A question arises as to whether landlords are prohibited from renting to undocumented aliens and whether establishing residency status should be part of a landlord's tenant screening process.

Here is an article in the Huffington Post about a recent U.S. Supreme Court ruling (June 2011) on a Hazelton, Pennsylvania ordinance penalizing landlords for renting to undocumented aliens. 

Supreme Court: Hazelton, PA Immigration Law Must be Re-Examined

A federal appeals court previously prohibited enforcement of the Hazelton (and similar) ordinance(s). The Supreme Court decision sent the case back to the appeals court for review… based on another Supreme Court decision upholding an Arizona employer sanctions law and a state's right to enforce federal immigration law.

Note that the order does not automatically mean Hazleton can enforce the measure - only that the matter must be reviewed by the appeals court in light of the previous decision.  If the appeals court reverses itself, then landlords in those jurisdictions which pass such laws may well be prohibited from renting to undocumented aliens.

Another question might be… is it within the landlord’s rights to deny tenancy based on residency status - as part of their tenant screening process?  

There is little question that verifying residency status as part of the tenant screening process will have a disparate impact on individuals protected by virtue of national origin - which in turn may form the basis of a discrimination claim.  Disparate impact claims are challenging and arguably best avoided, since the burden of proof shifts to the defendant (landlord) who must then establish the business necessity of the practice. 

The bottom line is that landlords are currently not prohibited from renting to undocumented aliens.  Verifying residency status exposes the landlords to disparate impact claims.  Further, landlords are generally more concerned about whether the applicant will fulfill their lease obligation than whether they are in the country legally.  On a business level, assuming you are able to verify identity of the applicant and that they are otherwise well qualified - in terms of credit, public records, rental and income verifications - requiring proof of residency status should probably not be part of your tenant screening process.  

MyScreeningReport.com® offers a handy Criteria Worksheet if you need assistance with your tenant screening criteria.  MyScreeningReport.com® is a service of Moco Incorporated.

posted @ Monday, October 24, 2011 2:34 PM | Feedback (0)