BRADLEY ISA (RA)
Sales Associate/Property Manager
Nakamoto Realty, LLC
Immediate Past President, Oahu Chapter
National Association of Residential Property Managers
Q. Before I allow someone to rent my apartment, I always check their criminal background in order to keep the neighborhood safe and my unit in good condition. I heard lately that I might get in trouble with the Fair Housing office for this. Is that true?
A. Have you ever heard the saying “real life is sometimes stranger than fiction”? In this case it happens to be true. In June of last year, the U.S. Supreme Court ruled on a case that challenged the practices of many landlords and Property Managers. In a 5-4 decision, they said that housing discrimination does not need to be intentional in order to be illegal.
In other words if a landlord has a policy that no one with a felony conviction (past or present) can rent their unit, they would be unintentionally discriminating against a specific ethnic group. Because a specific ethnic group represents a larger portion of the felony convictions, they would be unintentionally discriminating against them.
The Department of Housing and Urban Development (HUD) recently came out with a notice stating their recommendations about this change as it pertains to criminal history (April 4, 2016 “Office of General Counsel Guidance on Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate-Related Transactions”). As it reads, “A housing provider violates the Fair Housing Act when the provider’s policy or practice has an unjustified discriminatory effect, even when the provider had no intent to discriminate.”
HUD also gives the three steps used to determine whether or not a claim of discrimination has merit. They are:
Evaluating whether the criminal history policy or practice has a discriminatory effect: This is based on local or national data showing which ethnic groups may be over-represented in the prison population.
Evaluating whether the challenged policy or practice is necessary to achieve a substantial, legitimate, nondiscriminatory interest: The housing provider must prove that the policy or practice will actually result in a safer environment. It cannot be based on stereotypes or generalizations about anyone with a conviction record. If a person was merely arrested but not convicted, they must not be treated as if they’d done anything wrong.
Evaluating whether there is a less discriminatory alternative If the housing provider proves that their policy does indeed protect others, HUD or the person filing the complaint may propose an alternative policy.
There is one area where a housing provider may discriminate based on their criminal history. Anyone who was convicted of illegally manufacturing or distributing a controlled substance may be denied. This does not include those convicted of drug possession. As always you should always consult with your legal counsel before making any changes. This issue is still developing.
As you can see there are many things to know about managing property.
There are issues beyond the lease and even the Landlord Tenant Code. To learn more about Fair Housing and a variety of other pertinent topics, please consider attending our Annual Property Management Seminar.
The Oahu Chapter of the National Association of Residential Property Managers will hold its 11th Annual Property Management Seminar on August 16, 2016 at the Japanese Cultural Center (2454 S. Beretania Street). It is designed to help individuals who manage their own properties gain more knowledge and operate within the law. We provide a binder with necessary forms and guidelines. Updates will be provided on Hawaii’s medical marijuana laws, eviction, Fair Housing, insurance claims and much more! Please email email@example.com for further information and to find out how to register! Also continue reading your Star-Advertiser for updates!