Undercover Tenant-Screening Stings are Ensnaring Well-Intentioned, Unsuspecting Landlords

Blog post written by Scott Feir and Jay Corker Free.

Ensuring tenant safety just became more challenging.

HUD and the Washington State Attorney General’s Office recently informed landlords that turning down housing applicants based on their criminal records may constitute unlawful race-based discrimination — even if they have no intention to discriminate — because such a policy has a disproportionate impact on African-American and Hispanic applicants. Many well-intentioned landlords have understandably been caught flat-footed by this about-face in policy, given that HUD’s stance overruled 2016 guidance from the King County Office of Civil Rights, the Washington State Human Rights Commission, and other local government agencies explicitly providing that discrimination on account of criminal history is not unlawful.  HUD’s policy also collides with Washington State statutes specifically authorizing landlords to conduct criminal history searches. Nonetheless, this is the new law of the land, and landlords wanting to protect tenant safety and property must adjust.

MPBA recently spoke with the Washington State Attorney General’s Office.  Its position on the discriminatory impact of exclusions based on criminal records is well reasoned.  However, although the nondiscriminatory policies of the AG’s office are laudable, they are ensnaring unsuspecting landlords via tenant-screening stings designed to ensure landlords have appropriate policies in place.  Violating landlords are being prosecuted and substantial fines have been imposed.

HUD and the AG’s Office allow exclusions based on criminal records only where the landlord can prove the exclusion is necessary to achieve a substantial, legitimate, nondiscriminatory interest such as protecting tenant safety or property.  However, showing such exclusions are “necessary” is a difficult burden for landlords to meet.  HUD requires that the landlord prove its policy accurately distinguishes between criminal conduct that indicates a demonstrable risk to resident safety or property.  Because the landlord bears the burden of establishing the efficacy of the policy and may only be able to meet this burden by showing the policy is “empirically validated,” it is critical that landlords implement carefully designed policies and procedures.

What is a practical approach to conducting nondiscriminatory tenant screening?

  1. Delay consideration of criminal history until after permissible blanket exclusions, such as poor credit rating or income thresholds, have been considered.
  2. Except for persons convicted of drug manufacturing or distribution, landlords should not use blanket exclusions of persons with criminal records. Instead, conduct an individualized, case-by-case determination that considers, at a minimum, the nature, severity, and recency of the criminal conduct.
  3. Be cautious excluding applicants with no convictions in the past five years.  When a person goes six or seven years without reoffending, research shows that they are nearly as likely to reoffend as a person with no criminal record.
  4. Best practice is to also allow the applicant an opportunity to submit mitigating information (e.g., rehabilitation efforts, education and training, and character references) prior to arriving at a decision on exclusion.  Then incorporate the mitigating information into the final determination.
  5. Absent exceptional circumstances only consider convictions rather than mere arrest records.

Navigating the myriad of complex, opaque regulations is confounding for many landlords. If you have questions, contact a member of MPBA’s experienced team of real estate attorneys for guidance on your situation.