CRIMINAL SCREENING KTS 2016 UPDATE

Kimball,Tirey&St.JohnLLP 

Legal Alert 

New HUD Guidance on Use of Criminal Background Checks 

April, 2016 

On April 4, 2016, HUD’s General Counsel released guidance for all housing providers (not just 
those who are HUD subsidized) regarding how the use of criminal background checks could 
potentially violate fair housing laws. If you are a Landlord and run criminal background checks as 
part of your screening process, it is important for you to become familiar with the guidance. 
Although this is HUD guidance, rather than law, it clearly outlines how HUD would analyze a fair 
housing complaint based on the use of criminal background checks to deny housing. 

The guidance focuses on “disparate impact” (discriminatory effect) discrimination. Disparate impact 
occurs when a landlord has a policy or practice that is neutral (i.e., non-discriminatory) on its face 
and applies equally to all applicants and/or residents, but its application has a discriminatory effect 
on one or more of the protected classes. In order to successfully defend a claim of discrimination, 
the landlord must be able to show that this policy or practice is necessary in order to achieve a 
non-discriminatory business objective, and that there is no less discriminatory alternative that 
would achieve that business objective. 

The HUD guidance states that due to the higher than average incarceration rates among certain 
races (Hispanics and African Americans) in the United States relative to their percentage of the 
total population and when compared against the incarceration rates of non-Hispanic Caucasians, 
the use of criminal history to deny housing can cause a disparate impact on these particular races. 
Therefore, if Landlords want to use criminal background checks as part of their rental criteria, they 
have the burden to show: (1) it is necessary to use criminal background checks in order to achieve 
a non-discriminatory business objective and; (2) there is no less discriminatory alternative. (The 
“business objective” would presumably be the protection of resident safety and/or property. 
However, the guidance states that the business objective cannot be prospective in nature. The 
landlord must prove that the use of the criminal background checks actually accomplishes the 
business objective.) 

The HUD memo goes on to state that in order to meet this burden when a Landlord’s policy has a 
disparate impact, Landlords must consider the following: 

1) 
Arrest Records: HUD states that landlords should not use arrest records as a basis for 
excluding applicants. According to HUD’s General Counsel, an arrest which does not lead 

Kimball, Tirey and St. John LLP is a full service real estate law firm representing residential and commercial 
property owners and managers. This alert is for general information purposes only. Laws may have changed 
since this article was published. Before acting, be sure to receive legal advice from our office. If you have 
questions, please contact your local KTS office. For contact information, please visit our website: www.ktslaw.
com. For past Legal Alerts, Questions & Answers and Legal Articles, please consult the resource library 
section of our website. 

© 2016 Kimball, Tirey and St. John LLP 

.
to a subsequent conviction does not prove that an individual engaged in illegal activity. 
Therefore, the use of arrest records would not provide information regarding whether the 
applicant who was arrested would be a threat to the safety of other residents or their 
property. 

2) 
Prior Convictions: Although prior convictions are sufficient evidence to prove that an 
individual engaged in criminal conduct, HUD’s General Counsel states: “A housing provider 
that imposes a blanket prohibition on any person with any conviction 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 this burden.” 

In other words, according to HUD’s General Counsel, if a landlord is going to use criminal 
records as part of the screening criteria, the policy must be narrowly tailored. The guidance 
goes on to state that even then a landlord would still need to prove that this “tailored” policy 
is necessary to serve a “substantial, legitimate, nondiscriminatory interest.” In order to do 
this, a landlord must be able to show that its “tailored” use of criminal background checks 
“accurately distinguishes between criminal conduct that indicates a demonstrable risk to 
resident safety and/or property and criminal conduct that does not.” 

So what does this all mean? Can Landlords take into account the criminal background of 
applicants as part of their screening criteria without violating fair housing laws? This latest HUD 
guidance does confirm that there is one “safe harbor” available to landlords: If a landlord uses 
criminal background checks and only excludes applicants who have been convicted of the illegal 
manufacture or distribution of a controlled substance, a landlord will not run afoul of fair housing 
laws. This is because the Fair Housing Act specifically states that landlords do not have to make 
housing available to persons with such a conviction. The guidance warns, however, that the 
exclusion is only for manufacture or distribution (making or selling) controlled substances and does 
not extend to other drug-related crimes such as use or possession. 

What if a landlord wants to exclude applicants who have been convicted of other crimes? Will it be 
considered a fair housing violation? Other than the safe harbor addressed above, the HUD memo 
does not specify what types of criminal convictions would warrant a denial to rent. However, the 
HUD guidance does provide some general guidelines which landlords must consider if they choose 
to go beyond denial of applicants convicted of illegal manufacture or distribution of controlled 
substances: 

1) 
Nature of the Conviction: The guidance states that a landlord who wants to use criminal 
background checks must take into account the “nature and severity” of an individual’s 
conviction. For example, the landlord should consider the exact crime and how severe it 
was. Moreover, the landlord should consider whether the fact that the applicant engaged in 
this particular type of criminal activity means this applicant will be a greater risk to resident 
safety and/or property. This closer scrutiny that HUD is requiring means that landlords 
should avoid blanket restrictions such as a policy that excludes all applicants who have any 
felony conviction. 

2) 
When the Criminal Activity Occurred: The guidance also states that a landlord who 
screens for criminal history must take into account how long ago the criminal activity 

Kimball, Tirey and St. John LLP is a full service real estate law firm representing residential and commercial 
property owners and managers. This alert is for general information purposes only. Laws may have changed 
since this article was published. Before acting, be sure to receive legal advice from our office. If you have 
questions, please contact your local KTS office. For contact information, please visit our website: www.ktslaw.
com. For past Legal Alerts, Questions & Answers and Legal Articles, please consult the resource library 
section of our website. 

© 2016 Kimball, Tirey and St. John LLP 

.
occurred. According to HUD’s general counsel, there is “criminological research” which 
shows that over time, “the likelihood that a person with a prior criminal record will engage in 
additional criminal conduct decreases until it approximates the likelihood that a person with 
no criminal history will commit an offense.” In other words, crimes that occurred a long time 
ago should be considered less relevant as compared to more recent crimes (and possibly 
not considered at all). So how far back should a landlord look? Could a landlord safely 
consider a crime that took place 5 years ago? 10 years ago? Unfortunately HUD offers no 
guidance on this question. It is left up to the landlord to be able to defend whatever policy 
they choose to implement. 

3) 
Individualized Assessment: The HUD memo goes on to state that not only do Landlords 
need to narrowly tailor their use of an applicant’s criminal history, but they must also show 
that this narrowly tailored policy has the least possible discriminatory affect. In order to 
accomplish this goal, HUD recommends that Landlords conduct an “individualized 
assessment” of each applicant, considering “relevant mitigating information” such as; (1) 
the facts or circumstances surrounding the criminal conduct; (2) the age of the individual at 
the time the conduct occurred; (3) evidence that the individual has maintained a good 
tenant history before and after the conviction or conduct; (4) and evidence of rehabilitation 
efforts. 

Finally, the guidance states even if a Landlord’s use of criminal background checks is narrowly 
tailored by taking into consideration the nature and severity of the crime, the length of time since 
conviction occurred, and where individualized assessments are carried out, a Landlord “will still 
bear the burden of proving that any discriminatory effect caused by such policy or practice 
[involving the use of criminal background checks] is justified.” 

Based on this guidance from HUD, the only sure way a Landlord can avoid fair housing liability if 
he/she wants to consider an applicant’s criminal history is to limit the policy to exclude only 
applicants with prior convictions for illegal manufacture or distribution of controlled substances.1 If a 
landlord wants to deny an applicant for any other convictions, the landlord must be able to prove 
that the particular policy is necessary in order to achieve a substantial, legitimate, nondiscriminatory 
interest, and that there is no less discriminatory way to achieve this interest. 

Our Fair Housing Practice Group has a detailed opinion letter on criminal background checks. 
Please contact us today at (800) 338-6039 for more information or to purchase this opinion letter. 

1 Note that project-based HUD subsidized properties must also prohibit admission to sex offenders subject to a 
lifetime registration requirement under state government’s sex offender registration program or to individuals found 
to have manufactured or produced methamphetamine on the premises of federally assisted housing. 

Kimball, Tirey and St. John LLP is a full service real estate law firm representing residential and commercial 
property owners and managers. This alert is for general information purposes only. Laws may have changed 
since this article was published. Before acting, be sure to receive legal advice from our office. If you have 
questions, please contact your local KTS office. For contact information, please visit our website: www.ktslaw.
com. For past Legal Alerts, Questions & Answers and Legal Articles, please consult the resource library 
section of our website. 

© 2016 Kimball, Tirey and St. John LLP