Criminal Records, What You Can And Can’t Ask.

A handsome man behind bars

Landlords do have a great deal of control over who they decide to rent to …

but there are lots of rules and regulations that need to be adhered to. These rules and regulations change from time to time, so landlords need to stay up on them as ignorance is not an excuse.

A lot of landlords aren’t aware of relatively recent changes (April 4, 2016) at the federal level about screening applicants with criminal records. Having a broad policy of automatically denying applicants with a criminal record is probably a violation of the Federal Fair Housing Act, according to this document, Office of General Counsel Guidance on Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate-Related Transactions. Doing so is considered Indirect Discrimination.

The screening process allows for background checks, but findings are now required to be weighed on a case-by-case basis. Many states are moving towards removing criminal data or trying to change the way you can use the information in your screening. Let’s look at some of these requirements regarding criminal records.

The Wrong Place at the Wrong Time

First of all, you’re required to understand the difference between arrests and convictions. You can ask an applicant if they’ve ever been convicted but not if they’ve been arrested. You also aren’t supposed to hold arrests against them. If a property owner does proper tenant screening, criminal records are available online, and convictions would show up in a background check anyway. Another factor to keep in mind is that with many states legalizing marijuana, criminal records are being expunged, but who knows how long that will take.

Bad Habits

As a property owner, you have some discretion at your disposal. Was it a one-time offense? What were the circumstances? Are there several convictions on their record? Did they occur over a short period, or is the behavior habitual?

Monsters in the Closet

The nature of the crime can impact your ability to deny. Denials based on convictions for arson, drug dealing, assaults, sex crimes, or other violent acts, for instance, would be considered legitimate because they could jeopardize the safety of other tenants or the landlord.

A Long Time Ago, in a Galaxy Far, Far, Away

How long ago a crime was committed or how long the person has been out of prison can factor into the decision to accept or deny an application. If the person was freed 8 years ago and has had stability in their life, it can be harder to justify your denial didn’t break any rules.

 But if they just got out last week and have little to no work history, they can be denied based on their inability to make rent payments as just cause. Be aware that if they don’t agree with your determination, applicants do have the right to challenge your decision and eventually bring about a civil rights case.

Continuing Developments

How governments are shaping new laws regarding criminal background checks should be of concern to property owners because they heavily favor the tenant. Some cities allow landlords to ask about a criminal record, but only after the applicant has met all other requirements.

This measure is meant to help prevent discrimination. The goal is to shed more light on how and at what point of the process discrimination is occurring. In the past, a landlord could just say “they didn’t meet my requirements for renting,” but they were really using the criminal record as a reason to deny an application. 

 Exceptions

As with many property laws, there are exceptions. The Fair Housing Act does apply to virtually everyone, BUT it doesn’t apply to all types of housing. The property owner is EXEMPT from complying IF:

  • The home they are looking to rent has four or fewer units, and the landlord lives in one of them.
  • The landlord is conducting his own search for tenants (not employing an agency or real estate broker), AND the landlord owns 3 or fewer single-family properties. 
  • The landlord is renting a single room in a home or qualified senior housing.
  • CAUTION: even with a qualifying exemption, any advertising must comply.

As a landlord, conducting a criminal background check is performing your due diligence and a good business practice. You have some discretion on how you use the information you obtain during the screening process. To avoid unneeded headaches and litigation, it is best to apply your screening policies impartially and without prejudice.

Posted in: 1. Property Owner Blog Posts, Finding Tenants, Managing Rentals

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