as all applicants were treated equally regardless of race, religion, etc. with respect to such guidelines. However, on April 4, 2016, the U.S. Department of Housing and Urban Development (“HUD”) promulgated a document titled Office of General Counsel Guidance on Application of Fair Housing Act Standard to the Use of Criminal Records by Providers of Housing and Real Estate-Related Transactions (hereafter referred to as the “Criminal Background Guidance Document”). The recent Criminal Background Guidance Document vastly changed the way landlords must address and consider applicants who may have a criminal incident in their past.

In brief, instead of solely utilizing bright-line, inflexible criminal history criterion setting forth who the landlord deems acceptable or unacceptable 1, the landlord must, if rejecting an applicant based upon a prior criminal incident, take into account (1) the nature and severity of the applicant’s prior criminal conduct; (2) the amount of time that has passed since the criminal conduct occurred; and (3) individual mitigating factors such as [i] unusual facts or circumstances surrounding the prior criminal conduct; [ii] the age of the applicant at the time of the prior criminal conduct; [iii] evidence that the applicant has maintained a good tenant history regardless of the prior criminal conduct; and [iv] evidence that the applicant has made rehabilitation efforts since the prior criminal conduct occurred. Landlords may not take into consideration prior arrests of the applicant that do not result in an actual conviction, or use a criminal record as a pretext for unlawful discrimination on other grounds such as race, religion, national origin, etc. Landlords can continue to decline applicants based upon a conviction, without having to consider the above-listed additional factors, for the illegal manufacture of a controlled substance or distribution of a controlled substance. The foregoing crimes are the only exceptions, and please note that the exceptions do not pertain to possession of a controlled substance.

HUD is currently investigating and enforcing the Criminal Background Guidance Document. In order to demonstrate compliance with the Criminal Background Guidance Document in the event of a HUD Fair Housing complaint, an applicant who is rejected because of failing to meet a landlord’s initial criminal background guidelines should be notified of such rejection in writing and, within that written document, the applicant should be offered a meaningful opportunity to address with the landlord the additional factors that must be considered per the Criminal Background Guidance Document. The initially-declined applicant may or may not choose to meet with the landlord to discuss the prior criminal incident(s); nonetheless, the landlord must provide the applicant with the right to do so 2 .

So far, HUD has not set forth specific guidelines of what is and what isn’t an acceptable criminal background; instead, HUD is enforcing the Criminal Background Guidance Document by investigating whether the landlord gave declined applicants a meaningful opportunity to address the additional, personal factors listed in the Criminal Background Guidance Document. Compliance with the Fair Housing Act is highly recommended, as HUD investigations can be lengthy, tedious, and expensive. Further, if found guilty not complying with the Fair Housing act (including but not limited to the Criminal Background Guidance Document) the monetary penalties can be quite severe.

 

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[1] “Base” criminal background guidelines are still acceptable; however, HUD’s Criminal Background Guidance Document comes into play whenever an applicant is rejected for failing to meet the landlord’s base criminal background requirements.

[2] Please note that the Criminal Background Guidance Document applies only when an applicant is denied based upon one or more prior criminal incidents. It does not affect—and applicants can still be denied for—poor credit, failing to meet minimum income requirements, etc.