Recent guidance from HUD has created quite a stir with property managers and owners. It seems because certain races are proportionally higher in arrests and conviction, a property manager can be discriminating without even intentionally trying to.
The guidance as far as HUD is concerned, is for property managers to consider:
1) Was it an arrest, not a conviction?
2) Would the public be harmed by that behavior, if it is indeed a conviction?
Examples might include drug behaviors, arson, violent behavior, etc.
3) What was the timing of the conviction? If it was a long time ago, then there is less basis for the argument that it is still presenting a threat to public safety.
We have to think about these issues. What we do as property managers is to protect the owner’s property and give them the highest likelihood of success i.e. profit. If we are excluding someone from renting the property, we must have a good reason to do so, such as the preservation of the property (arson) and the protection of the public (drugs).
A lot of property managers use the guidance that it needs to be five years or more since conviction. They use this same rule for evictions, bankruptcy (when it is not related to medical bills), and collections.
Full link to the article about HUD’s guidance:
“Take, for example, a restriction against renters with a prior arrest record, regardless of whether they were convicted of a crime. HUD suggests that a bare arrest history cannot satisfy the association’s burden of proving that the policy is necessary to achieve a legitimate, nondiscriminatory interest. The Supreme Court has held that the mere fact of an arrest offers little to no proof that the person actually engaged in a criminal act. Simply being arrested does not provide a reliable basis to determine if an individual constitutes a risk to the safety of owners and residents. So, an association should almost certainly not reject a tenant or purchaser simply because they have an arrest record.
A record of a conviction, in contrast, does demonstrate that the candidate committed a crime. But, the association still has to demonstrate that the particular type of crime is directly related to their legitimate interest in protecting the community. That is, a conviction for a minor traffic offense could not reasonably present a risk to the community, and so prohibiting all renters or owners who have been convicted of a “crime,” as a blanket rule, is unlikely to pass muster.
Instead, a legal, enforceable association policy restricting renters or owners on the basis of criminal record would have to distinguish between criminal conduct that presents a demonstrable risk of public safety, and conduct that does not. The policy or rule must take into account the nature and severity of the crime, and the amount of time that has passed since the crime was committed, if it is going to serve a legitimate association interest. So, even restrictions banning all felons may be challenged under the law, as such a rule does not take into account the type of felony (violent versus so-called “white collar” crime), or the age of the conviction. It is obvious that a person convicted twenty years ago of tax fraud presents far less risk to a community than a person recently convicted of a violent assault.”
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