The key to avoiding fair housing lawsuits? Flexibility

how to avoid fair housing lawsuits
Avoiding discrimination lawsuits with fair housing laws.

In the past few years, litigation and risk with Fair Housing issues have increased substantially. One of the reasons is that there will always be advocates for tenants who are on a crusade to stop landlords from denying people housing. They feel like every person should have a right to a housing opportunity.

We feel the same way about every person having an opportunity, but landlords have to be concerned about risk and cost and have to invest in tenant screening services since not all potential tenants will turn out to be good customers. it’s this denial over the risk that causes friction.

In 2015, the Supreme Court ruled that landlords do have a right to deny people for legitimate business risk. However, if a policy is not well thought out, it can be interpreted and prosecuted under the theory of “disparate impact”.

For instance, a flat criminal exclusion that says no one with any criminal history can EVER rent can be deemed discriminatory because minorities are six times more likely to have criminal history than white people.

You may not mean the policy that way, but that is how it will be interpreted. So we have taught Utah landlords to have reasoned out standards on criminal history. For example, never have a blanket exclusion (excluding all criminal history forever).

Depending on the type and severity of crime exclusion times should vary, possibly between three and ten years (depending on the crime). Drug possession exclusion will be shorter than manufacturing or distribution.

We might not have any exclusion time for white collar crime that wouldn’t be a risk to the property or ability to pay, but might have longer time exclusions on property crime like vandalism or assaults, since they affect the risk to us, other tenants, and the property.

We also need to have an appeal process for denials where we consider the “totality of the situation” and let the denied applicants make their case why extenuating circumstances should be considered. For instance, someone with possession of drugs history could argue that completion of a drug treatment program and participation in a recovery program, like a 12 step program, and no problems for a length of times would be grounds for ignoring the criminal activity and giving them an opportunity to rent sooner than the normal time exclusion.

The point is, rather than inflexible black and white standards, we live in a time where we need to be conscientious and persuadable. You can make exceptions to the rules because of an accommodation request or an appeal and not be violating Fair Housing laws.

Recently, a lawsuit was filed on a policy denying people for any eviction action. According to the plaintiff, they told a manager that they had an eviction filing on their record, but that they had worked out a payment program and ended up staying in the unit and getting a “satisfaction” of judgment.

Despite these extenuating circumstances, according to the lawsuit, the company that was using an inflexible standard wouldn’t reconsider their policy.

While we don’t know all the facts or the outcome of the case yet, a conclusion can be drawn. Be persuadable. Look at all the circumstances. Negotiate things like higher deposits or co-signers in an effort to offer housing opportunities. Or risk being sued. Even a win costs time, money, and reputation.

A screening company owner I know once told me he felt like landlords, because of inflexibility and rigid standards, deny more people who would have been good tenants than preventing bad tenants from renting. Consider if your standards are too rigid and create fair housing litigation risk.

Try to find ways to qualify people and give them an opportunity. It can’t always be done, but as litigation risk proves, it may be worth the effort to stay away from the risk of being sued or accused of discrimination by being flexible and persuadable.

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This article was originally published in the Rental Housing Journal Utah.


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