By: William J. Burke
The Office of General Counsel of the U.S. Department of Housing and Urban Development (“HUD”) has issued guidance dated April 4, 2016 addressing how improper use of criminal background information by applicants for sale, rental or financing of housing that is subject to the Fair Housing Act (“Act”) may violate the Act’s prohibition of discrimination.
The Act prohibits policies and practices that have a discriminatory effect, even when discrimination is unintended. Noting that a large percentage of the population has some criminal record in their past, restricting access to housing on the basis of criminal history may have an impact on individuals of a particular race, national origin of other protected class, and if so such a practice or policy is unlawful unless it is necessary to serve a substantial, legitimate and non-discriminatory interest of the housing provider (or if such interest could be served by another practice that is less discriminatory in effect).
HUD’s pronouncement is lengthy, but the following are among the significant take-away points:
Be prepared to demonstrate that your policy or practice of using criminal background checks is necessary to achieve a substantial, legitimate and non-discriminatory interest. This interest cannot be hypothetical or speculative. Insuring the safety of other residence and protecting the landlord’s own property should be considered among legitimate interests served by such background checks (assuming they are the actually reason for the policy and not a pretense for prohibited discrimination). In a discrimination case, the landlord may be forced to bear the burden of proving that the landlord’s practice or policy actually assists in protecting residence and/or property. General assertions that an individual with an arrest or conviction record poses a greater risk than individuals without such records are not sufficient to satisfy this burden.
The housing provider whose policy or practice is to exclude individuals because of one or more prior arrests (without conviction) cannot satisfy the burden. Arrests are not equivalent to convictions.
Even basing denial of housing on a record of prior conviction, in and of itself, is not sufficient to establish a valid policy. A housing provider’s policy must not indiscriminately deny housing to anyone with a criminal conviction. Consideration must be given to such things as the nature of the crime of which the applicant was convicted, passage of time since the conviction and other case by case considerations. A housing provider should be prepared to demonstrate that its policy distinguishes between conduct that demonstrates a risk to others and conduct that does not. The Act does, however, expressly grant some protection to one who declines housing to a person who has been convicted of the illegal manufacture or distribution of controlled substances as defined in Section 102 of the Controlled Substances Act.
Housing providers should consider if there is a less discriminatory alternative.
A criminal background check cannot be used as a pretext for other impermissible discrimination. For example, does the landlord review criminal background records for all applicants, or only applicants of a certain age or ethnic background?
In summary, providers of housing, especially residential landlords, sellers, homebuilders and others who may use or consider using criminal background checks to evaluate applicants for their apartment buildings or housing developments, should have a well-considered policy designed with the assistance of counsel to comply with the Fair Housing Act and HUDs guidance on the subject, and in practice should apply such policies with caution and educate property managers, sales and renal agents and others involved in the process of renting or selling homes.