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Update - Changes To Fair Housing Laws

After careful review of the new guidance from HUD which warns about the use of criminal history when considering a new rental applicant, we offer the following suggestions:

Update Your Company Policy

  • HUD did not warn landlords to never consider criminal history.  Thus you should obtain a National Criminal History report for EVERY person who completes a Rental Application or obtain them for NO ONE.  It is clearly discrimination to order reports for some applicants but not all.
  • Update your written company policy concerning tenant selection.  (Sample Rental Application).
  • Update your written telephone script (Sample Telephone script).
  • Always have at least one witness at all rental selection interviews.
  • It may be advisable to make a video and/or audio recording of the interview.

Tenant Selection Policy Regarding Criminal History - Ignore the following

  • Misdemeanors of any kind
  • Adjudication withheld, Dismissals, Pre Trial Diversions, Nolle Prossee, Acquittal, etc. on any offences.
  • Arrests on any offenses
  • Illegal drug or Controlled Substance or paraphernalia possession or use convictions.

Examples of situations where you are “probably” safe for which to deny an applicant:

  •     Felonies or illegal manufacture or distribution of a controlled substance within the last 7 years.
  •     Felonies resulting in bodily harm.
  •     Felonies involving intentional damage or destruction of property.

Civil Liability
This may become an opportunity for rejected rental applicants to threaten to sue a landlord.  You should consult a competent Attorney immediately if this occurs.  In the meantime a little common sense may be helpful.  For example, remember that surreptitious recording can be done by anyone today.  Assume every telephone conversation and face-to-face conversation is being recorded.  Watch what you say.
When asking about criminal history, use caution

Rejecting the Applicant - All rental applicants must meet several criteria in order to qualify.  Among them:

  • Total Household Income - at least three times the monthly rent.  Your policy may be stricter
  • Credit Reporting - Credit history must demonstrate appropriate care and concern for all financial obligations.
  • Rental History - Rental history must reflect timely payment of rent, no complaints regarding noise, disturbance or illegal activities, proper notice to vacate, and only normal “wear & tear” to the property upon vacating.
  • Criminal History - No felonies for illegal manufacture or distribution of a controlled substance with the last 7 years.  No felonies resulting in bodily harm or intentional damage or destruction of property within the last 7 years.  No sexual offenses ever.
  • Pet Policy - No pets of any kind are permitted without specific written permission of landlord.
  • Tobacco Policy - Use of tobacco permitted or not inside and/or outside the dwelling unit
  • Occupancy Requirements - The number of occupants must be in compliance with general HUD standards and guidelines for the applied for unit – 2 heartbeats per bedroom.

You may have additional resident selection criteria in your company policy.

Any one of these criteria is sufficient to disqualify an applicant.  So, if you must advise the applicant of rejection, be sure to indicate the exact reason.

Record Keeping

Finally, it may be months before a rejected applicant threatens legal action.  By then you may not remember anything about the incident and that may put you in a precarious position.  On the other hand, if you are able to review notes of the various conversations, meetings, etc. you will be far better equipped to deliver quick and decisive evidence of those meetings.

Summary

Yes, the long arm of the law has stretched over landlords and most will see this new regulation as distorted, tortured, and entirely illogical.  Alas, none of those opinions will support your case if you are sued by a lying felon who says you discriminated or a Federal Judge who says you did.  Follow a few basic and fairly easy protocols and you should be able to move forward as though nothing happened.

 

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