In early April, the U.S. Department of Housing and Urban Development (HUD) announced new guidance for taking adverse actions based on an individual’s criminal history. The guidance states that it is HUD’s position that criminal background screening policies employed by housing providers have the potential to have an impermissible disparate impact on certain protected groups.

Individuals with a criminal history are not a protected class under the Fair Housing Act, but HUD notes that the use of a blanket policy to deny any applicants with a criminal record might lead to disparate impact on a protected class due to the disproportionate incarceration rates among certain groups. As HUD states, “across the United States, African Americans and Hispanics are arrested, convicted and incarcerated at rates disproportionate to their share of the general population.”

HUD’s guidance states that a policy that denies applications based on arrest records does not serve a legitimate interest to protect the safety of residents and their property. Regarding criminal convictions, HUD favors a more individualized approach to tenant screening and encourages landlords and property managers to study the specifics of an applicant’s criminal history before deciding whether or not to rent to an individual. Before making this decision, HUD suggests assessing “the nature and severity of an individual’s conviction,” along with “the amount of time that has passed” since the conviction. HUD strongly encourages landlords and property managers to make their decisions on a case-by-case basis.

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  1. HUD’s guidance represents its interpretation of the Fair Housing Act. The Fair Housing Act only applies to certain landlords and housing providers based on a number of factors, including the number of units owned by the housing provider and whether the landlord or housing provider uses a broker, agent, or salesman. Consider consulting legal counsel to determine if you are subject to the Fair Housing Act.
  2. Considering severity, nature, and timing of criminal convictions should be part of trying to ensure that any policies minimize the risk of any disparate impact while also reducing the risk to existing residents and property.

The SmartMove leasing recommendation does not take into account an applicant’s criminal background at all. The leasing recommendation is based only on your applicant’s credit information.

HUD’s guidance states that a policy that denies applications based on arrest records does not serve a legitimate interest to protect the safety of residents and their property. SmartMove’s criminal reports do not return arrest records.

SmartMove makes use of advanced filters and industry best practices to search through 46 state criminal databases, as well as Most Wanted databases and the National Sex Offender Public Registry. As a result, landlords benefit from a search encompassing more than 200 million criminal records (from both state and national databases). Our reports are available within minutes, and can be accessed anywhere online, 24 hours a day, seven days a week.

Learn more about how SmartMove’s tenant background checks can help you make better leasing decisions and find acceptable renters for your property.