Orlando Realtor Sued for Refusing to Rent to Felons

May 20, 2019 – An Orlando Realtor who operates as a property manager was talking to a potential renter recently who said he had a felony conviction on his record. The Realtor turned down the application, saying he “doesn’t rent to people with felony convictions.”

A few days later, that Realtor received a summons/lawsuit claiming discrimination.

“There’s nothing in the Fair Housing Act specifically denying a landlord the right to reject an applicant based on a prior felony conviction,” says Meredith Caruso, associate general counsel for Florida Realtors. “However a blanket policy to deny felons can have an indirect impact on minority populations (disparate impact), leading the U.S. Department of Housing and Urban Development (HUD) to issue a statement in 2016 regarding criminal backgrounds.”

According to a University of Georgia study – one of the few that looked at race and felony convictions – 8 percent of Americans have a felony conviction on their record. However, in the black community – the minority group the University of Georgia studied – 23 percent have a felony conviction, with the rate as high as 33 percent for adult males. The higher percentage results, in part, from an anti-drug crackdown about 30 years ago that focused on low-income communities.

Since some minority communities have a higher percentage of members convicted of a felony, HUD reasons, a blanket policy not to rent to felons has a disparate income on minorities. This “disparate impact” means a blanket policy against felony convictions violates the Fair Housing Act, according to HUD.

What can landlords do?

Things to consider when developing an in-house rental policy:

Overall impact: Does the policy have a disparate impact – an action that may not discriminate against a specific applicant yet still impact a group protected under the Fair Housing Act? Is there a distinct impact on a group of people because of their race or national origin, for example? HUD recognizes that this is fact specific; however, it points to several Department of Justice statistics showing that blanket denials based on criminal history have a significant impact on African Americans and Hispanics.
Justified policy: A housing provider must show that its screening policy is justified, which HUD defines as “necessary to achieve a substantial, legitimate, nondiscriminatory interest.” The policy can’t be speculative or hypothetical, meaning evidence must exist that supports the screening policy. While protection of other residents’ safety and their property may be considered, the housing provider must prove, through “reliable evidence,” that the policy serves that purpose.
Alternatives: Is a less discriminatory alternative available? Examples will depend on the details of the applicant’s background. However, HUD mentioned the length of time that has passed since an applicant’s conviction, a good tenant rental history before or after the conviction, and the circumstances surrounding the criminal conduct.

The National Association of Realtors® (NAR) offers additional screening information on its website.

Some landlord operating recommendations

Create a written policy with standards on how to evaluate all individuals and evaluate each individual on a case-by-case basis.
Document research done and decisions made on individuals, and periodically review the information to ensure the policy is a) being followed and b) not having an unintended discriminatory effect.
Delay evaluating an individual’s criminal record until after all financial and other qualifications have been met. This will help avoid any unintentional discriminatory effect and minimize costs and efforts.
Do not make decisions on individuals based on prior arrests that did not result in a conviction
Remove application questions that ask about arrests without convictions. While a landlord may ask about prior convictions, it should be clear that each applicant is evaluated on a case-by-case basis.
Because a blanket restriction against any particular conviction or all individuals with a criminal record will likely be viewed as having a discriminatory effect, evaluate each individual applicant on a case-by-case basis. Take into account mitigating and surroundings factors.
Do not apply criminal record policies or practices in an inconsistent manner. This may subject a housing provider to a claim of intentional discrimination.