rental property housing legislation

HUD Bans Using Arrests Records

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The Department of Housing and Urban Development (HUD) issued new guidance on April 4th, 2016 that is going to require all single-family and multifamily rental professionals to revisit their policies.

In a decision that is aimed at protecting the rights of “returning citizens”, HUD is limiting the use of arrest records in tenant screening nationwide for both public and private housing. While they are not discouraging the use of criminal records in the background screening process, they are requiring a conviction be reported for the record to be considered in the decision. Using an arrest record without a conviction is being viewed as discriminating against a consumer who has not been found guilty of having done anything illegal.

Per the new guidance:

Exclusions Because of Prior Arrest

A housing provider with a policy or practice of excluding individuals because of one or more prior arrests (without any conviction) cannot satisfy its burden of showing that such policy or practice is necessary to achieve a substantial, legitimate, nondiscriminatory interest. 25 As the Supreme Court has recognized, “[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. An arrest shows nothing more than that someone probably suspected the person apprehended of an offense.”26 Because arrest records do not constitute proof of past unlawful conduct and are often incomplete (e.g., by failing to indicate whether the individual was prosecuted, convicted, or acquitted), 27 the fact of an arrest is not a reliable basis upon which to assess the potential risk to resident safety or property posed by a particular individual. For that reason, a housing provider who denies housing to persons on the basis of arrests not resulting in conviction cannot prove that the exclusion actually assists in protecting resident safety and/or property.

What does this mean?

In your rental policy there should be clearly defined requirements for an applicant to be approved to live in your property. For example: income must be xx times the monthly rent. Likewise there should be criteria that will disqualify applicants despite them meeting other requirements. This is the section where your policy clarifies your stance on criminal records that appear during the applicant’s background check. . Our recommendation is that you specify that the use of a criminal record must be the result of a conviction, and denial should be limited to specific crimes such as:

  • Violent crimes, which would include any convictions with the use of firearms,
  • Crimes of a sexual nature,
  • Crimes against property or persons (such as arson and theft), and,
  • Convictions of drug manufacturing or distribution.

When updating your written rental policy, you should review the content so it answers these 3 questions:

  1. What is the nature of the criminal conviction?
  2. How severe is crime that resulted in a conviction?
  3. What is the length of time since conviction occurred?

Along with each of these questions you should consider whether your requirement is appropriate for the type of housing you offer, and the community it is in (i.e. family community, senior community, individual home, etc…).

The new guidance does not go so far as to make criminals a protected class so you are still completely within your right to deny applicants that violate the criteria above, however more than ever before you have a burden of proof requirement. In order to safely depend upon making a decision involving prior convictions, you as the housing provider must be able to prove that your policy clearly excludes individuals with only certain types of convictions. This proof in your policy is necessary to achieve a substantial, legitimate, nondiscriminatory interest. The use of ambiguous language or blanket statements such as, “a felony is an automatic denial” will get you into trouble.

The new guidance clarifies this requirement as:

A housing provider with a more tailored policy or practice that excludes individuals with only certain types of convictions must still prove that its policy is necessary to serve a “substantial, legitimate, nondiscriminatory interest.” To do this, a housing provider must show that its policy accurately distinguishes between criminal conduct that indicates a demonstrable risk to resident safety and/or property and criminal conduct that does not.

HUD’s new requirements may seem like a big change at first, but it can be done very easily by following these steps:

  1. Review your policy to make sure the language is clear, and conforms to the HUD guidelines (and have your housing specialist attorney read it over).
  2. Educate your staff, or anyone involved in reviewing background checks, so they are aware of the new guidance.
  3. Consider contacting your tenant screening provider to ask about their ability to restrict records that cannot be used in the decision.

ApplyConnect® has already taken the steps necessary to filter our criminal background checks to exclude arrest records in order to mitigate our clients from Fair Housing enforcements and civil litigation.

For more information about the guidance of the Fair Housing Act read the complete HUD document

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9 Replies to “HUD Bans Using Arrests Records”

    1. There are a couple of different questions contained here that I will address:

      1) A conviction from 5 years ago is legal to use in your decision. Most types of convictions are able to be used within 7 years, and some extreme offenses (violent sex offenders for example) can be used for longer or for life.

      2) Tread cautiously when using assumptions based on observation. Assuming an applicant is currently a drug user based on appearance can lead to discriminatory decisions without proof to substantiate the claim. The reason we promote relying on background information is because it is objective, fact based data that is presented consistently for all applicants to help remove the liability of making a decision that could violate fair housing. You might believe this person is using drugs, but they might argue they were not approved because of their race, ethnicity, sexual orientation, etc. and you are left without documented proof of why they were denied. Relying on the fact that they were convicted for drugs 5 years ago gives you that documentation to protect your decision.

  1. Ryan, I was arrested 30 years ago while in high school and it was dismissed. An HOA is denying me approval to purchase based on this arrest. Do you agree that this is a violation of what is referenced in the Guidance of the Fair Housing Act HUD document?

    1. Thanks for commenting, and it’s unfortunate to hear you’re having to deal with this situation.

      First and foremost I must clarify that nothing contained within these comments is meant to constitute legal advice. I strongly recommend you consult a lawyer familiar with housing law in your state.

      The general rule in most areas for criminal records is 7 years. There can be exceptions for certain types of offenses, but those are usually the most extreme cases (murder; sex offenders; etc.). A record from 30 years ago that you say was expunged sounds like something you should approach legal counsel about, and dispute with the HOA. Our company does not provide criminal records for home ownership (we specialize in rental housing and employment), but standard practice dictates we won’t even provide most criminal records that are beyond 7 years in order to avoid our client’s inadvertently making a decision based on information provided that they aren’t legally allowed to base a decision on.

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9 Replies to “HUD Bans Using Arrests Records”

    1. There are a couple of different questions contained here that I will address:

      1) A conviction from 5 years ago is legal to use in your decision. Most types of convictions are able to be used within 7 years, and some extreme offenses (violent sex offenders for example) can be used for longer or for life.

      2) Tread cautiously when using assumptions based on observation. Assuming an applicant is currently a drug user based on appearance can lead to discriminatory decisions without proof to substantiate the claim. The reason we promote relying on background information is because it is objective, fact based data that is presented consistently for all applicants to help remove the liability of making a decision that could violate fair housing. You might believe this person is using drugs, but they might argue they were not approved because of their race, ethnicity, sexual orientation, etc. and you are left without documented proof of why they were denied. Relying on the fact that they were convicted for drugs 5 years ago gives you that documentation to protect your decision.

  1. Ryan, I was arrested 30 years ago while in high school and it was dismissed. An HOA is denying me approval to purchase based on this arrest. Do you agree that this is a violation of what is referenced in the Guidance of the Fair Housing Act HUD document?

    1. Thanks for commenting, and it’s unfortunate to hear you’re having to deal with this situation.

      First and foremost I must clarify that nothing contained within these comments is meant to constitute legal advice. I strongly recommend you consult a lawyer familiar with housing law in your state.

      The general rule in most areas for criminal records is 7 years. There can be exceptions for certain types of offenses, but those are usually the most extreme cases (murder; sex offenders; etc.). A record from 30 years ago that you say was expunged sounds like something you should approach legal counsel about, and dispute with the HOA. Our company does not provide criminal records for home ownership (we specialize in rental housing and employment), but standard practice dictates we won’t even provide most criminal records that are beyond 7 years in order to avoid our client’s inadvertently making a decision based on information provided that they aren’t legally allowed to base a decision on.

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The nation’s most trusted tenant screening for real estate agents, landlords, and property managers. No cost background checks available 24/7.

©2018 ApplyConnect. All rights reserved

ApplyConnect marks used herein are trademarks or registered trademarks of applyconnect.com. Other product and company names mentioned herein are the property of their respective owners.