Hello everybody.  AOA members may recall my discussion of age discrimination in the February 2015 issue of this magazine entitled “Discrimination Against Children: Traps and Pitfalls.”  As I explained in that article, there are two types of age discrimination under California law:  those acts that intentionally discriminate and those which have an adverse disparate impact on minors or adults. 

Intentional discrimination based on age is obvious, such as buildings that will only rent to adults. 

Discrimination based on adverse disparate impact is nebulous, but it means that even if the landlord’s practices are intended to be neutral and not designed to discriminate, they nevertheless would have a disproportionate effect on persons based on their age.  For example, a lease which provides that no person is allowed to play with dolls in the outdoor common areas of the property would result in disparate treatment of children (and probably more so of girls than boys) because adults rarely play with such toys.

Expanding the traditional areas of unlawful discrimination under federal law (such as, race, color, religion, sex, disability, family status, and national origin), on April 4, 2016 the United States Department of Housing and Urban Development (i.e., HUD) issued a Fair Housing Act guidance report curtailing the use of criminal records to disqualify an applicant from renting a vacant apartment. 

Rejection Based on Prior Arrests

HUD asserts in the report that an apartment building policy which disqualifies a tenant applicant because of one or more prior arrests but which did not result in a conviction is unlawful discrimination.  Just because a person has been arrested has little effect, if any, on showing that he or she was engaged in any misconduct, says HUD.  According to HUD, an arrest reveals nothing more than some other person probably suspected that the apprehended individual committed an offense. 

Because arrest records do not constitute proof of past unlawful conduct and are often incomplete (as they may fail to indicate whether the individual was prosecuted, convicted or acquitted), the fact of an arrest is not a reliable basis upon which to assess the potential risk to the safety of other residents in the building, HUD explains. 

HUD concludes by saying “A housing provider who denies housing to persons on the basis of arrests not resulting in conviction cannot prove that the exclusion actually assists in protecting residents’ safety and/or property.”

As a practical matter, arrest records are rarely included in tenant background checks.  The credit reports AOA arranges for the members do not contain arrest incidents, nor should they.

With respect to arrests, the bottom line is that if an owner or management company learns that an applicant for a vacant unit was arrested, but does not know whether or not there was a conviction, he/she should ignore the arrest report when making a decision whether or not to rent to the applicant. 

Rejection Based on Prior Convictions

In most instances, a conviction will serve as sufficient evidence to prove that an individual engaged in criminal conduct.  But according to HUD, housing providers that apply a policy that excludes persons with prior convictions must still be able to establish that such a practice is “necessary to achieve a substantial, legitimate and nondiscriminatory interest of the provider.” 

HUD says that a housing provider who imposes a blanket prohibition on any person with a criminal record – no matter when the conviction occurred, what the underlying conduct entailed, or what the convicted person has done since then – will be unable to meet that burden. 

Thus, an owner or management company who rejects a tenant applicant because of a criminal conviction must be able to show that its policy actually distinguishes between criminal conduct that indicates a demonstrable risk to the safety of other residents and/or property, and criminal conduct which does not.

HUD does not give any specific examples of what would be a valid conviction to decline a tenant applicant, but it seems safe to say that even HUD would agree that an applicant who was recently convicted of a felony for burglary, robbery, assault, rape, child molestation, or other similar insidious conduct may be rejected.

On the other hand, if a decade ago the applicant walked his dog without a leash in a public park on multiple occasions which resulted in several misdemeanor convictions (and perhaps one rising to the level of a felony on the last occurrence), it seems that those convictions would not be sufficient grounds to reject an applicant.  Convictions falling somewhere in the middle of the continuum of unlawful conduct of walking a dog without a leash to a violent personal attack will be problematic.

Therefore, HUD requires that the housing provider give individual attention to other factors before rejecting the applicant, such as:  circumstances surrounding the criminal conduct, the age of the individual at the time of the conduct, evidence that the individual has maintained a good tenant history before and/or after the conviction, and evidence of rehabilitation efforts.

One exception which HUD acknowledges is that the Federal Housing Act does not prohibit rejection of a tenant applicant based on a criminal conviction who has been convicted of the illegal manufacture or distribution of various controlled substances.  However, a conviction for drug possession itself is not necessarily sufficient grounds to reject an applicant, according to HUD. 

HUD’s Underlying Rationale

Even if the housing provider has a legitimate interest in not renting to an applicant based on a given criminal conviction, HUD does not make the law quite that simple to justify rejection.  HUD says that if the type of conviction would have an unjustified discriminatory effect because of color, race, national origin or other federally protected characteristics, rejection based on the conviction may be barred. 

In other words, as with unlawful disparate impact discrimination against persons who play with dolls (namely children), rejecting applicants for reasons that end up applying predominantly to African Americans and Hispanics is also unlawful, according to HUD.

HUD explains that because of widespread racial and ethnic disparities in the U.S. criminal justice system, criminal history-based restrictions on access to housing are likely to disproportionately burden African Americans and Hispanics. 

Thus, while the Fair Housing Act does not prohibit housing providers from appropriately considering criminal background information when making housing decisions, “arbitrary and overbroad” criminal history-related bans are likely to lack a legally sufficient justification.  

HUD concludes by explaining that a discriminatory effect resulting from a policy that denies everyone with a specific kind of criminal conviction cannot just be automatically justified.  The housing provider must take into account whether the type of conviction would have a general disparate impact on persons because of their color, race, national origin and other such characteristics.  (In my opinion that is an absurd requirement because owners and management companies are not qualified to determine the impact on society as a whole.)

HUD says that policies that exclude persons based on criminal history must therefore be tailored to serve the housing provider’s substantial, legitimate, nondiscriminatory interest and take into consideration such factors as the type of the crime and the length of time since conviction.  Where a policy excludes individuals with only certain types of convictions, the provider will still bear the burden of proving that any discriminatory effect is justified. 

RECOMMENDATIONS

In view of HUD’s newly published guidance report, here are my recommendations: 

  • When evaluating a tenant applicant, disregard arrest records that do not lead to convictions.
  • Evaluate each reported conviction carefully as to the specific applicant.  If it was a misdemeanor or a minor felony from long ago, rejecting an applicant based on that conviction may not actually serve a legitimate purpose for the landlord.  HUD (and the judicial system) might construe it to be merely a pretext to turn away a person that the housing provider does not like because of that applicant’s color, race, national origin or other protected characteristics.
  • Evaluate whether the nature of the conviction will have any likely adverse affect on the safety or security of any other resident or any property at the apartment complex.  If so, then the provider is probably safe in rejecting the applicant.  If not, then refusing the applicant would probably violate HUD’s guidelines as well as California’s own antidiscrimination laws.
  • Reject any convicted child molester or sex predator.  But even then, at least first evaluate whether you think that tenant applicant would pose a threat to children who may be present on the property. 

Special Note to Owners With Properties In the City of Hesperia

If you are an owner or property management company of any residential rental property in the City of Hesperia, regardless of whether it is a single family home or multifamily tenement, be aware that the City passed an ordinance effective January 1 this year regulating who you can rent to.  In other words, they will help you with what they consider to be lawful discrimination, but you may consider that to be an inappropriate intrusion on the operation of your own business.

As a Hesperia property owner or management company, you are now required to perform a national criminal background check of your prospective adult tenants prior to leasing or renting.  In addition, you are required to submit certain information to the Hesperia Sheriff’s Station to determine if your prospective adult tenant applicant has previously violated any rules of Hesperia’s Crime Free Rental Housing Program. 

The Sheriff’s Department will then issue a determination which you may use at your “discretion” when deciding whether to rent or lease to the prospective tenant. 

If you fail to register your property with the tenant screening program or otherwise participate in it, you are subject to fine of $350.00 per single-family residence and $50.00 per unit for multifamily complexes.

Also, you are required to attach to your rental agreement the City’s Crime Free Lease Addendum.  Failure to do so will result in a fine of $250.00.

To learn more about the City’s requirements, review the website:

www.cityofhesperia.us/crimefree

In conclusion, even if you believe Hesperia’s requirements are an unfair or unconstitutional intrusion into your personal business, the ordinance is now law and you need to comply with it, at least until some future time as a court rules that it is unenforceable. 

 Dale Alberstone is a prominent litigation and transactional real estate attorney who has specialized in real property law for the past 39 years.  He has been appointed to periodically serve as a judge pro tem of the Los Angeles Superior Court and is a former arbitrator for the American Arbitration Association.  He also testifies as an expert witness for and against other attorneys who have been accused of legal malpractice.

Mr. Alberstone has been awarded an AV rating from Martindale-Hubbell.  An AV rating reflects an attorney who has reached the heights of professional excellence and is recognized for the highest levels of skill and integrity. You may Google “Dale S. Alberstone” for further background.          

The foregoing article was authored in May 2016.  It is intended as a general overview of the law and may not apply to the reader’s particular case.  Readers are cautioned to consult an advisor of their own selection with respect to any particular situation.

Questions of a general nature are warmly invited.  Address correspondence to Dale S. Alberstone, Esq., ALBERSTONE & ALBERSTONE, 1900 Avenue of the Stars, Suite 650, Los Angeles, California 90067.  Phone:  (310) 277-7300.