Crime & Security: Excluding Dangerous Persons Without Violating Fair Housing Laws

Can you tell which of our 13 security policies are legal and which are discriminatory?

 

Homicide, burglary, robbery, drug offenses, and other violent crimes have been on the rise across much of the country since the COVID-19 pandemic began in 2020. While crime risks vary based on many factors, no apartment community is completely safe. All of this makes maintaining security a top priority for any landlord. Investing in security goes beyond alarm systems, surveillance cameras, locks, gates, fences, and other hardware. It also requires you to maintain control over the people who live in your community. After all, having an airtight security system to keep out criminals won’t do you any good if your tenants commit—or allow their guests to commit—crimes at the community.

For these reasons, it’s imperative to consider a prospective tenant’s risk of criminal behavior as part of your applicant screening process. You also need to take swift and decisive action to evict tenants who do engage in criminal activity at your property. The problem is that while security and crime prevention is a legitimate and compelling need, excluding prospects or tenants for reasons related to criminal acts could expose you to risk of liability under fair housing laws.

This month, the Coach will explain—and help you avoid—the hidden discrimination risks in rental policies designed to keep people with a criminal past or present out of your community.  After providing a quick legal briefing, we’ll ask you a series of questions requiring you to determine whether a particular kind of security policy or practice violates fair housing laws. We’ll then explain why the policy is either legal or illegal.

WHAT DOES THE LAW SAY?

The federal Fair Housing Act (FHA) makes it illegal to refuse to rent or deny a person housing because of their race, color, religion, sex, handicap (disability), familial status, or national origin. Criminals are not a protected class. But policies that purport to exclude applicants or tenants solely on the basis of criminal activity or the risk of such activity may run afoul of the FHA.

Disability discrimination and past drug use. As we’ll explain in more detail later, past drug addiction is considered a disability under the FHA. Thus, refusing to lease to a person solely because they were once addicted to drugs is a form of illegal disability discrimination. Exception: The FHA doesn’t prevent a landlord from excluding a person who poses a “direct threat” to other tenants—such a someone who currently uses or sells illegal drugs.

Disparate impact discrimination. Notice that having a criminal record isn’t on the list of classes protected by the FHA—although it is a protected class under some state laws. However, refusing to lease to a rental applicant just because he or she has a criminal record might have the effect of discriminating against those of particular races or national origins who are arrested, prosecuted, and incarcerated at disproportionate rates, as compared to whites and other parts of the population.

In 2016, the federal agency that enforces the FHA, the U.S. Department of Housing and Urban Development (HUD), published guidance (HUD guidance) making this point totally clear. Citing the widespread racial and ethnic differences in the U.S. criminal justice system and statistics showing that across the nation, African Americans and Hispanics are arrested, convicted, and incarcerated at disproportionately higher rates than whites with respect to their share of the general population, the HUD guidance states that barriers to housing based on criminal records are likely to have disproportionate impact on minority home seekers.

In addition, because most victims of domestic violence are women, seeking to exclude an applicant or tenant because she has been the victim of domestic violence might have the effect of discriminating on the basis of sex, and perhaps race or national origin, as well.  

YOU MAKE THE CALL:

IS THIS A LEGAL OR DISCRIMINATORY SECURITY POLICY?

Those are the basic fair housing rules that come into play when landlords implement policies and practices designed to exclude people due to risk of criminal activity (which, for simplicity’s sake, we’ll refer to collectively as “security policies”). Let’s now apply them to real-life situations.

Your job: Determine if the landlord’s proposed security policy is legal or discriminatory. Then, we’ll let you know whether and why you’re right or wrong.

1. Criminal Background Checks of All Rental Applicants

Security Policy: A landlord wants to perform criminal background checks on all prospective applicants.

Legal or Illegal?

Answer: Legal.

Explanation: As we just explained, excluding a person solely on the basis of their criminal background may violate the FHA and some states’ fair housing laws. However, that protection is limited. Landlords have every right to establish policies governing who may live in their community, as long as their standards are fair, reasonable, and nondiscriminatory, and apply equally to all applicants regardless of race, color, etc.

HUD and the courts have long recognized landlords’ rights to perform background screening to ensure applicants meet their legitimate rental criteria. That includes criminal background checks to the extent that they serve the landlord’s legitimate business interest in:

• Protecting their property and the safety and property of their tenants;
• Ensuring that applicants can pay the rent; and
• Retaining other tenants who may be fearful and leave the community if a person with a criminal record is allowed to live there.

Bottom Line: Liability risk stems not from performing criminal records screening but how you perform it, including not only your screening criteria but how you use the results to make decisions about applicants. The HUD guidance sets out three key questions landlords should ask to evaluate whether their criminal record check policies are legally sound:

1. Does the policy have a discriminatory effect? In court or a HUD administrative proceeding, the person claiming discrimination would have the burden of proving that the landlord’s criminal background checking policy has a discriminatory effect on one or more protected classes, for example, by statistical evidence showing that African Americans, Hispanics, and other minorities have disproportionately high arrest and conviction rates, as compared to whites.

2. Is the policy necessary to achieve a substantial, legitimate, and nondiscriminatory interest? When and if the complainant produces evidence of discriminatory effects, the burden shifts to the landlord to show that denying housing to people with a criminal record is necessary to achieve what HUD refers to as a “substantial, legitimate and nondiscriminatory interest” (“substantial interest standard”). Explanation: While excluding dangerous people is a legitimate interest, it must be supported by more than bald assertions based on stereotypes that individuals with criminal arrests and convictions pose a greater risk than people without criminal records. The landlord must also prove that the policy actually does protect tenant safety and property.

3. Is there a less discriminatory alternative? A criminal record policy that meets the substantial interest standard may still be illegal if the person complaining can prove that the landlord could have served that interest by adopting another policy with a less discriminatory effect.

Coach’s Tip: Don’t bother performing criminal background checks unless and until you first complete the credit, rental history, and other necessary checks. After all, why incur the legal risks, not to mention costs, time, and administrative effort to do a criminal screen on an applicant who isn’t qualified to lease from you in the first place?

2. Criminal Background Checks of High-Risk Rental Applicants

Security Policy: A landlord wants to perform criminal background checks, but only on applicants who pose a high risk of criminal activity.

Legal or Illegal?

Answer: Illegal.

Explanation: Performing selected criminal background checks on just those applicants the landlord believes to pose a high risk of criminal activity would be illegal unless there are clear, objective, and nondiscriminatory criteria for determining whether a person represents a high risk. But in reality, selective criminal background checking typically involves stereotyping, racial profiling, and targeting of particular religions or nationalities.   

3. Blanket Ban on Leasing to Persons with Criminal Backgrounds

Security Policy: A landlord adopts a blanket policy of refusing to rent to any applicant found to have a criminal background.

Legal or Illegal?

Answer: Illegal.

Explanation: As we’ll see, making rental decisions on the basis of criminal record is allowable only if you follow a highly fact-specific case-to-case inquiry. Blanket policies that treat all criminal conduct the same way aren’t acceptable.

Example: A New York City community rejected an African-American applicant after learning of his felony conviction. The community claimed that its policy of automatically rejecting anyone with a felony conviction was nondiscriminatory because it applied to all applicants regardless of race, etc. The applicant conceded that the policy was neutral on its face but contended that it had the effect of racial discrimination, citing “empirical evidence showing that nationally, and in New York State, blanket bans on eligibility, based on criminal history, result in the denial of housing opportunities at a disproportionate rate for African Americans and minorities.” Although the applicant would still have to prove his claim at trial, the court found that the statistical evidence was enough to warrant holding a trial and dismissed the owner’s motion to dismiss [Jackson v. Tryon Park Apartments, Inc. et al, No. 6:2018cv06238 - Document 17 (W.D.N.Y. 2019)].

4. Blanket Ban on Leasing to Applicants with Criminal Arrests

Security Policy: A landlord adopts a blanket policy of refusing to rent to any applicant who has ever been arrested for a crime.  

Legal or Illegal?

Answer: Illegal.

Explanation: Excluding applicants based on a criminal record may be justified only when the person has actually been convicted of a crime; merely being arrested isn’t enough. As the HUD guidance explains, an arrest, on its own, is merely an accusation. To secure a conviction, the prosecution must prove guilt beyond a reasonable doubt. Accordingly, many people who get arrested are acquitted; others get their charges dropped and never go to trial.

The problem with arrest records is that they often don’t show how the case was decided and whether the individual was prosecuted, convicted, or acquitted of the charges. As a result, the HUD guidance concludes that an arrest is not a reliable basis for determining whether a particular individual poses a potential risk to safety or property.

Coach’s Tip: There may be some wiggle room for exclusion when a criminal background screening reveals an arrest, according to legal experts. What you can do is ask about the underlying facts of the case. And even if the arrest hasn’t yet resulted in a conviction or a conclusive and final finding of guilt, you may still be able to reject the applicant if:

• The applicant admits to committing a crime; or
• The police or other witnesses provide reliable and legally admissible information showing that a crime was committed.

5. Blanket Ban on Leasing to Applicants with Criminal Convictions

Security Policy: A landlord adopts a blanket policy of refusing to rent to any applicant who has ever been convicted of a crime.  

Legal or Illegal?

Answer: Illegal.

Explanation: While criminal conviction is the minimum standard, it’s not enough to justify rejection. That’s because all crimes aren’t the same. According to the HUD guidance, landlords must distinguish between criminal conduct that indicates a risk to tenant safety or property, and criminal conduct that doesn’t rise to that level. The guidance sets out the criteria landlords should use in making that distinction:  

Felonies vs. misdemeanors: Although the HUD guidance doesn’t expressly say this, the consensus is that the conviction must be for a felony rather than a misdemeanor. But, as the NYC landlord in the Jackson case discussed above learned, even a felony conviction isn’t automatic.

Type of felony: The landlord must also consider the nature of the felony. Based on case law, felonies justifying exclusion may include convictions for:  

• Illegal manufacture or distribution (but not mere possession) of drugs and other specified controlled substances;
• Sexual assault;
• Other violent crimes like homicide, assault and battery, domestic violence, robbery, and false imprisonment; and
• Arson, vandalism, and other crimes causing significant damage to property.

How long ago the felony was committed: The more recent the conviction, the greater the justification for considering the person who committed it a risk of danger to safety and property. Based on court cases, the unofficial window is seven years. Exception: Sexual assault convictions don’t have a shelf life and may be grounds for rejecting an applicant regardless of how long ago they occurred.

6. Anti-Substance Abuse Policies

Security Policy: A landlord bans tenants from possessing, using, and selling illegal drugs and abusing alcohol.

Legal or Illegal?

Answer: Legal.

Explanation: Tenant abuse of drugs and alcohol increases the risk of criminal activity, violence, fires, disturbances, and other threats. Rule: You’re allowed to implement anti-substance abuse policies as long as they’re not only necessary to ensure apartment community health, safety, and tranquility but also reasonable and nondiscriminatory. Rules generally recognized as legitimate include banning tenants from:

• Dealing, manufacturing, or distributing drugs or engaging in illegal drug-related activity;
• Keeping large quantities illegal drugs in their apartment;
• Using illegal drugs or being intoxicated in the common areas; and/or
• Allowing their families, visitors, or guests to commit any such violations.

The next five sections of the analysis will focus on where the lines are drawn.

7. Asking Applicants If They’ve Ever Used Illegal Drugs

Security Policy: A landlord includes the following question on its rental application form: “Do you use or have you ever previously used illegal drugs? If so, explain.”    

Legal or Illegal?

Answer: Illegal.

Explanation: Asking about past drug use is asking for fair housing trouble. That’s because former drug dependence or addiction is a disability and you’re generally not allowed to ask applicants if they have disabilities, unless such questions are directly relevant to their qualifications for housing reserved for persons with that particular disability. For example, a question about past drug use may be okay when screening applicants for housing reserved for recovering or recovered drug addicts.

8. Asking Applicants If They Currently Use Illegal Drugs

Security Policy: A landlord includes the following question on its rental application form: “Do you currently use illegal drugs? If so, explain.”    

Legal or Illegal?

Answer: Legal.

Explanation: Current drug addiction or dependence is not deemed a disability. The FHA Regulations (24 CFR §§100-202) say that it’s okay to ask questions to determine whether an applicant:

• Is a current illegal abuser or addict of a controlled substance; and/or
• Has ever been convicted of (but not simply arrested for) the illegal manufacture or distribution of a controlled substance.

Caveat: Be consistent. If you ask an applicant about drug use or convictions, you must ask all applicants the same questions. What you can’t do is pose these questions selectively, such as to applicants you suspect of having an addiction and/or to minority applicants. Thus, for example, asking Black applicants about current illegal drug use may constitute racial discrimination if you don’t ask white applicants the same questions.

DEEP DIVE

Excluding Current Users in States that Have Legalized Marijuana

Thirty-seven states and the District of Columbia have adopted laws allowing for the use of marijuana prescribed by a physician for designated medical uses. Use of recreational marijuana is also legal in 18 jurisdictions (Alaska, Arizona, California, Colorado, Connecticut, District of Columbia, Illinois, Maine, Massachusetts, Michigan, Montana, Nevada, New Jersey, New Mexico, Oregon, Vermont, Virginia, and Washington.). Question: Can you exclude a current marijuana user if the drug they use is legal in your state?

Answer: Yes, but only if the person is a recreational and not a medical marijuana user. 

Explanation: Although the FHA doesn’t specifically address the question, the legislative history that HUD, courts, and tribunals rely on to interpret it makes it clear that the exclusion of current illegal drug users doesn’t apply to individuals who use otherwise controlled substances that are legally prescribed by a physician. According to the official House Report, “the exclusion does not eliminate protection for individuals who take drugs defined in the Controlled Substances Act for a medical condition under the care of, or by prescription from, a physician.” The report adds that “use of a medically prescribed drug clearly does not constitute illegal use of a controlled substance.”

However, limits apply. For medical marijuana use to be protected:

• The marijuana must be legally prescribed by a physician for a medical condition authorized by the law;
• The person must use the marijuana only for the prescribed condition;
• The person must use the marijuana within their own apartment and not in common areas;
• The person may not possess (or cultivate) more than the maximum amount the law permits; and
• The person must not sell or distribute the marijuana to anybody else.

Recreational marijuana isn’t protected the way medical marijuana is. So, you may be able to exclude a person who uses legal marijuana for purely recreational purposes. But the laws are still not perfectly clear on this. So, you should talk to an attorney about how to apply your community drug rules if you live in a state where recreational marijuana has been legalized. 

9. Asking Applicants to Verify that They’re Not Currently Using Drugs

Security Policy: A landlord includes the following instruction on its rental application form: “Please furnish documentation to verify that you are not currently using illegal drugs.”    

Legal or Illegal?

Answer: Legal.

Explanation: Individuals who’ve recovered from previous drug dependence are protected from disability discrimination as long as they’re not using the stuff now. You may be entitled to ask applicants to verify that they’re currently clean. Such evidence may include verification from a:

• Reliable drug treatment counselor or program administrator that the applicant is or has been in treatment, complied with the terms of that treatment, and has a reasonable prospect of success in refraining from illegal drug use; and/or
•  Probation or parole officer that the applicant has met or is meeting the terms of probation or parole and isn’t currently a user of illegal drugs, and how long they’ve been clean.

Because rules differ by geography and type of housing provided, you should check with your attorney before requesting such evidence.

10. Asking Applicants about Alcohol Use

Security Policy: A landlord includes the following question on its rental application form: “Do you currently or have you ever previously consumed alcohol? If so, explain.”    

Legal or Illegal?

Answer: Illegal.

Explanation: Alcohol dependency is deemed a disability under the FHA, both former and current. Thus, while questions about current drug use may be allowed, questions about current alcohol use are not.

Questions You Can & Can’t Ask Applicants

Illegal Questions	Legal Questions
Have you ever used illegal drugs?   Have you ever been arrested for manufacturing or distributing illegal drugs?   Have you ever had a drinking problem?   Do you currently have a drinking problem?	Do you currently use illegal drugs?   Have you ever been convicted of manufacturing or distributing illegal drugs?   --   --

 

11. Excluding Persons with Drug/Alcohol Dependencies Who Pose a Direct Threat

Security Policy: A landlord seeks to evict a tenant who admits to being a drug addict for punching a security guard in the face and threatening a neighboring tenant with a loaded rifle.    

Legal or Illegal?

Answer: Legal.

Explanation: As noted above, the FHA ban on discriminating against persons with disabilities doesn’t cover individuals who pose a “direct threat” to other tenants. The challenge for landlords is determining whether the particular applicant or tenant with a drug or alcohol-related disability really does pose a direct threat. A joint statement from HUD and the U.S. Department of Justice (DOJ) emphasizes that subjective beliefs, generalized stereotypes, and speculation about substance abusers isn’t enough. The landlord’s determination must be based on an individualized assessment of “reliable objective evidence,” for example, about the disabled person’s current conduct, or a recent history of overt acts.

Example: A landlord evicted a tenant for engaging in erratic and dangerous behavior. The tenant admitted to urinating in the elevator, threatening to kill a neighbor, throwing a lit cigarette and coke can at the doorman, and other incidents. But he contended that the behavior was caused by his mental disorders and sued the landlord for disability discrimination. The Illinois state court tossed the discrimination complaint without a trial, finding that the landlord was justified in evicting the tenant for posing a direct threat. The appeals court concluded that the ruling was reasonable and refused to reverse it [Wirtz Realty Corporation v. Freund, 721 N.E.2d 589 (Ill. App. 1999)].

The HUD/DOJ joint statement explains how landlords should perform a direct threat assessment, saying that it must consider:

• The nature, duration, and severity of the risk of injury; and
• The probability that injury will actually occur.

In evaluating a recent history of overt acts, the landlord must take into account whether the individual has received intervening treatment or medication that has eliminated the direct threat. In such a situation, HUD/DOJ continue, the landlord may ask the individual to document how the circumstances have changed and why he or she no longer poses a direct threat. The landlord may also obtain “satisfactory assurances” that the individual won’t pose a direct threat during the tenancy.

12. Automatically Excluding a Person Who Poses a Direct Threat

Security Policy: After following the prescribed HUD/DOJ approach and determining that an individual does, in fact, pose a direct threat, the landlord automatically decides to reject or evict the person.

Legal or Illegal?

Answer: Illegal.

Explanation: Here’s where things get tricky. We know from court cases that the mere potential or threat of harm may be enough to constitute a direct threat, even if no actual harm is done. In other words, as long as the threat to other tenants is objective, severe, and real, landlords don’t have to wait until the dangerous person actually hurts somebody to invoke the “direct threat” exception.

Example: A Louisiana court ruled that a tenant with severe brain damage as a result of an automobile accident was a direct threat to other tenants based on his potential for harm rather than any harm he had previously inflicted, noting that the tenant engaged in altercations with other tenants, chased kids with a knife, listened to loud and vulgar music, and made inappropriate sexual comments [Foster v. Tinnea, So.2d 782].

The twist is that if the person poses a direct threat as a result of a disability, the FHA duty to make reasonable accommodations to the point of undue hardship kicks in. Result: Before deciding to reject or evict, you must consider whether there are any reasonable accommodations you can make to eliminate that direct threat. Potential accommodations could include:

• Separating the tenant in a location where he or she won’t pose a threat to other tenants;
• Requiring assurances that the tenant will receive treatment, medication, monitoring, or other management services, as well as verification from a healthcare provider, social worker, or other reliable third party that the treatment plan will be effective in eliminating the direct threat and the tenant will comply with its terms; and/or
•  Entering into a written accommodation agreement conditionally allowing a tenant to remain in the space, provided that he or she complies with all lease obligations and other specific requirements set out in the agreement and granting the landlord the right to terminate the agreement and evict immediately for failure to comply.

13. Excluding Individuals Because They’ve Been the Victim of Domestic Violence

Security Policy: A landlord adopts a zero-tolerance policy mandating automatic and immediate eviction of tenants who commit or allow others under their control to commit violent crimes in their apartments.

Legal or Illegal?

Answer: Illegal.

Explanation: On the surface, zero tolerance, a.k.a. “one strike,” policies are a justifiable measure for controlling risks of violence. They might even be required by local crime-free and nuisance laws. But in the context of fair housing, such policies are highly problematic. As HUD guidance notes, “zero tolerance policies, under which the entire household is evicted for the criminal activity of one household member” raise red flags of housing discrimination because of their disparate impact on women and other protected classes disproportionately impacted by domestic violence.

Example: Just 72 hours after fleeing her apartment to escape an assault from her ex-boyfriend, a Mississippi tenant received an eviction notice from her landlord for violating the community’s “zero tolerance” violence provision. HUD investigators determined that the zero-tolerance policy constituted disparate impact sex discrimination and charged the landlord with an FHA violation [HUD v. Escatawpa Village Associates, L.P., February 2012].

Bottom Line: Ensure that your leasing agents and managers understand that domestic violence victims aren’t radioactive and that denying them housing because of their involvement in domestic violence is tantamount to discrimination on the basis of sex and perhaps race and national origin as well. Yes, domestic violence is a form of criminal activity and you have an obligation to ensure the safety of your community. But you can’t treat the victims the same way you treat the victimizers. Period.

A common example is to reject applicants after learning they’ve been repeatedly assaulted by an intimate partner because you’re afraid the perpetrator will follow the victim to your own community.