Federal – HUD Issues Guidance on Use of Criminal Records by Housing Providers

Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate-Related Transactions

Last week (April 4, 2016), the U.S. Department of Housing and Urban Development issued official guidance about how the discriminatory effects and disparate treatment methods of proof apply in Fair Housing Act cases in which a housing provider justifies an adverse housing action – such as a refusal to rent or renew a lease – based on an individual’s criminal history.

Although not common in Virginia or the District of Columbia, community associations in some jurisdictions (New York City & Florida) exercise document-based rights to approve (or disapprove) prospective sales and leases.  The criminal record of the applicant (purchaser or lessee) is a factor considered during many of these reviews.

Under the new HUD guidance, HUD makes it clear that where a policy or practice that restricts access to housing on the basis of criminal history has a disparate impact on individuals of a particular race, national origin, or other protected class, such policy or practice is unlawful under the Fair Housing Act if it is not necessary to serve a substantial, legitimate, nondiscriminatory interest of the housing provider, or if such interest could be served by another practice that has a less discriminatory effect.  As provided by HUD, because of widespread racial and ethnic disparities in the U.S. criminal justice system, criminal history-based restrictions on access to housing are likely disproportionately to burden African Americans and Hispanics.

HUD clarifies that a housing provider violates the Fair Housing Act when the provider’s policy or practice has an unjustified discriminatory effect, even when the provider had no intent to discriminate.  Facially-neutral policies that have discriminatory effects violates the Fair Housing Act if it is not supported by sufficient justification.

All policies that exclude or discriminate against persons based on criminal history must be tailored to serve the housing provider’s substantial, legitimate, nondiscriminatory interest of an association and take into consideration such factors as the type of the crime and the length of the time since conviction.

Where a policy or practice excludes individuals with only certain types of convictions, a housing provider will still bear the burden of proving that any discriminatory effect caused by such policy or practice is justified.

Such a determination must be made on a case-by-case basis. Selective use of criminal history as a pretext for unequal treatment of individuals based on race, national origin, or other protected characteristics violates the Fair Housing Act.

Because all circumstances are different, the application of the law to each community association differs.  As always, contact an experienced attorney for advice and counsel.

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