Slow & Steady Wins the Race… Against HUD Litigation


hud complianceThe tortoise beating the hare. Not only Bugs Bunny’s big debut, but a story that teaches a valuable lesson. In some aspects of life, speed is not the best measure. One of these aspects is deciding who is and is not able to rent one of your properties. Nobody wants a bad tenant. However, much worse than that, nobody wants a lawsuit.

In April 2016, the U.S. Department of Housing and Urban Development (HUD) issued new guidance on how an applicant’s criminal background should play into a property managers decision on whether or not to let this individual live in one of their properties.

Fair House Act

Here is a little background on the Fair Housing Act. This act is Title VIII of the Civil Rights Act of 1968. It was intended to protect the buyer or renter of a dwelling from discrimination from a seller or landlord. When it was first passed, discrimination on the basis of race, color, religion, and national origin was determined to be illegal. Gender discrimination was added in 1974, and disability and familial status were then added in 1988. In April of 2016, HUD decided to add further guidance, as they believe the use of criminal backgrounds has had far reaching disparate impact on the minority community.

Disparate Impact

For those of you that know this term, I applaud you. Many people that we come across have never heard of it. It refers to practices in employment, housing, and other areas that adversely affect one group of people of a protected characteristic more than another, even though rules applied by employers or landlords are formally neutral. For example, compared to Caucasians, there are 4x as many African-Americans under correctional control, and 2x as many Hispanics. This can make it exceedingly difficult for these protected groups to find housing if property managers are making quick, surface level decisions based on a quick criminal check. Without the proper procedures in place to consider the conviction relevance, this could be problematic.

Barrier to Arrest Records

As you could imagine, many people wanted further clarification on this guidance. HUD came out and stated that arrest records may be the basis for denying admission, terminating assistance, or evicting tenants from public and other federally-assisted housing. HUD will use this 3-step process below to try and shift the burden onto you.

Arrest Records

The million-dollar question is: how can property managers protect themselves from allegations and lawsuits?

Protect Yourself

ryan-grewell-95001Here is where that tortoise had the right idea. It will be awfully hard to keep the burden off of you if you are receiving a quick criminal records check and basing your decision off of that. One way to avoid this is utilizing an Individualized Assessment. This gives you the ability to look into the crime and talk to the applicant about what happened, and how the rehabilitation efforts proceeded. It would also be wise to look into the past places they have lived to see what kind of tenant they are, and potentially compare it to how they behaved prior to conviction.


Today’s world is fast paced, and we understand this. We also understand your need to fill up your properties as quickly as you can. However, we must stress patience when it comes to criminal checks,. Nobody wants to spend their days talking with lawyers and sitting in a court room. Unfortunately, with more and more states becoming increasingly tenant friendly, that could be the future sooner than you may think. Make sure your background screening provider has your best interest in mind. Property managers need to be able to rely on their tenant screening solution to empower them to make an effective and informed decision while maintaining maximum compliance with regulations.

The steps outlined in this blog only reflect an abbreviated view of the HUD enforcement activity relative to a property manager’s use of criminal records in the selection process. For more information about federal housing discrimination and similar state laws, please consult with your legal counsel.

To view a complete copy of the HUD guidance, please click here. To discuss further with us, please contact us.

 About the Author

Mark Manolakis graduated from Western New England University in 2015 with a BSBA. He specialized in Marketing and Economics. He currently holds the SAFC – I FCRA Certification. If you have any questions for Mark feel free to contact us.


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