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2007-10-17 14:27:00

Criminal Activities: How Property Managers Can Reduce The Risk

Landlord-tenant law creates rights and responsibilities for both parties to a rental contract. Does the landlord have a responsibility to protect tenants against exposure to criminal activities? As is so often the case, the answer is "Yes" and "No."

Management is required to do whatever a court determines a reasonable manager would do under "like and similar circumstances." Judges and juries look at standards in the industry (which have a tendency to change) in order to determine what is reasonable. It would not be reasonable to think that management could protect every tenant from criminal activities at all times. But it would also not be reasonable for management to let applicants live on the property without any screening or allow residents to conduct known criminal activities on or near the property.

Management cannot simply do criminal background checks and deny everyone who has ever committed a crime. Applicants have privacy rights and protection against discrimination under both Federal and California law. What can and should management do to reduce the risk that residents could be exposed to criminal activities?

If criminal background checks are done, they should be done on every applicant, not just those who look suspicious. If an applicant has a criminal record, the use of the information is problematic. Certainly, if there is a current, outstanding warrant, a landlord need not rent to an applicant. But if someone has "paid his debt to society," can he be refused all rental accommodations? Probably not, but let's examine the arguments on both sides of the issue.

Under Federal law, a person convicted of manufacture or distribution of a controlled substance is not entitled to protection under fair housing laws. Thus, management has a "safe-harbor" to refuse such an applicant with little risk of liability for discrimination.

Rules in Federally -Subsidized Housing

In federally-subsidized housing, the subsidizing agency generally makes rules that prohibit the spending of government housing money on persons with criminal backgrounds. Therefore, housing providers in those programs are required to conduct criminal background checks and may refuse applicants with certain criminal histories, including registered sex offenders.

In contrast, California's Megan's law strictly prohibits the denial of housing based solely on the fact that an applicant or tenant is on the registered sex offender list. So a subsidized housing provider in California is arguably violating state law when he complies with the federal rules. We always recommend that subsidized housing clients have the government directive in writing before instituting such a policy. Then, the argument against denial being a discriminatory action is that federal law supercedes state law in this case and that providers can not operate if they don't follow the federal law.

Management of non-subsidized rental properties should give careful thought to whether criminal background checks will be conducted at all. First, there is the argument that by doing background checks that are not required, management is creating a duty to continue the practice. Second, having a policy of checking criminal backgrounds may give a false impression of security in an applicant's mind and therefore heighten the responsibility to protect residents from criminal activities. Experts have stated that it is difficult and expensive to gather comprehensive information on criminals. Most information is stored locally, so one must check with many city, county, state and federal agencies in order to get sufficient information to feel assured that the subject has no record. Of course, it is argued that simply instituting the practice and letting applicants know of it can have a "self-screening" effect . . . applicants with criminal histories may decide it would be best to apply at a community that does not run background checks.

The use of the information is another issue. Although criminals are not a specified "protected class" under fair housing laws, California protects all persons from discrimination on any "arbitrary" basis. Management could argue that the focus of a denial is the conduct of the applicant, not the conviction. In other words, based on what the person did in the past (usually violent acts against persons or property), they are a current health and safety risk to surrounding residents.

It is a challenge to make that argument if the applicant is otherwise qualified and has either completed his sentence, or if the crime occurred many years in the past with no subsequent problems. The climate is right for a group like the ACLU to bring a test case against either a subsidized or conventional housing landlord who denies an applicant on a basis other than manufacture or distribution of a controlled substance.

Some clients have weighed the risks and decided to deny all felons, some for violent felonies only. Some clients blindly follow their screening company's advice. Most avoid the issue by either not doing criminal screening or just screening for manufacture or distribution convictions.

Whatever policy you choose, be prepared to defend it with specific data to support the decision. 

(D. J. Ryan is the Director of Client Education and a fair housing specialist in the Fair Housing Department for the law firm of Kimball, Tirey & St. John, with offices in San Diego, Los Angeles, Newport Beach, Ontario, Sacramento, Bay Area and Las Vegas. She served as executive director of the San Diego County Apartment Association from 1977 to 1991, and has been a fair housing trainer and consultant for the past fifteen years. She can be reached at 800-338-6039.)

The above discussion is general in nature and should not be construed as individualized legal advice. Readers are cautioned to seek individualized legal assistance based on a detailed analysis of their particular facts and circumstances. If you have any questions regarding the above material or any other matter involving landlord-tenant issues, you may contact the Law Offices of Kimball, Tirey & St. John, 800-338-6039.

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