Landlords Warned: Don’t Discriminate Based on Criminal Records

August 2, 2019

Property managers are increasingly getting sued for refusing to rent to ex-convicts. In Florida, 48 property managers have been sued by one law firm alone this year for refusing to rent to those with a past criminal conviction.

Juana Watkins, vice president of law and policy and general counsel for Florida REALTORS®, warned in a video to members that an increasing number of lawsuits are being filed regarding policies against renting to tenants with criminal convictions, and that property managers need to learn the law and make sure they have a written policy in place.

“Private law firms are essentially testing whether property management companies are adhering to the Fair Housing Act, and if in their opinion they are not, they’re filing a lawsuit,” Watkins says in the video.

Eighty percent of formerly incarcerated people surveyed said they had experienced difficulty accessing housing after they were released, regardless of how long ago their conviction was, according to a report from the Ella Baker Center.

The Fair Housing Act does not specifically deny a landlord the right to reject an applicant based on a prior conviction or criminal background. The Department of Housing and Urban Development, however, has issued a statement on the matter, stating that a blanket policy of denying felons can have a “disparate impact” on some minority populations. Watkins explains that “disparate impact” is an act of discrimination that may not harm a single individual under the Fair Housing Act but is considered harmful to a minority group overall. Some minority communities, such as African Americans and Hispanics, have a higher percentage of members convicted of a felony, and therefore, denying rent to a felon as a blanket policy could be considered discriminatory under the Fair Housing Act, Watkins explains.

“Unfortunately, it doesn’t matter if a rental policy purposely discriminates or not,” she says. “With HUD’s recommendations in hand, a law firm can file a lawsuit. And even if a property management company has done nothing wrong, it’s always expensive for a brokerage to defend itself in court.”

Watkins suggests landlords check their in-house rental policies for any potential “disparate impact” and make sure to show that a screening policy is “justified,” which HUD defines as “necessary to achieve a substantial, legitimate, nondiscriminatory interest.”

“The policy can’t be speculative or hypothetical, meaning evidence must exist that supports the screening policy,” she says. “While protection of other residents’ safety and their property may be considered, the housing provider must prove, through ‘reliable evidence,’ that the policy serves that purpose.”

Watkins urges landlords to have a written policy with standards on how to evaluate all individuals. Also, she urges a delay in evaluating an individual’s criminal record until after all financial and other qualifications have been met.

“This helps avoid any unintentional discriminatory effect,” she says. “Do not make decisions on individuals based on prior arrests that did not result in a conviction.”

REALTOR® Magazine offers additional screening information: Dos and Don’ts of Screening Tenants Legally.

Lawsuit Claims 48 Florida Property Managers Refused Rent to Felons,” Florida REALTORS® Association (July 24, 2019)