Background Checks for Residents

17 Nov Background Checks for Residents

 

Recently, HUD issued guidance expanding its review of the use of criminal background checks in determining qualifications for residents. Under the guidance, refusing to rent to someone on the basis that he or she has a prior conviction at some point – and nothing else – may be illegal discrimination under the Fair Housing Act. In light of this position you may wish to consider modifying any written policy on resident background checks.

This policy might state as follows:

Background Checks. The Company conducts background checks, including into criminal background, on all individuals applying for residency. To become a resident, an applicant must meet the Company’s standards for residency which include a review of financial and other qualifications. An applicant will not be disqualified merely because of a past criminal conviction. The Company will review the nature of the conviction, underlying conduct of the conviction, age of conviction, and other factors to determine if an applicant with a criminal conviction qualifies for residency.

Before the recent statements, many companies did not have any established policy and other companies disqualified applicants based on convictions. We recommended that convictions be reviewed to determine if it was material to either the qualifications for the job or leasing an apartment. HUD has not issued any bright line guidelines on when you can reject an applicant based on a criminal conviction, so each case is fact specific. Any absolute rules may be subject to challenge by HUD.

Other companies have policies describing which convictions would disqualify an applicant. Here is a modification of one such policy that you may consider:

Each applicant will be checked for criminal background. An applicant will not be disqualified merely because of a past criminal conviction. The Company will review the nature of the conviction, underlying conduct of the conviction, age of conviction, and other factors to determine if an applicant with a criminal conviction qualifies for residency. Misdemeanors will generally not disqualify an applicant. Misdemeanors, other than sex crimes, will generally not the considered after 7 years with a clean record. Felonies older than 10 years may not be considered as long as the applicant has no other convictions during the past 10 years. Crimes relating to sex/violence/weapons will be reviewed carefully to determine whether the applicant poses a possible safety concern to residents and the community.

Property Management companies should adopt a written policy and its leasing consultants and managers trained on that policy. Since HUD is scrutinizing this area, prior to disqualifying an applicant based on a criminal conviction, the situation should be reviewed at the corporate level.

Contact me if you wish to discuss this further.
Randy C. Gepp
Taylor English Duma LLP | 1600 Parkwood Circle, Suite 400, Atlanta, GA 30339
P: 678.336.7197 | M: 404.644.3153 | rgepp@taylorenglish.com
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