One of the more common reasons for landlords to turn down tenants is for items found in a background check. With 100 million Americans having a criminal record, it’s essential for landlords to know how to assess background reports.
What’s Included in a Criminal Background Check?
Landlords generally use a tenant screening service to perform criminal background checks on their applicants. Here is the information usually found in a criminal history:
- Felony and misdemeanor convictions
- Pending criminal cases
- History of incarceration as an adult
- Sometimes arrests are found, but those are generally excluded from screenings
- Court orders, decrees, and judgments
How Long Do Items Remain on a Criminal History?
In general, items on a criminal record remain indefinitely. However, the Fair Credit Reporting Act (FCRA), which generally refers to credit history, also applies to criminal records as well. The FCRA states that tenant screening reports should not include crimes committed more than 7 years prior.
If a landlord decides to pull criminal history without a tenant screening service, the data won’t be limited to the past 7 years. In this case, the landlord must use discretion and not deny housing based on crimes committed long ago.
Here are a few other items to take into consideration with criminal history records:
- Federal criminal databases (maintained by the FBI) keep records indefinitely and do not remove records, except by presidential pardon.
- States can expunge criminal records if sufficient time has passed. When and why this is done is handled by each state individually. In some states, individuals must apply to have their record cleared. In others, such as in Utah, minor offenses are expunged automatically after 5-7 years of good behavior.
- Records of juvenile convictions and detentions are handled on a state-by-state basis. Some states automatically seal or expunge records when minors turn 18; other states (such as Florida) require the individual to be much older before juvenile records are wiped clean.
Should Landlords Accept a Rental Applicant With a Criminal History?
Landlords will turn down rental applicants with a criminal history because they believe that they are less qualified tenants. Landlords believe that they are more likely to:
- Be dangerous to the area
- Cause an unwanted reputation for the property (such as allowing a sex offender in the unit)
- Perform illegal activities in or around the property
- Have a lower credit score and get behind on rent
However, while all of those points appear to have merit, one study showed otherwise. 347 homeless people with behavioral health disorders were moved into supported housing. Over half of them had a criminal record.
The results, however, showed that “the presence of a criminal background did not predict housing failure.”
The study even went on to show that individuals with records of drug crimes and property crimes did not have any predictive value in the outcome of the housing.
Of course, it’s still generally best practice to analyze the applicant’s criminal history, rather than have a blanket policy that excludes or includes applicants.
Misdemeanors vs Felonies
The severity of the crime should certainly play a role in deciding to accept an applicant with a criminal history.
For example, it would be pretty silly to reject an applicant because they’ve jaywalked before. Alternatively, most landlords also would never accept someone who recently assaulted a neighbor.
Misdemeanors are crimes of a lesser nature, such as shoplifting, trespassing, public drunkenness, and simple assault. (It’s worth noting that these change by state, but misdemeanors remain relatively the same throughout the country)
Since these crimes usually are accompanied by fines, community service, and/or a short jail sentence, most of them can probably be overlooked by a landlord—unless there’s a persistent, recent history.
Felonies are more serious crimes that should be considered with more scrutiny by a landlord.
Types of Felonies
Many landlords will have a blanket policy to reject any application with felonies, and they would mostly be justified to do so. Someone with a felony on their record will be more likely to commit another felony, which could result in destruction of property, injury to neighbors, theft, or imprisonment resulting in expensive vacancies.
Some types of felonies include:
- Rape
- Burglary
- Murder
- Sex crimes
- Assault
- Kidnapping
- Extortion
Obviously, the severity of felonies vary widely, and some may not be relevant to someone’s ability to be a good tenant.
For example, vandalism can be considered a felony (depending where you are), but perhaps the individual was 19 at the time and did it as a college prank. If that person is now 24 and seems to be a responsible member of society, then that vandalism charge probably isn’t a good reason to reject their application.
Keep a detailed list of which crimes (and timeframes) constitute an automatic rejection while you’re screening tenants. This way, you can help prevent discrimination charges against you by being consistent in your rejections.
Sex Offender Status
It’s common practice for landlords to deny housing based on sex offender status. The main reason would be to not put neighbors at risk.
In addition, the Sexual Offender Registry is public knowledge and people living in the area can find out if they are living next to anyone on the registry.
Not only can this cause undue stress to neighbors, but it puts a negative reputation on your properties.
Repeat Offenders
The quantity of crimes should also play a part in analyzing an applicant’s history. Perhaps the individual only committed small crimes, but the person has been arrested 4 times in the past 5 years.
This indicates a pattern of irresponsible behavior. Even if they were all misdemeanors, the crimes portray the applicant as someone of questionable behavior.
While looking for the best tenants, you want people who will take care of the property, pay rent on time, and handle all communication responsibly. Someone with repeated criminal behavior does not fit that mold.
Time Passed Since Crime
The passage of time probably won’t change a landlord’s mind about serious crimes, but it can help for lesser crimes.
For example, the vandalism example used above works because so much time has passed. If the person had been arrested the previous week, the landlord would rightfully be concerned that their property could be in danger from someone who’s been destroying property recently.
Strength of Application
This is important. If an applicant appears to be the ideal tenant—meaning they have great income, no evictions, good credit, etc.—then it’s easier to overlook a minor criminal history.
However, if a prior landlord has negative comments about the applicant and the applicant has a recent misdemeanor, it’s a good idea to move to the next candidate.
Number and Quality of Applicants
The unfortunate truth is that sometimes a landlord has no other choice if they want to get a tenant in their property. This is more common in less desirable rental units in low-class neighborhoods.
Perhaps very few people applied, or the people who applied all have negative marks on their application. In this case, it becomes a matter of weighing which negative marks are the least bad.
For example, someone with a vandalism record from 2 years ago is likely a better candidate than someone with a 500 credit score or a prior eviction.
If you believe that you can still find a better applicant, it’s worth it in the long run to reopen applications. Perhaps you can improve your marketing or lower the price by $50 to entice new applicants.
Finding a good quality, long-term tenant is the key to profit. However, the cost of waiting can be too high, as each month of vacancy can cost $2,000 or more.
Extenuating Circumstances
Not every applicant’s criminal history deserves an explanation—a violent criminal or sex offender should be passed over—but in some cases it makes sense to ask for more context.
For example, if someone could explain that their vandalism charge was the result of being in the wrong place at the wrong time, that could make it easier for you to overlook their criminal record.
Also, many responsible applicants will try to head off these concerns beforehand. Alerting the landlord ahead of time as to what they’ll find on their criminal record goes a long way, especially if the applicant provides context as well.
Properly Rejecting an Applicant for Criminal History
Landlords cannot reject all applicants based on their criminal history, or they can risk getting into trouble.
Avoid Discrimination
In 2016, the Department of Housing and Urban Development (HUD) released a memo concerning the use of criminal records when denying applicants. Their main emphasis is to warn landlords against discriminatory practices.
The main points brought up are:
- ⅓ of U.S. adults have a criminal record of some sort, so rejecting all applicants for a criminal record isn’t completely feasible.
- “Across the United States, African Americans and Hispanics are arrested, convicted and incarcerated at rates disproportionate to their share of the general population.”
- The Fair Housing Act states that denying housing to anyone because of race or country of origin is discrimination.
In short, denying applicants for criminal records can have the unintended effect of rejecting minorities at a higher rate.
While a landlord is within their right to deny applicants for having a criminal background, the HUD also warns that a landlord who imposes a “blanket prohibition on any person with a conviction record” will in effect be using discriminatory practices.
When analyzing a tenant’s criminal history, be sure that you are consistent with everyone. A lack of consistency makes it easy for an applicant, especially a minority, to claim that they were discriminated against.
For example, let’s say two applicants have a vandalism charge. One applicant is denied while the other gets the rental agreement. The landlord sends a letter to the rejected applicant saying they were denied because of their criminal background.
Clearly there’s a problem here. The reality is that (hopefully) there was another reason the rejected applicant was denied. They likely had a weaker overall resume than the applicant who was accepted, but the landlord may have used the denial reason that was easier to explain or more obvious.
This could be seen as unintentional discrimination.
Local & State Laws
Most of what has been discussed in this article is based on federal rules and regulations. However, individual states and cities can impose stricter rules when analyzing a criminal history.
For example, Oakland has completely banned landlords from conducting criminal background checks in an attempt to allow everyone a chance to get housing.
Be sure to check with an attorney to understand your local laws about conducting background checks.
Arrests Are not Convictions
In the U.S., arrests do not imply guilt. It means that the police were suspicious of some of the activity of the individual. A landlord cannot use arrests as a means for rejecting a rental application.
Most tenant screening services will automatically remove any mention of arrest records.
While doing your own due diligence, you may discover a prior arrest for a potential applicant. It is up to you to then use discretion and not allow that information to influence your decision.
How to Mitigate Risk of Accepting Applicants With a Criminal History
If you decide to take on an applicant with a criminal history, you can legally take a few actions to help lower the risk of having that person in your property.
For example:
- Require a co-signer – A co-signer signs the rental agreement along with the tenant and is now financially responsible, along with the tenant, for the property. If the tenant damages or vacates the property, the co-signer must now take on the financial burden.
- Require higher rent – The drawback with higher rent is that the applicant may not be able to afford it. However, it does help a property owner put aside a bit of money each month to help in the case of any issues with the tenant.
- Require a higher deposit – Most landlords require 1-2 months of rent as a security deposit. Landlords could require an extra $500 or an extra month’s rent in order to protect themselves later on.
