Anyone who believes that big government does not already intrude too far into the lives of the citizenry of the United States of America will be even more disgusted with the April 4, 2016 advisory opinion of the U.S. Department of Housing and Urban Development (HUD), where HUD most clearly provides felons more rights than non-felons under the Federal Fair Housing Act (the Act). That is right, the same Federal Agency that has allowed an ever growing, over-abundance of assistance animals into your no-pet, or otherwise restricted pet community has thrown us another curve ball aimed at further restricting the right of a community association to determine its newest residents.
Generally, the Act prohibits discrimination in the sale, rental, or financing of residences, and in other housing-related activities, on the basis of race, color, religion, sex, disability, familial status or national origin. As recently upheld by the United States Supreme Court, a claim for a violation of the Act based on “disparate impact” is permissible. Such a claim occurs where the application of a seemingly neutral policy or procedure has a discriminatory effect on a particular group of people on the basis of race, color, religion, sex, disability, familial status or national origin.
HUD’s most recent opinion begins by providing statistics such as “100 million U.S. Adults (1/3 of the population) have a criminal record of some sort, the prison population of 2.2 million is the largest in the world, 650,000 individuals are released from prison each year, and over 95% of those incarcerated will be released at some point. African Americans and Hispanics are convicted and incarcerated at rates disproportionate to their share of the general population.” Therefore, HUD reasons that criminal record-based barriers to housing are likely to have a disproportionate impact on minority home seekers.
On April 4, 2016, HUD issued guidance from its Office of the General Counsel regarding the application of the Act on the use of criminal arrests and convictions by housing providers, which includes community associations, to screen potential purchasers and renters. This guidance issued by HUD provides, in its conclusion, 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 disproportionately to burden African Americans and Hispanics. While the Act does not prohibit housing providers from appropriately considering criminal history information when making housing decisions, arbitrary and overbroad criminal history-related bans are likely to lack a legally sufficient justification. Thus, a discriminatory effect resulting from a policy or practice that denies housing to anyone with a prior arrest or any kind of criminal conviction cannot be justified, and therefore such a practice would violate the Fair Housing Act… Selective use of criminal history as a pretext for unequal treatment of individuals based on race, national origin, or other protected characteristics violates the Act.
In arriving at this conclusion, HUD discusses the three element standard by which criminal history-based screening provisions are evaluated:
1) Whether the Criminal History Policy or Practice Has a Discriminatory Effect: Under this element, an aggrieved person must show that the application of criminal history-based screening results in a disparate impact on a group of people based on their race or national origin. Typically, this is shown by the use of statistical data and is determined on a case-by-case basis.
2) Whether the Criminal History Policy or Practice is Necessary to Achieve a Substantial, Legitimate, Non-discriminatory Interest: A community association is responsible for promoting the health, safety, and welfare of its members. Most, if not all, board members would agree that keeping criminals out of their communities is in furtherance of this responsibility. However, in the event of challenge, HUD will require that the association present “reliable evidence that its policy or practice of making housing decisions based on criminal history actually assists in protecting resident safety and/or property.” As such, HUD will require an association to prove a negative, meaning an association will have to somehow show that its community is safer because its criminal-history based screening has kept the criminals out. How HUD expects an association to prove this remains a mystery.
3) Whether There Is a Less Discriminatory Alternative: In this final element, an aggrieved person must show that the association’s interest (established in the second element) could be served by a less discriminatory practice, meaning is there a way the interest can be met by further limiting and qualifying the use of criminal history information? HUD provides that these qualifying factors may include, “the facts or 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 or conduct; and evidence of rehabilitation efforts.”
An Exemption: A community association will not be liable under the Act for refusing a sale or lease to a person with a prior conviction for “drug manufacturing or distribution” regardless of any discriminatory effect it may create. Why? Because section 807(b)(4) of the Act does not prohibit conduct taken against a person who has done so. This exemption does not lend itself to mere “possession” crimes.
Practical Application of HUD’s April 4, 2016 Opinion: When drafting sales and leasing approval rights for an association, consider including a list of factors that “may” be considered. The word “shall” should be avoided to provide better decision making flexibility. As to convictions, to stay on the safer side of HUD’s latest opinion, boards of directors should only consider disapproving a sale or lease to recent convictions of only the most egregious crimes, otherwise known as crimes of moral turpitude, such as a felony involving violence to persons or property or a felony demonstrating extreme dishonesty. If your community’s governing documents assert an outright ban against approving a sale or lease for anyone with a criminal history, then such language should be amended as soon as possible.
Why HUD does not take into account the personal choices that led to the person’s incarceration will always be a mystery. We do not need HUD to go out of its way to protect the rights of convicted felons. What we need are criminal justice laws that make better sense.
Jeffrey Rembaum, Esq. of Kaye, Bender, Rembaum attorneys at law, legal practice consists of representation of condominium, homeowner, commercial and mobile home park associations, as well as exclusive country club communities and the developers who build them. He is a regular columnist for The Condo News, a biweekly publication and was inducted into the 2012, 2013 & 2014 Florida Super Lawyers. He can be reached at 561-241-4462.