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Overview of New DFEH Fair Housing Regulations – Criminal Records

by | May 12, 2023 | Agent Liability, Arbitration, Mediation and Liquidated Damages, BLOG 10.24, Fair Housing

BROKER RISK MANAGEMENT

WEEKLY PRACTICE TIP

 

(This is the third in a series of Practice Tips on Fair Housing Laws and Regulations.)

 

QUESTION:  I understand that there have been some changes to the Fair Housing laws in California.  When and under what circumstances can a Landlord use a Tenant applicant’s criminal history when deciding to accept or reject a tenant?  What should I tell my clients who want information about this issue?

Answer:  This is a difficult question that requires a lengthy answer.  This Practice Tip will focus on state-wide regulations, but it is important to note that the state regulations do not preclude a local jurisdiction from imposing stricter requirements.

THE BASICS:

The California Department of Fair Housing and Employment (“DFEH”) has issued regulations regarding use of criminal records by Landlords.  Under those regulations, Landlords cannot have a blanket ban against renting to any person with a criminal record.  For example, it is a violation of the law to refuse to rent a property to someone because they have a felony conviction.

Also, there are some types of criminal history that Landlords cannot use in making decisions about whether to rent to an applicant.  For example, they cannot consider a prior arrest that did not lead to a conviction, or convictions that have been sealed or expunged.

If a Landlord has a screening process, which includes reviewing criminal backgrounds, they can only deny housing if the applicant’s specific crime is a demonstrable risk to other residents or the property based on objective evidence.   For example, if a property is located next to a school, a Landlord may consider a conviction for a sexual assault offense or a crime against children.

LANDLORDS MUST CONSIDER THE APPLICANT’S PARTICULAR CIRCUMSTANCES:

In considering the criminal records of a Tenant applicant, Landlords must consider the applicant’s particular circumstances (i.e., “mitigating circumstances”).  For example, is the applicant still a risk given time, rehabilitation, or history?  Was the background report incorrect?  Were there extenuating circumstances such as domestic abuse?

WHAT MITIGATING INFORMATION SHOULD BE CONSIDERED BY A LANDLORD WHEN CONSIDERING AN APPLICANT’S CRIMINAL RECORD INFORMATION?

Mitigating information means credible information about the applicant that suggests:  (a) the applicant is not likely to pose a demonstrable risk to other residents or the property; and (b) what a reasonable person would believe is true based on the source and content of the information.  Mitigating information includes:

  1. Whether the individual was a minor or young adult at the time of the conduct upon which the criminal conviction is based;
  2. The amount of time that has passed since the date of conviction;
  3. Evidence that the individual has maintained a good Tenant history before and/or after the conviction;
  4. Evidence of rehabilitation efforts, including a person’s satisfactory compliance with all terms and conditions of parole and/or probation; successful completion of parole, probation, mandatory supervision, or other conduct demonstrating rehabilitation, such as maintenance of steady employment;
  5. Whether the conduct arose from the individual’s status as a survivor of domestic violence, sexual assault, dating violence, stalking, or comparable offenses against the individual;
  6. Whether the conduct arose from the individual’s disability, or any risks related to such conduct, which could be sufficiently mitigated or eliminated by a reasonable accommodation; or
  7. Other relevant facts or circumstances regarding the criminal conduct or conduct after the conviction.

LOCAL ORDINANCES:  Local ordinances may have stricter rules and several cities have already enacted their own regulations regarding a Landlord’s use of criminal records.  For example, the City of Oakland prohibits landlords from rejecting a potential tenant because of his or her prior conviction or from requiring disclosure of a criminal history in background checks.  However, the DFEH regulations and recent appellate court decisions may render such limitations unenforceable.

PRACTICE TIPS:

  1. Landlords should be advised to consult with their own qualified local landlord-tenant attorney, if the Landlord intends to use a Tenant applicant’s criminal history in any aspect of the selection process, including the applicability and enforceability of any local ordinance.
  2. No real estate licensee should attempt to make a judgment as to whether a Tenant applicant should be accepted or denied on the basis of the applicant’s criminal history.
  3. The only exception would be property managers who make that determination as part of their obligations under a Property Management Agreement and then the property managers should only proceed based on advice of their own qualified local landlord-tenant attorney.

 

 

This Weekly Practice Tip is an attorney-client privileged document for the exclusive use of clients of Broker Risk Management and their agents.  It may not be reproduced or distributed without the express written consent of Broker Risk Management.  The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.