AAOA Member Question: As an owner of a small apartment complex, I’ve had to deal with criminal activity on my rental properties in the past. I started running criminal background checks with AAOA a few years back to increase safety for my residents. I’d like to make a rule to not rent to anyone with a criminal background. Can you please provide me with how I can go about amending my rental policy for this?
Answer: There is no way to legally make a blanket policy that would exclude applicants with criminal backgrounds from renting a unit in your complex. This is especially true since the April 2016 US Department of Housing and Urban Development’s Office (HUD) released its guidance on “Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate-Related Transactions.”
HUD’s new guidance is now being used as the de facto best practices guide for handling criminal records and it clearly indicates that blanket policies should be eliminated. Although you may not be intentionally trying to discriminate against minorities, minorities may be disproportionately harmed by a blanket policy. How is this possible? Since 2004 an average of 650,000 individuals have been released from prison on an annual bases. Having a criminal background in many cases makes it extremely difficult for these individuals to access safe and affordable housing that can help them reenter society. A high percentage of these individuals are minorities, meaning more minorities would be negatively affected by your policy, even if you have no intent to discriminate. This is known as disparate impact and is a violation of the Fair Housing Act.
As a landlord you should implement policies that are the least discriminatory. However, this does not mean that you have to accept all applicants with criminal records. HUD’s guidance states you must show that you considered each individual conviction, when it occurred, and what the convicted person has done since then. If you deny an applicant based on a criminal record, you should be able to show that your decision was necessary to achieve a nondiscriminatory interest and there was no other option that would have been less discriminatory.
You may be able to deny applicants with certain types of crimes in your policy, but you must still be prepared to prove that the criminal conduct in the person’s background is directly related to the safety of your residents. We recommend avoiding this type of policy as well to reduce your likelihood of being taken to court.