Window to the Law: Criminal Background Checks and Fair Housing

Window to the Law: Criminal Background Checks and Fair Housing

Nov 1, 2021
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Overly broad bans on renting to individuals with criminal records may lead to costly fair housing violations. Use these tips to review your criminal record screening policy to ensure it complies with the law and avoids disparate impact liability.

Window to the Law: Criminal Background Checks and Fair Housing - Transcript

Welcome to Window to the Law! I am Maame Nyamekye, Staff Attorney at the National Association of REALTORS®. In this episode, I will discuss why it is important to give your criminal background screening practices a second look in order to avoid a fair housing violation. 

In fact, recently several housing providers have found themselves faced with lawsuits alleging the misuse of criminal history in violation of fair housing laws. In New York, a housing provider recently settled a case for over $1 million where the plaintiff alleged the that housing provider maintained an overly broad ban on renting to people with criminal records.  In Florida, as many as 48 Florida housing providers were also sued for the alleged improper criminal background screening of prospective tenants.

The use of criminal histories to make housing decisions has long been on fair housing advocates radars.  In 2016, HUD issued guidance urging housing providers to exercise caution when implementing criminal history policies and practices to make housing decisions.  In that guidance, HUD reported that African Americans and Hispanics are arrested, convicted, and incarcerated at disproportionate rates compared to the general population, resulting in criminal history-based barriers to housing and creating a disproportionate impact on minorities. 

While persons with criminal records are not a protected class under the Fair Housing Act, race, color and national origin are and the improper use of criminal history to make housing decisions may have a disparate impact on those protected classes. 

Under a disparate impact analysis, a housing provider may be held liable for discriminating against a protected class absent any evidence of intent or motivation to discriminate.  Meaning, liability may arise when a facially neutral policy or practice has, or predictably would, result in a disproportionate negative impact on a protected class under the Fair Housing Act.

Some states and localities, such as Illinois, New Jersey, and the District of Columbia, have even enacted laws restricting a housing provider’s use of criminal records. 

Consider these best practices when using criminal history to make housing decisions:

  • Have a written criminal history policy.
  • Apply criminal record policies consistently.
  • Do not ask or consider arrests without convictions.
  • Avoid blanket bans on applicants with a criminal conviction.
  • Be sure to exclude only those with convictions that present a demonstrable risk to resident safety or property.
  • Document housing decisions.
  • Be familiar with local and state laws that apply to a housing provider’s use of criminal histories.

For more information on use of criminal history in housing, check out NAR’s article on fair housing and criminal-based history practices and policies.

Thank you for watching this episode of Window to the Law. 

Window to the Law is a monthly video series that provides valuable risk management tips and information to help real estate professionals navigate legal issues facing the real estate industry.
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