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The Fair Housing Act (the “Act”) unequivocally prohibits intentional discrimination by housing providers, but last year, the United States Supreme Court ruled that housing providers may run afoul of the Act, even absent the intent to discriminate. In the Supreme Court’s 2015 decision in TX Dept. of Community Affairs v. Inclusive Communities, the Court upheld disparate impact liability under the Act, which means that a housing provider can be liable under the Act if the provider’s policy or practice has a disparate impact, or disproportionate impact, on one of the Act’s seven protected classes, even absent any intent to discriminate.

Within a year of the Supreme Court’s landmark decision, the U.S. Department of Housing and Urban Development (“HUD”) issued related guidance on how criminal records may be used to make housing-related decisions without resulting in disparate impact liability under the Act (“Guidance”). To be clear, the Guidance does not prohibit housing providers from considering criminal history to make housing-related decisions. Rather, the Guidance stresses that consideration of criminal records must be thoughtful and tailored to serve a legitimate, substantial, and non-discriminatory interest of the housing provider that cannot be served in a less discriminatory way. For those housing providers who wish to continue to use criminal history as a factor in making housing-related decisions, here are some practical tips for how to create and employ a sound criminal history screening policy.

First, develop a written criminal history screening policy and be sure to apply the policy consistently to all applicants. The policy should only permit consideration of convictions and never take into consideration nor permit a housing provider to screen for any prior arrests or charges. Even where convictions are revealed during the screening process, the policy should avoid blanket or categorical exclusions of any person with any conviction record. Similarly, the policy should also take into consideration the nature and severity of the conviction and any other mitigating factors, such as the age of the person at the time of the conviction, the length of time since the conviction, and evidence of rehabilitative efforts, such as stable employment, counseling or completion of drug treatment. To that end, a sound criminal history policy will also include a reasonable “lookback” period. According to the Guidance, employment law may offer insight into the proper use of criminal history. Based on this, a good rule of thumb may be to include no more than a seven year lookback period on an applicant’s criminal history, as the Guidance suggests that recidivism tends to decline after this point.

Furthermore, the Guidance explains criminal history screening policies that serve a substantial, legitimate, and non-discriminatory purpose of protecting the safety of persons or property are generally acceptable, so any housing-related decision based on criminal history should be in furtherance of that purpose. Excluding applicants based on misdemeanors, non-violent crimes and victimless crimes is inadvisable, as these types of crimes would unlikely threaten resident safety or property.

The Fair Housing Act does provide one express exception, and would allow housing providers to exclude prospective residents who have been convicted of manufacturing or distributing a controlled substance. However, this exemption does not extend to other drug-related crimes, such as possession.

Implementing these points into a criminal history-based policy will go a long way toward helping housing providers avoid inadvertently violating the Fair Housing Act. To learn more about the “Office of General Counsel Guidance on Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate-Related Transactions,” please click here.

Lesley Walker is senior counsel, Legal Affairs, for the National Association of REALTORS®.

For more information, visit www.realtor.org.

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