So Your Renter Applicant Has a Criminal Record

By
Education & Training with Adhi Schools, LLC

You're a landlord and you receive an application for one of your vacant units. You get excited, looking forward to the income, but then you learn that the applicant has a criminal record. What do you do?

 

Maybe it matters what the crime is. You might feel comfortable renting to a nonviolent offender convicted twenty years ago. Maybe mental illness was involved and the convicted individual has demonstrably undergone successful treatment. 

 

But what about a sex offender or someone recently convicted of running a meth lab in their last residence? Obviously the type of crime and the amount of time since the conviction will impact your perception of risk. So what do you do? You want to protect your property and other tenants. 

 

Landlords must be careful to ensure that their reaction to these situations is not perceived as unlawfully discriminatory. While no state or federal law prevents discrimination that solely targets criminal offenders, it is illegal for the practice to discriminate against protected groups such as racial minorities, regardless of intent.

 

On April 4th, 2016 the U.S. Office of Housing and Urban Development (HUD) announced that their interpretation of the Fair Housing Act is that nay policy or practice that is "facially neutral" but has a "disparate impact on individuals of a particular race, national origin, or other protected class" is "unlawful", unless the policy or practice is "necessary to achieve a substantial, legitimate, nondiscriminatory interest". This is where the type of offense and the period of time since the conviction come into play. While refusing to rent to an arsonist who burned down his last apartment building can be considered legitimate, discriminating against someone with a petty theft conviction may be more difficult to justify. Especially if it turns out that you are turning away members of an otherwise protected class and you don'thave uniform standards. 

 

The last requirement is an evaluation of potential, less discriminatory, alternatives. In the even a policy is challenged and upheld as lawful, HUD or the rejected tenant applicant can examine alternatives. The landlord does not need to search for alternatives to their legal policy--this burden falls on HUD (or the potential tenant to recommend a HUD-approved policy). But change could be prompted if HUD finds the necessary interest of the policy "could be served by another practice that has a less discriminatory effect." This could be a mandate to include and "individualized assessment" that allows the potential tenant to prove good tenant history since the conviction, evidence of rehabilitation, etc. This may not change the decision for the individual appealing the rejection of their application, but in theory it would make the policy less discriminatory over time. And in October of last year HUD allocated $38 million to more than 100 groups to fight housing discrimination. Legal challenges to these policies should be anticipated. 

 

So, unless you end up rejecting candidates in proportions that match your population, you could wind up on the wrong end of allegations of illegal discrimination. Thus, it is important to have a well thought out, comprehensive, consistent standard for these situations. And, if in doubt, contact legal counsel specializing in these issues. 

 

In summary, here are the rules to keep in mind to best protect yourself:

  • Consider the nature of the crime
  • Consider how long it has been since the conviction
  • Apply your standards consistently--exceptions are risky!

 

Posted by

Cody Carmen

Comments (29)

Bob Crane
Woodland Management Service / Woodland Real Estate, EXP - Stevens Point, WI
Forestland Experts! 715-204-9671

Good information here, we always treat all fairly so it really did not have any effect on our procedures, but I am sure it will affect some.

 

May 12, 2016 02:35 PM
Bob Crane
Woodland Management Service / Woodland Real Estate, EXP - Stevens Point, WI
Forestland Experts! 715-204-9671

Welcome to Active Rain, looking forward to reading many more of your posts, let me know if there is anything that I can do to help as you get started here.
Bob

May 12, 2016 02:35 PM
Robert Vegas Bob Swetz
Las Vegas, NV

Hello Cody ...

congrats on your first post and welcome to Activerain.

May 12, 2016 02:45 PM
Robert May
Robert W May - Lethbridge Real Estate - Lethbridge, AB
Real estate consulting

Hi Cody, welcome to Activerain.  I don't deal with renters anymore, too many headaches over the years.

May 12, 2016 04:22 PM
Robert May
Robert W May - Lethbridge Real Estate - Lethbridge, AB
Real estate consulting

Congratulations on getting this blog post up though, hopefully it is your first of many.

May 12, 2016 04:22 PM
Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, eXp Realty - Kalispell, MT
Helping your Montana dreams take root

Welcome to ActiveRain! Landlords turning down anyone who has the financial means to rent a home is a tricky thing.

May 12, 2016 08:44 PM
Barbara Todaro
RE/MAX Executive Realty - Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Good morning, Cody Carmen we do need to be careful, but everyone with a record is not a threat.... I can remember selling a lot to a man who was just released from prison (a knee breaker!!) and I was able to get him financing to build a home on that lot.... that man sent me business...I always held my breath that it was not another released prisoner!!!  

May 12, 2016 08:59 PM
Barbara Todaro
RE/MAX Executive Realty - Retired - Franklin, MA
Previously Affiliated with The Todaro Team

and welcome to ActiveRain....it's a great place to learn, share, market and network....and I hope you enjoy all of it...

May 12, 2016 09:00 PM
Jim Smith
The Property Management Company - Round Rock, TX
Broker,CRS,GRI,RMP,CNE,TRLP

At issue with the April 4th, 2016 letter, is the non-denial basis based on the "Arrest" record of an applicant.  I spoke with a Senior Executive at H.U.D. regarding the following scenario:  What do I do about the applicant that was recently arrested for aggravated rape and/or child abuse, and is out on bail pending trial?  He responded with: "That is a situation, and those like it, that we did not consider when drafting the letter".  We had a very good conversation (in person), during which, he took numerous notes, asked very good questions, and indicated he would be meeting with his staff regarding this.  He smiled and reminded me that H.U.D. is, of course, a large bureaucratic entity, and it may take awhile to get a modification to the letter out.  We shook hands, and we both agreed that it was a good meeting with reasonable and legitimate concerns.  Now, if we can just get the NAR and Apartment Association to speak with a unified voice on this, we can maybe get results sooner than later!

May 12, 2016 10:57 PM
Cody Carmen

That is an excellent point, thank you for sharing it here. Bureaucracy and the law do move quite slowly. From what I've read there is a genuine interest in not using an arrest (without conviction) record to discriminate in a lot of instances. Innocent until proven guilty is an important principle. But in those extreme cases such as sexual assault it is easy to see why a landlord would hesitate. Hopefully we can see some progress that clarifies this area!

May 13, 2016 01:13 AM
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

Welcome to Active Rain Cody Carmen    - as REALTORS® who have been here for more almost 10 years, it's well worth it!

May 12, 2016 11:11 PM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Cody, this is why I prefer not to do property management, and have a good friend that ONLY does this and has for the last 25+ years.    GREAT first post, and lots to think about!   Welcome to ActiveRain!  

May 12, 2016 11:13 PM
Annette Lawrence , Palm Harbor, FL 727-420-4041
ReMax Realtec Group - Palm Harbor, FL
Making FLORIDA Real Estate EZ

If the past criminal is white, you can reject their application due to criminal history. Does that seem right?

That is what I read in the anti-discrimination argument.

What we are about to witness is investment property owners will be compelled to subscribe to RENTER REFERRAL services. This will serve the same purpose major employers use temporary staffing agencies to screen potential employees.

May 12, 2016 11:13 PM
Cody Carmen
Adhi Schools, LLC - Rancho Cucamonga, CA
Market Analysis--Educational Content, Adhi Schools

Thank you to everyone who posted such great words of encouragement and advice. Happy to see that others found this topic to be as interesting as I did!

May 13, 2016 01:15 AM
Larry Johnston
Broker, Friends & Neighbors Real Estate and Elkhart County Subdivisions, LLC - Elkhart, IN
Broker,Friends & Neighbors Real Estate, Elkhart,IN

Hi Cody Carmen , Welcome to Active Rain and congratulations on your first blog.  It was very good and informative.

May 13, 2016 02:58 AM
Mery Fernandez Empire Network Realty Luxury Brokerage
Empire Network Realty INC. - Orlando, FL
The Rise of An Empire, Let's Build Yours!

Hi Cody! Welcome to the world of Activerain, may your blogging create a whole new chapter in your Real Estate Career.

May 13, 2016 06:39 AM
David Gibson CNE, 719-304-4684 ~ Colorado Springs Relocation
Colorado Real Estate Advisers LLC - Colorado Springs, CO
Relocation, Luxury & Lifestyle residential

Hi Cody,

 

Welcome to ActiveRain.

It seems being an investor and renting out property gets harder every year.

David Gibson

Broker / Owner Colorado Real Estate Advisers LLC

 

Colorado Springs

May 13, 2016 09:52 AM
Sybil Campbell
Fernandina Beach, FL
Referral Agent Amelia Island Florida

Hi Cody Carmen, This was a great blog, the advise if pertinent to the property manager or landlord.  Welcome to Active Rain.

May 13, 2016 11:52 AM
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Welcome to ActiveRain Cody Carmen .

This is The Best place to learn, share and build relationships with like-minded professionals.

May 14, 2016 12:08 PM
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Happened to my potential tenant - and realized his ss# was hacked...

May 14, 2016 12:09 PM
Cody Carmen
Adhi Schools, LLC - Rancho Cucamonga, CA
Market Analysis--Educational Content, Adhi Schools

I've just looked back over the comments on this first post of mine and think it is a great example of the AR community. If you just saw that I liked one of your old comments this is why!

Aug 11, 2016 05:36 AM