In a landmark civil rights
decision (Connecticut Fair Housing Center, et al. v. CoreLogic Rental
Property Solutions, LLC, March 25, 2019), the Connecticut federal District
Court established for the first time that consumer reporting agencies must
comply with the Fair Housing Act (FHA) when conducting tenant screening
services for landlords.
Since automated decisions by
third-party screening companies are rapidly becoming the norm, this ruling has
significant implications for landlords, management companies, and renters.
The case was filed by the
Connecticut Fair Housing Center and the National Housing Law Project after
CoreLogic’s tenant screening product, CrimSAFE, disqualified a disabled Latino
man with no criminal convictions from moving in with his mother.
CrimSAFE provides landlords with
an "accept or decline" decision based on CoreLogic’s assessment of an
applicant’s criminal record. The lawsuit alleged that CrimSAFE discriminates on
the basis of race, national origin, and disability.
- In 2016,
Carmen Arroyo submitted a rental application to move her son, Mikhail, out of a
nursing home and into her apartment.
- Mikhail
was in the nursing home recovering from an accident that left him unable to
walk, talk, or care for himself.
- He was
rejected because CrimSAFE determined he had a "disqualifying criminal record."
- CoreLogic
failed to provide the landlord with any documents or explanation of their
determination and unlawfully refused to provide Ms. Arroyo with copies of the
background report.
- As a
result of the denial, Mikhail had to remain in the nursing home for more than a
year longer than necessary.
- Ms. Arroyo
later learned that her son’s only criminal record was a charge - from prior to
his accident, and later dropped - for shoplifting, an infraction below the
level of a misdemeanor.
- CoreLogic
claimed that the case should be dismissed because fair housing laws did not
apply to its services.
Ruling - The Court rejected CoreLogic’s claim and
concluded that CoreLogic "held itself out as a company with the knowledge and
ingenuity to screen housing applicants by interpreting criminal records and
specifically advertised its ability to improve ‘Fair Housing compliance.’"
- The Court
further held that because companies like CoreLogic essentially make rental
admission decisions for landlords that use their services, they must make those
decisions in accordance with fair housing requirements.
- The Court
found CoreLogic’s file disclosure policies had a "sufficiently close nexus to
housing availability" for the FHA to apply.
- The Court
held that consumer reporting agencies have a duty under the FHA not to
discriminate in violation of the FHA in carrying out tenant screening
activities, including a duty to make reasonable accommodations in their
policies and practices that disadvantage persons with disabilities.
- In 2016,
HUD provided guidance indicating that excluding rental applicants due to
criminal records has a disparate impact for Latinos and African Americans.
- To avoid
this type of discrimination, an "individualized review" should be conducted in
order to determine if the affected individual poses a genuine and ongoing
threat to persons or property.
- CoreLogic
did not conduct an individualized review of Mr. Arroyo’s suitability for
tenancy before it rejected him, nor did it offer the opportunity for such an
assessment. CoreLogic also prevented the landlord from doing so by withholding
information about the underlying criminal history.
- An
individualized review would have shown that Mr. Arroyo posed no threat because
he had not been convicted of a crime and was physically incapable of posing a
danger to anyone.
While using third-party services
to check criminal history may be fine, landlords should not rely on those
services to make the final leasing decision. Landlords should insist that the
third party service provide details on any criminal records discovered so that
an assessment may be made as to whether the applicant is or is not suitable for
occupancy. Landlords should also be certain to have a process in place whereby
anyone rejected due to a criminal record has the opportunity to request and
have an individualized assessment.
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