Tenant screening criteria that denies tenancy for any criminal conviction, regardless
of the nature of the offense or when it occurred, increases the risk of
"disparate impact" discrimination claims against the landlord.
Disparate impact is a legal theory for proving unlawful
discrimination. Tenant screening criteria that has a greater statistical impact
on a protected class (race, national origin, etc.) is said to have a disparate
impact on that class. Once a member of a protected class proves that a
policy or practice has a disparate impact on the class, the burden is shifted to
employer or landlord (for example) to prove the practice is truly relevant to
the position or tenancy (to establish the business necessity).
An individual may well be able to prove that a specific
practice (consideration of income and credit standing, for example) has a
disparate impact on a protected class. A landlord will have little
difficulty proving that things like income, credit standing and previous rental
history are applicable to the tenancy, however.
Similarly, a plaintiff may be able to prove that
underwriting criminal records (arrests & convictions) has a disparate impact on
a protected class. Odds are good that the landlord will be able to
convince the court that recent convictions for serious offenses (crimes against
persons or property and serious drug related offenses for example) are applicable to the
tenancy. Convictions for many minor offenses and offenses that occurred
long ago are a different story.
Landlords are well advised, therefore, to include in
their tenant screening criteria offenses that are clearly relevant to the tenancy and limit
consideration of those offenses to a reasonable period of time.
The good news is that it is easy to establish a specific
list of offenses, conviction of which has a "manifest relationship" to
the tenancy. There is also some precedent (in state law) for using "seven
years from date of final disposition" as a cut-off - not considering anything older
than that. Date of final disposition means the date the individual
completed their sentence and fulfilled any other obligations associated with their
sentence or release. Convicted felons who do not re-offended for seven
years from the their date of final disposition are arguably no more likely to
re-offend than the general population.
Use of active warrants is likely defensible. Use
of records of arrest, however, is likely not.
So... the bad news is that things are a bit more
complicated than in the past. But... the good news is that a well
constructed tenant screening criteria... one that limits
denials to specific offenses occurring within seven years of final disposition -
serves to mitigate the risk of a disparate impact discrimination
claim and ) deny fewer applicants good applicants.
For help developing or refining your own tenant
screening criteria, see the
Rental Criteria Worksheet the
Landlord
Page on
MyScreeningReport.com®.
MyScreeningreport.com®
is a service of Moco Incorporated.
Under the negligent hiring theory, an injured
party (another employee, a resident or others) may bring an action against an
employer arguing that the employer failed to exercise reasonable care in
screening
prospective employees.
A recent judgment against the Charlotte (North Carolina)
Housing Authority establishes a similar precedent with regard to
tenant
screening - which
might be described as the negligent leasing theory. Under this negligent
leasing theory, an injured party (employee, another resident or others) may
bring an action against a landlord arguing that the landlord failed to exercise
sufficient care in conducting background checks on prospective tenants.
In this case, the victim (63) was strangled to death in
her apartment (in a public housing complex managed by the Charlotte Housing
Authority) by a neighbor who had a history of violence, drug related offenses
and mental illness. The estate of the victim brought suit arguing that the
housing authority failed to properly screen the tenant (perpetrator).
At issue was the criminal records search.
According to testimony the Housing Authority only does local or state-wide
criminal searches. A more thorough (broader) background screening (that
included Maryland) would have revealed the applicants criminal past. The jury
concluded that the Authority could have and should have known more before
renting to the perpetrator and awarded the victim's estate $132,000 in damages.
A thorough background check (criminal records search) includes searching
additional names (AKA's) and addresses (jurisdictions) associated with the
applicant. Fully one third of valid (and verifiable) criminal "hits" are
the result of these additional search.
The data show that approximately 4% of applicants have
serious (or deniable) criminal convictions in their past. A static search
(single name & single jurisdiction) will identify serious offenses in 2-3% of
applicants. Thus, a failure to conduct these additional searches means a
typical 100 unit property will have between 1-2 serious offenders living on
site. Granted, it is only a problem if something bad happens. But if
something bad does happen, the landlord is vulnerable to a negligent leasing
claim.
Talk with your tenant screening company. Know
exactly what is included in the public records component of your tenant
screening reports. Ask that they search additional names & jurisdictions.
It should add very little time and expense to the tenant screening process -
time and expense that is easily offset by avoiding serious problems
down the road.
Visit
MyScreeningReport.com® to learn more about comprehensive tenant screening
reports.
MyScreeningReport.com®
is a service of Moco Incorporated.