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Do Property Managers Discriminate Against Applicants?

Do Property Managers Discriminate Against Applicants?

This article was posted June 6, 2012 by Ryan Green. We had an article posted on our site earlier to be on the lookout for this subject below! I though I would paste this on here for others to read!

“Property managers who use eviction records in the application screening process are discriminating against their applicants!”

This, according to a Fair Housing presentation last month in Tacoma, Washington, during which the most prevalent point made, was that a higher percentage of minorities have prior evictions and therefore, referencing eviction records in the approval criteria may lead to discrimination.

The use of eviction records is meant to be an objective method of qualifying an applicant as a good candidate for a property because, as we all know, using subjective information in the rental decision opens the door to fair housing violations such as discrimination allegations. What needs to be kept in focus is a balance between protecting your property, your current tenants and staff, and the applicants themselves.

The purpose of eviction records is not to discriminate against any particular protected class of people, but to protect your property against individuals who show a factual history of not meeting their prior lease agreements. When requesting an eviction search, it is vital to keep these key factors in mind before making a rental decision:

  • The date of the judgment: Per the FCRA, §605 – civil suits, civil judgments, and records cannot be taken into account in the rental decision if they are older than 7 years or until the governing statute of limitations has expired. Whichever period is longer.
  • The number of records returned: A single offense may be the case of circumstance and should be reviewed while a consistent list of offenses may point to a much larger problem.
  • The information contained in the record: Any system that returns instant results has the potential for error. Verify that what you receive matches other information provided by your applicant or other areas of their tenant screening report. If you are not 100% certain, consult the agency that provided the information and ask for additional research.

Eviction DiscriminationFollowing these guidelines when pre-qualifying a person to live in your community can be essential to protecting all parties involved. It is illegal to disqualify an applicant based on race, color, religion, national origin, sex, disability or familial status, which is why processes that are blind to these factors were established in the first place. Eviction reporting is a fact based system to provide fair and equal housing to people of all backgrounds while still protecting you and your community.

 
This comment was minimized by the moderator on the site

Use of eviction records is on its face a neutral practice - as long as it is done consistently. A discrimination claim can be brought, however, if a plaintiff can establish (statistically) that the practice has a disproportionately negative impact on protected groups.

Assuming for a moment that a protected individual is able to establish that use of eviction data for tenant screening purposes has a disparate impact (no easy task!!) - the defendant (landlord) then has an opportunity to prove business necessity - an affirmative defense.

Few would argue... or at least argue successfully... that an eviction judgment (in favor of the landlord) - is not relevant to a subsequent tenancy - any more than they could argue the credit standing is not relevant for tenant screening purposes.

Eviction filings (alone) are another matter - as are old judgments - from more than 7 years ago for example - in the sense that the court will be less likely to buy in to the business necessity argument if an individual has been clean for a long time.

The question for us as landlords is... how do we strike the proper balance between adequately vetting prospective residents (a right and obligation) and making ourselves a target for disparate impact discrimination claims.

You may wish to consider the following:

1. Limit consideration to eviction judgments in favor of the plaintiff.
2. Ignore such judgments that are more than seven years old. Screening companies are prohibited from reporting records over 7 years old. 7 years is an arbitrary number, but one with some precedent - at least in consumer reporting law.
3. Consider only records that are confirmed matches. Hard to argue the business necessity of bogus data! Understand your screening company's public records search (and matching) methodology.
4. Use eviction filings only to inform the rental verification process... meaning while it may be risky to lean on filings for your decision... using those filings to...

Use of eviction records is on its face a neutral practice - as long as it is done consistently. A discrimination claim can be brought, however, if a plaintiff can establish (statistically) that the practice has a disproportionately negative impact on protected groups.

Assuming for a moment that a protected individual is able to establish that use of eviction data for tenant screening purposes has a disparate impact (no easy task!!) - the defendant (landlord) then has an opportunity to prove business necessity - an affirmative defense.

Few would argue... or at least argue successfully... that an eviction judgment (in favor of the landlord) - is not relevant to a subsequent tenancy - any more than they could argue the credit standing is not relevant for tenant screening purposes.

Eviction filings (alone) are another matter - as are old judgments - from more than 7 years ago for example - in the sense that the court will be less likely to buy in to the business necessity argument if an individual has been clean for a long time.

The question for us as landlords is... how do we strike the proper balance between adequately vetting prospective residents (a right and obligation) and making ourselves a target for disparate impact discrimination claims.

You may wish to consider the following:

1. Limit consideration to eviction judgments in favor of the plaintiff.
2. Ignore such judgments that are more than seven years old. Screening companies are prohibited from reporting records over 7 years old. 7 years is an arbitrary number, but one with some precedent - at least in consumer reporting law.
3. Consider only records that are confirmed matches. Hard to argue the business necessity of bogus data! Understand your screening company's public records search (and matching) methodology.
4. Use eviction filings only to inform the rental verification process... meaning while it may be risky to lean on filings for your decision... using those filings to identify and reference undisclosed tenancies is profoundly reasonable.

Paul Prudente
Moco Inc

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  Paul Prudente
This comment was minimized by the moderator on the site

In our state, we have a judical case records website with eviction filing records. I learned a long time ago these records are not all evictions, just eviction filings. I compare them to the information I receive on the application to verify residency listed on the application. I have caught too many applicants providing false information on their residency by using these records.

Last month, I verified rental history from a landlord. He said the applicant was never late. On the eviction record with her credit report, she had a current eviction filing and two previous ones from the same address within the past year.

When I called the landlord back, he admitted he was busy and didn't actually look up her records. He said she was a nice tenant and he was trying to help her.

I agree that they key is consistency. These records have been vital in my screening process.

  Sandy Martin

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