Instant Tenant Screens?


The paradigm shift of property managers utilizing instant applicant screening

With new guidance from the Department of Housing and Urban Development (HUD) for compliance with the Fair Housing Act (FHA), instant applicant screens are coming under fire.

HUD’s guidance has pointed out how a mismanaged background screening process can have an unintentional discriminatory effect on applicants. With the utilization of instant background checks, property managers put themselves at risk of disparately impacting protected classes and therefore violating the FHA. Housing providers should avoid bright line disqualifications of applicants and instead adopt a policy based around individualized assessment while weighing conviction relevance.

To determine whether or not a housing provider’s screening policy has a discriminatory effect on a protected class, HUD will apply a three step, burden-shifting framework to analyze the housing provider’s use of criminal history to deny applicants.

How can housing providers avoid costly litigation?

First and foremost it is important for a housing provider to develop a comprehensive written policy specifying how criminal records will be considered. The policy should aim to weigh conviction relevance so that property managers can accurately assess risks while minimizing the possibility of discrimination. To do so the policy should avoid an automatic exclusion of applicants simply due to the presence of a criminal record and instead consider which types of offenses pose a legitimate threat.

To assist, housing providers can recruit the skills of an expert background screening team to provide further recommended individualized assessment of applicants. A Proper screening solution should offer the ability for a case-by-case review to seek additional information pertaining to the applicant’s criminal history. Such a review could provide information on the circumstances surrounding the conviction that would otherwise be missed by an instant screen.

While instantaneous background checks offer fast decision making to secure lessees, they also open the door to costly litigation and negative press. Often property managers are taken by the allure of an instant background check, only to be dumped with a pile of information and little direction on how to analyze it. Property managers should be able to rely on their screening solution to enable them to make an effective and informed decision while maintaining maximum compliance with regulations.

For further information on the topic, Background Decision’s team of experts have developed a comprehensive Whitepaper detailing HUD’s Guidance for property managers to avoid costly FHA violations which can be accessed here.