Here’s a pop quiz: is it illegal to reject applicants because they have a criminal record?
The answer is yes, if based on a blanket no-criminals policy.
No one thinks they’re violating Fair Housing laws. Even now, you’re probably sitting there thinking “Me? I would never discriminate, I’m open-minded and tolerant!”
And yet, Fair Housing lawsuits have spiked in the last five years. Have American landlords suddenly become intolerant bigots?
Of course not (although I’m sure there are some out there). The fact is, Fair Housing laws are extremely complex and easy to violate inadvertently. The above example is considered discriminatory based on race, based on the “disparate impact” rule. The Department of Housing and Urban Development (HUD) issued a ruling in April 2016 that landlords may not have a blanket policy that disqualifies applicants with a criminal record.
HUD means business; over the last five years, they have dramatically stepped up rental discrimination lawsuits and cases. They want to make very public examples out of people, to send a stern message. In 2013, they even released a mobile app to make it easier for renters to report cases of discrimination.
The cases are not black and white (no pun intended), like most landlords assume. In a recent ruling, a property manager in Colorado was found guilty of discrimination because she tried to place tenants with children toward one end of the apartment complex, and tenants without children in different building.
The property manager had received lots of complaints from an older tenant, about the noise caused by the family below her. When the family moved out, the manager tried to mollify the older neighbor by finding renters without children for the neighboring unit. She showed units in another building to prospective renters with children.
Hardly the stereotypical, frothing-at-the-mouth bigot.
In another case, a Pennsylvania property management company was indicted because they didn’t like to put tenants with children in one of their buildings that had high stairs and minimal guardrails. For safety reasons, they put renters with children in other buildings with fewer obvious hazards.
Also found guilty of discrimination.
Caution! Achtung! Cuidado!
By now it should be growing clear that Fair Housing laws are not clear, or obvious, or intuitive. Tolerant, everyday people like you and I can easily run afoul of them.
You can even be found guilty of discrimination for simply choosing to not renew a lease agreement. It happened to a Connecticut landlord last year – they opted not to renew a lease to a family and were sued successfully for $15,000.
Children can be noisy. They can play on the stairs, equipment and commons areas, getting hurt easily and often. They can eat paint chips and spark lead paint lawsuits. They can draw all over the walls, carpets and flooring, or even break holes in the walls. They can infuriate other tenants and cause complaints. In other words, they can be terrible occupants.
But you can’t discriminate against families with children, or any of the other protected classes. It doesn’t matter how many neighbors and other tenants complain, you can’t deny rental applications of families just because they have children. You can’t segregate families into different rental units. You can’t charge higher rent. You can’t even collect a higher security deposit.
So what can landlords and property managers do?
You can charge higher rent for pets, and a higher security deposit if the tenants have pets, and that higher security deposit will help cover damage caused by the children.
You can require that rent payments be deducted from the tenant’s paycheck every two weeks, to ensure on-time, in-full rent payments.
You can (and should) screen all applicants aggressively, from eviction history reports to credit reports to criminal reports. You should verify their employment, their income, their housing history.
But even criminal history has limitations, as mentioned above. Ultimately, landlords need to take a holistic view when screening tenants, taking everything into account and being careful to keep records of why you rejected or accepted each rental application.
And remember: we were all children once, and we caused plenty of ruckus in our day. You don’t have to lease to every family that applies, just like you don’t have to lease to every ex-con that applies. But you do have to be prepared to justify every leasing decision you make, with facts like credit history, eviction history, income, housing history and the like.♦
Have you noticed an uptick in Fair Housing lawsuits in your city? What are your concerns, about HUD’s aggressive enforcement of Fair Housing laws?