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Just because a buyer has a criminal record doesn't mean your HOA can bar them

Just because a buyer has a criminal record doesn't mean your HOA can bar them
Just because a buyer has a criminal record doesn't mean your HOA can bar them. (Francine Orr / Los Angeles Times)

Question: Over the past decade, our association has suffered from increased criminal activity. Some residents have criminal records, and although there is no evidence that these residents are committing any crimes, the board wants to make a rule that owners cannot rent or sell their homes to criminals.

Management has devised a form that all owners will have to fill out before renting or selling their units that requests information regarding the buyer's or renter's criminal record.

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Can you please provide us with the language to accomplish this so we can amend our governing documents?

Answer: There is no legally acceptable language that would allow you to amend your governing documents so that the HOA can discriminate against people renting or buying homes. Although a person's status as a "criminal" is not a protected class under the Fair Housing Act, there is evidence that protected classes of minorities would be disproportionately harmed by such a policy.

In April 2016, the U.S. Department of Housing and Urban Development's Office of General Counsel released its guidance on "Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate-Related Transactions."

In it, HUD recognized that as many as 100 million U.S. adults, or nearly one-third of the population, have a criminal record of some sort. Recognizing that there are significant barriers to securing housing because of their criminal history, HUD stated that when "individuals are released from prisons and jails, their ability to access safe, secure and affordable housing is critical to their successful reentry to society."

The guidance explains that a housing provider violates the Fair Housing Act when the provider's policy or practice has an unjustified discriminatory effect, even when the provider had no intent to discriminate. The guidance includes a three-step analysis to determine whether a housing provider's use of criminal history to deny housing opportunities is discriminatory and a violation of the act.

First, a plaintiff must prove that the policy results in a disparate impact on a group of people because of their race or national origin.

There is abundant statistical evidence that would support a plaintiff making this claim. The NAACP, for example, cites statistics on its website that say African Americans and Hispanics comprised 58% of all prisoners in 2008, even though the two groups make up roughly one-quarter of the U.S. population.

Second, the housing provider must prove that the challenged policy or practice is justified — in other words, that it is necessary to achieve a substantial, legitimate, nondiscriminatory interest of the provider.

Bald assertions based on generalizations or stereotypes that any individual with an arrest or conviction record poses a greater risk than an individual without such a record are not sufficient to satisfy this burden.

A homeowners association that would bar individuals because of one or more prior arrests without any conviction is especially problematic because many arrestees are not convicted of any crime.

A record of conviction will serve as sufficient evidence to prove that an individual engaged in criminal conduct, but a policy or practice that fails to take into account the nature and severity of a conviction is unlikely to satisfy this standard. There is an incredibly broad spectrum of "criminal" behavior.

The third step of the analysis is applicable only if a housing provider successfully proves that its criminal history policy or practice is necessary to achieve its substantial, legitimate, nondiscriminatory interest. But even if a homeowners association could show that, the final step allows the plaintiff to prove that such an interest could be served by another practice that has a less discriminatory effect.

The bottom line is this: The association should not try to prevent "criminals" from living or owning property in a common interest development. Should the board pass a rule that owners cannot rent or sell their homes to criminals, they do so at their peril.

In fact, there is a growing "ban the box" movement by civil rights groups that is advocating a prohibition on employment applications of check boxes that ask whether a person has a criminal record.

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Indeed, a homeowners association should have a nondiscriminatory policy in place if not for any reason other than to prevent prospective buyers and renters with criminal records from suing over a claim that no such policy exists.

Zachary Levine, a partner at Wolk & Levine, a business and intellectual property law firm, co-wrote this column. Vanitzian is an arbitrator and mediator. Send questions to Donie Vanitzian, JD, P.O. Box 10490, Marina del Rey, CA 90295 or noexit@mindspring.com.

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