LEGAL ALERT! RULES FOR USING CRIMINAL HISTORY TO SCREEN TENANTS

In a landscape that continually evolves, the U.S. Department of Housing and Urban Development (HUD) has once again brought to light an important regulation by reinstating the Discriminatory Effects Rule. This development holds far-reaching implications for those who navigate the property management sector. It not only applies to public housing providers but ALL housing providers.

This article seeks to illuminate the intricacies of this recent move by HUD, charting its trajectory and the
subsequent effects it may cast upon property management professionals.

UNDERSTANDING THE DISCRIMINATORY EFFECTS RULE

Central to the ongoing battle against housing discrimination, the Discriminatory Effects Rule emerges as a paramount framework. Its primary objective is to clarify the concept of disparate impact in the context of the Fair Housing Act. Under the purview of this rule, a policy, even when neutral on its face, can be flagged if it disproportionately hampers or affects any protected group.

In layman’s terms, the Discriminatory Effects Rule is a key tool in the fight against housing discrimination. It helps explain the idea of “disparate impact” related to the Fair Housing Act.

Basically, this rule says that even if a housing policy seems fair at first glance, it can still be considered discriminatory if it ends up hurting a specific group more than others.

According to HUD’s press release, “[The Discriminatory Effects Rule] has long been used to challenge policies that unnecessarily exclude people from housing opportunities, including zoning requirements, lending and property insurance policies, and criminal records policies.”

For example, a blanket rule that excludes anyone with a criminal record from living onsite seems fair in light of resident safety. However, this rule can have a discriminatory effect based on race, national origin, and disability. Although it is not unlawful to have a rule about criminal history, there are other ways to achieve resident safety without discriminatory effects.

For example, reviewing how long ago the crime occurred, the nature of the crime, and efforts to rehabilitate should be considered, instead of simply using a “no felons” policy.

The Discriminatory Effects Rule was initially adopted by HUD in 2013. With the turn of a new administration, the rule was recalibrated in 2020, which left some feeling that the new stance was more amenable or helpful to landlords and not so much of a protection for residents.

The new stance added new pleading requirements, new proof requirements, and new defenses that would have made it more difficult for a protected class plaintiff to start and win a disparate impact case.

So, what catalyzed the recent return to the 2013 understanding? Following the 2020 alterations, a series of litigations emerged, championed by various advocacy groups. Additionally, a federal judicial intervention halted the execution of the 2020 modifications, prompting discussions about their alignment with the foundational court case that set the initial standards.

This evaluative process subsequently led HUD to reinstate the 2013 version of the rule, deeming it more
in line with established precedents.

Navigating the maze of housing laws can be a formidable challenge. A critical takeaway is the absolute necessity for property management professionals to insulate themselves from disparate impact claims.

This demands an acute awareness and meticulous evaluation of occupancy policies and criminal history screening practices given their susceptibility to challenges.

The revival of the Discriminatory Effects Rule serves as a poignant reminder of the commitment required to eliminate housing discrimination.

With this reinstatement, property management professionals bear the onus of ensuring their operations align seamlessly with the stipulations of the rule. By recognizing the intricate dynamics of disparate impact and proactively amending any unintentional biases, they can foster an inclusive housing environment.

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CHARTING THE PATH AHEAD

As we step into the future, the onus remains squarely on property management experts to stay abreast of fair housing legislation. Periodic training and continued education become non-negotiable, ensuring preparedness and adherence. With knowledge as the guiding compass, property managers can adeptly steer clear of complaints, ensuring a compliant and inclusive housing landscape for all.

In conclusion, as housing regulations evolve, professionals in the field must remain vigilant, informed, and proactive in their approach, ensuring fairness and equality in housing opportunities.

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