Anaheim Property Management Blog

Say No to “No Felons”

Say No to “No Felons”

It is tempting to think that an owner can deny a tenant approval for their rental simply due to the tenant’s criminal history.  Unfortunately, the answer is both “yes” and “no”.  

Fair Housing laws

Unequivocally and categorically it is against Fair Housing laws to deny an applicant only because of their criminal history, but an owner can deny an applicant once they are aware of the criminal history and the crime committed may not make the applicant a proper tenant.  For example, if the crime committed included bounced checks or violence against another person, an owner would have good grounds to deny the applicant.  But if the crime were transporting marijuana or stealing a vehicle, an owner may be obligated to deny based on insufficient income or poor credit. 

It is against federal housing laws to state “No Felons” or “No Criminal History Allowed”.  

The first time fine for denying solely for this reason may be up $21,039, and that excludes attorney fees, and potentially hefty legal costs.  To add insult to injury, the owner may still may be obligated to lease the property to the person with the criminal history.

According to the US Department of Housing and Urban Development (HUD), as many as 100 million United States adults, or one-third of the total adult population, have a criminal record of some sort.  And since 36% of the total prison population are African American, denying simply because of this fact is considered “disparate impact”, meaning it adversely impacts one race or nationality more than another since African Americans only comprise 12% of the general population.

The best policy is to have clear qualifying guidelines before your property is marketed for lease.  

State the minimum gross income acceptable, minimum credit score, whether prior evictions are acceptable and if pets are allowed.  Government agencies are actively using “testers” who ask owners and management companies basic fair housing questions such as “is someone with a criminal history eligible to lease the property” or “how many family members may live in the property” and if you give the wrong answer you can expect a quick response and fine.

There are a myriad of local, state and federal tenant laws and this is just one of them.  If you want to better protect your valuable investment, it may be time to hire a property management professional.