Fair Housing is the Law – New Screening Guidelines Emerge

For some time now, it’s been suggested that certain corporate housing policies can have a disparate impact on certain (mostly minority) communities – even when not intended. HUD has been working to mitigate this but now, there has been a Supreme court decision which helps clarifies both the issue, as well as expectations when it comes to landlords, property managers and community association managers (CAMs) who are screening applicants and conducting background checks before renting to prospective tenants.

After the recent ruling, Landlord/Tenant specialist attorneys Heist Weisse & Wolk recently issued the following advice to property managers:

Based upon the General Counsel Guidance published by HUD on April 4, 2016 and the recent Supreme Court holding regarding “Disparate Impact” we are recommending to all our Florida clients that they review their “Resident Selection Criteria”, application process, policy and procedures immediately and implement NEW standards for rejection or approval of an applicant. This applies to ALL properties whether HUD or government subsidized, Tax Credit or conventional. There may be other rules for government funded or regulated properties which you must follow that may conflict with our recommendations.

This is a general opinion of our firm and does not constitute any specific legal advice for any specific situation. As things are clarified, we will know more.

A “safe harbor” approach now would be to ignore the following:

1. Misdemeanors of any kind;
2. Adjudication withheld, Dismissals, Pre Trial Diversions, Nolle Prosse, Acquittal, etc. on any offenses;
3. Arrests on any offenses;
4. Illegal Drug or Controlled Substance or paraphernalia possession or use convictions.

Examples of situations where you are “probably” safe for which to deny an applicant:

1. Felonies of illegal manufacture or distribution of a controlled substance within the last 7 years, felonies resulting in bodily harm or intentional damage or destruction of property for example, “arson”, within the last 7 Years
2. Sexual related offenses for any time period.

These decisions/policy changes are overdue, not so much because of any disparate impact, but simply because in our view, we believe that everyone deserves a second chance in life. While we understand that managers and housing communities are trying to secure the best possible residents for their properties, some home owner’s associations (HOAs) have become over zealous and many have crossed the line in recent years. Some condo owner associations (COAs) and home owner associations are declining anyone that has simply been arrested or charged with a “felony” regardless of the actual offense, and regardless of the outcome. In most cases, no additional research is done into the case, other than reading the words “Arrest – felony” on the screening results. Worse still, other associations will state one process for dealing with background checks but quietly institute another. As a recent NPR commentary on this notes, this is patently unfair.

There is a world of difference between declining active, recidivist felons with long criminal records, versus those who have been arrested for smoking weed as a teenager.

While property managers are not social workers, it should be clear that in the long run, refusing housing (or employment) to individuals because of relatively minor mis-steps in their (sometimes distant) past will come back to haunt them in the long run, since those individuals who are unable to secure work or shelter are further marginalized and eventually lured back into crime just to survive. Further, if more HOAs/COAs had exercised a little more “common sense” in their policies, we might not have a very difficult court decision to contend with – but here we are. In many cases, home owner association guidelines and condominium documents are going to need hasty revision in order to stay on the right side of what are likely to be some very expensive test cases.

It’s more important than ever that investors, owners and landlords have a professional property manager that they can trust and who keeps abreast of the most recent changes in the law. While as property mangers we are not permitted to provide legal advice, we attempt to ensure that needless lawsuits do not come your way.

For more information on Orlando property management, contact us here at Condo Metropolis on: 407-901-5161 or email: Management@OrlandoPropertyManagementExecs.com