Every landlord wants to protect their investment and ensure their communities are safe. However, it’s equally important to follow Fair Housing Laws — especially when considering applicants with criminal records. That said, landlords must take a careful approach in this situation to avoid discrimination while still protecting their property. Today, we’ll discuss what the law says, how to screen fairly, and the guidelines you must follow at both the federal and local levels.
Can You Refuse to Rent to Someone With a Criminal Record?
No, you typically cannot deny rental applicants with criminal records as the sole reason for rejecting their application.
As an Austin property manager or landlord, it’s essential to know who you’re renting to–which means you’ll likely do a background check. A background check can reveal a lot about a person, but the issue is how you use these results. For instance, you can’t apply a blanket “no one with any record” rule or deny someone housing based on an arrest that didn’t lead to a conviction. After all, just because someone has a record doesn’t mean they’re a bad person or will be a bad tenant.
However, at the same time, it is also important to protect your property and other tenants. So, you’ll want to make a decision that aligns with your own safety or property concerns. Look at the nature and severity of the offense, how long ago it happened, whether there’s a pattern, and what the applicant has done since. For instance, if they have steady employment, a clean rental history, references, and have completed all necessary programs, they could still be a good candidate.
When Can You Refuse to Rent to Someone?
Generally, you can only refuse to rent to someone if they don’t meet your screening criteria. For instance, if someone has a conviction that makes them a threat to your property, this may be grounds to deny them entry.
On a federal level, according to the Fair Housing Act, you can deny someone who has been convicted of the illegal manufacture or distribution of a controlled substance. However, that can even put you in a risky position when it comes to Fair Housing Laws. Outside of that specific scenario, it’s crucial to set screening criteria that align with the tenants you want living in your properties.
For example, you may set requirements and verify aspects such as minimum income, credit score, employment history, landlord references, and lease violations, among others. If a prospective renter doesn’t meet the requirements you have, you can deny their application. However, it’s crucial to use neutral language and apply it consistently to every applicant to avoid fair housing risk.
It’s important to note (although most landlords already know) that you cannot deny a person housing based on protected classes like race, color, religion, sex, gender identity, national origin, familial status, or disability.
What HUD Guidelines Mean for Landlords
The HUD doesn’t tell you to ignore criminal history. After all, background checks are an essential part of the tenant screening process, and handling rental applicants with criminal records can be tricky. Instead, they tell you to use a person’s criminal history carefully and narrowly to avoid discrimination.
That said, if you decide to consider convictions, you should show that your policy is fair, consistent, and nondiscriminatory. With that, it’s vital to assess each case the same way, looking at the nature and severity of the crime, time elapsed, evidence of rehabilitation, and rental history.
How to Screen Tenants Fairly and Consistently
As a landlord or property manager, you must screen all applicants fairly and consistently. Not only does this protect you from legal trouble, but it also helps you build a system that streamlines your rental process.
You’ll want to start by creating written screening criteria and applying them consistently across every rental applicant. Standard criteria may include:
Minimum Income Requirements- You could require applicants to make 3x the monthly rent to ensure they can meet payments each month.
Employment Verification- You may ask to verify an applicant’s employment with recent pay stubs.
Credit Score Expectations- Many landlords expect their tenants to have a certain credit score, usually a minimum of 600 to 650.
Positive Rental History- You’ll want to ensure your tenant has a good rental history, so ask if they’ve had prior evictions or get insight from their old landlords.
Valid References- Along with speaking with a tenant’s old landlord, you may want to ask for other references to get a good idea of who you’ll be renting to.
If a tenant meets your baseline criteria, then you can move forward with a criminal background check. With that, if you use a tenant-screening report or third-party service, you must follow the Fair Credit Reporting Act (FCRA). This means if you deny someone based on information found in the report, you must send them a written adverse-action notice, along with a copy of the report and their rights to dispute any inaccuracies.
Know Your Local Landlord-Tenant Laws
Handling rental applicants with criminal records can be tricky, and the laws and screening rules around it can shift quickly from city to city and state. So, it’s important to build policies that follow these standards, both federally and locally. Keep your criteria written, neutral, and apply them consistently across all applications you receive.
If you need help streamlining your rental process, whether it’s tenant screening, marketing property, collecting payments, or scheduling maintenance, reach out to a reliable property management team. Here at Stone Oak Management, we can help with all these things and more! Contact us today to learn more about our comprehensive rental management services.
