Criminal Backgrounds and Leasing
HUD is saying you should no longer have a policy of excluding applicants with a felony or misdemeanor just on that basis. There are studies that show certain groups of people have more felonies and misdemeanors on their records, but there is no legitimate reason to exclude them from housing. So now we have to look at what the crime was and when it was committed and decide whether it will really make them a bad tenant. This will require a more nuanced screening process where you may need to be a little softer on anything that comes back in your criminal background check. Just because an applicant has a felony or a misdemeanor, they cannot be excluded from being a resident in one of your properties.
Understanding Disparate Impact
Disparate impact is a document under the Fair Housing Act that says a policy may be discriminatory if it has a disproportionate or adverse impact against someone based on race, color, religion, national origin, sex, familial status, or disability. It tells us there is no real need for the policy. So, if you’re managing your own property, just be aware that these issues are out there. If you have a professional property manager, know that we can no longer have that blanket policy where we will not rent to someone with a criminal record.
Pet and Smoking Restrictions
We still can restrict tenancies based on smoking and pets. We can say no to pets and no to smoking at the property. While you can do that, with pets you’ll limit your market, so reconsider allowing pets if you don’t currently want them. It can cut your market by about 50 to 70 percent.