Monday, August 22, 2016

New HUD Guidance on Criminal Background Checks

Landlords and sellers that use criminal background checks to screen their tenants and buyers may be violating the U.S. Fair Housing Act. On April 4, 2016, the U.S. Department of Housing And Urban Development (HUD) issued a Guidance reviewing discriminatory housing practices based on an applicant’s criminal history. According to the new Guidance, housing decisions based arbitrarily on an individual’s criminal history can violate the U.S. Fair Housing Act. See 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.


As many as 100 million U.S. adults – or nearly one-third of the U.S. population – have some sort of criminal record. A discriminatory policy or practice can violate the U.S. Fair Housing Act where a denial of housing on the basis of criminal history has a negative impact on individuals of a particular race, national origin, or other protected class. According to the HUD Guidance, African Americans and Hispanics are arrested, convicted and incarcerated at rates disproportionate to their share of the general population, and thus criminal records-based barriers to housing are likely to have a disproportionate impact on minority home seekers.

Substantial, Legitimate, & Nondiscriminatory Interest

To withstand muster under the Fair Housing Act, a discriminatory policy or practice must serve a “substantial, legitimate, nondiscriminatory interest” of the housing provider, and the interest can’t be served by another practice that has a less discriminatory effect. The Guidance discusses a number of practices that do not violate the Fair Housing Act. For example, Section 807(b)(4) of the Fair Housing Act does not prohibit discrimination “against a person because such person has been convicted … of the illegal manufacture or distribution of a controlled substance . . .” Section 807(b)(4) does not, however, allow housing discrimination against a person for a mere drug-related arrest, or for drug-related convictions such as possession. A discriminatory policy or practice must also take into account the nature and severity of an individual’s conviction, such as distinguishing between criminal convictions that indicate a demonstrable risk to the safety or property of other residents (such as convictions for rape, murder, assault, or arson), and criminal conduct that does not.

Arbitrary Bans on Arrests or Convictions

The Fair Housing Act prohibits both intentional housing discrimination and housing practices that have an unjustified discriminatory effect because of race, national origin or other protected characteristics. Under the Guidance, while the Fair Housing Act does not prohibit housing providers from appropriately considering an applicant’s criminal history, an arbitrary and overbroad criminal history-related housing ban is likely to lack any legally sufficient justification. Accordingly, a discriminatory effect resulting from a policy or practice that denies housing to anyone with a prior arrest, or to persons with any kind of criminal conviction, will violate the U.S. Fair Housing Act.
Additional information on the new Guidance is available from the U.S. Department of Housing And Urban Development (HUD) and the National Association of REALTORS®.