Department of Justice Sues Landlord Regarding Criminal Standards

By Mark Zinman | Zona Law

Fair housing complaints are on the rise and it’s important that AZREIA members understand all of the nuisances. It’s obvious that a manager should not discriminate based on a person’s skin color, but there are many more nuances that investors may not know. For example, did you know that blanket bans on anyone with a criminal record violate fair housing laws? That has been the standard since 2016 and it's important that landlords be aware of this protection, as such challenges are becoming more common.

On October 3, 2024, the Department of Justice announced that they had filed suit against a Missouri landlord under the Fair Housing Act for following blanket bans on felons. Since HUD published a memo on criminal standards in 2016, all landlords cannot have a blanket ban on felonies - they must take into consideration the nature of the crime and how long ago the crime occurred when considering it for screening purposes.

The suit alleges that a St. Louis apartment community “engaged in a pattern or practice of race and/or color discrimination against prospective Black tenants by banning tenants with any past felony conviction and certain other criminal histories, in violation of the Fair Housing Act.” According to the DOJ, "the defendants publicized and enforced a categorical ban on tenants with felony convictions and certain other criminal histories, regardless of how long ago the conviction occurred."

As mentioned above, in 2016, HUD published a memo stating that blanket bans on criminal history could constitute discrimination based on race. HUD stated that landlords should use a more calculated approach and only prohibit applicants when they have committed a crime that may be relevant to the property and was not a lifetime ban. In other words, HUD wants landlords to look at WHEN the crime occurred and the nature of the crime.

HUD also cited statistics that show that recidivism rates go to zero (meaning a low likelihood of the person recommitting a crime), seven years after someone has completed their sentence. Therefore, we generally suggest clients not look past 7 years when setting their criminal standards.

Also, landlords should look at the nature and extent of the crime. For example, felonies are more concerning than misdemeanors. Further, a felony for assault may be more relevant, and thus have a longer ban, than a person convicted of a DUI. A property management company should go through and ensure its policies take this type of detailed approach.

As always, just because the DOJ filed suit, doesn't mean that the landlord is liable. However, no one wants to be defending a lawsuit filed by the DOJ.