In February of last year, the US Department of Housing and Urban Development (HUD) issued a Discriminatory Effects Final Rule to formalize a national standard for determining Fair Housing violations.

“Through the issuance of this Rule, HUD is reaffirming its commitment to enforcing the Fair Housing Act in a consistent and uniform manner,” said HUD secretary Shaun Donovan. The Fair Housing Act prohibits housing practices that result in disparate impact on a group of persons because of race, color, religion, sex, handicap, familial status or national origin.

The practice of running criminal background checks on potential tenants may now be prohibited under the Discriminatory Effects Standard Final Rule.

Many in the rental housing industry have expressed serious concern over the final rule, specifically, the limitations placed on tenant screening. Criminal background checks provide some level of assurance that measures are being taken to uphold resident safety and viability. By restricting a property owner’s right to screen an applicant’s criminal history, this new rule would seem to dramatically increase the property owner’s risk for liability. 

A property owner can be held liable for crimes committed by their tenants as criminal activity has a negative impact on the other residents and the surrounding community. The best way to reduce the likelihood of criminal activity and to convince a judge, if necessary, that all reasonable steps were taken to prevent such activity, is to perform a thorough background check on all potential residents prior to their moving into the community.

It presents a large problem for property owners if they are not allowed to perform criminal background checks and are then held liable for a resident’s criminal activity.

Acting Assistant Secretary for Fair Housing, Bryan Greene, has stated that HUD is working on outlining additional guidance for impacted industries. Operating guidelines could be released as early as this summer and would more clearly define what qualifies as “unjustified” discrimination, including information pertaining to criminal background screening.

Visit for more information as it becomes available.

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