Fair Housing Protects You Too
Many landlords view Fair Housing law as a restriction — something that limits what they can do. In reality, a properly built screening process that complies with Fair Housing is actually stronger and more defensible than one that doesn't. When every applicant is evaluated using the same documented criteria, your approvals and denials are based on objective data rather than subjective impressions. That protects you from accusations of discrimination and from your own unconscious biases that might lead to worse tenant selection.
The core principle is straightforward: apply the same criteria to every applicant, evaluate them using the same process, and make decisions based on the same factors. If your scoring framework treats all applicants identically, you're doing the foundational work of Fair Housing compliance.
Federal Protected Classes
The Fair Housing Act prohibits discrimination in housing based on seven protected characteristics: race, color, national origin, religion, sex (including gender identity and sexual orientation as of recent guidance), familial status (families with children under 18, pregnant individuals), and disability. You cannot use any of these characteristics as a factor in your screening decision, and your criteria cannot be designed to disproportionately exclude people in these categories without a legitimate, non-discriminatory business justification.
Many states and cities add additional protected classes. Common additions include age, marital status, source of income (including housing vouchers like Section 8), military or veteran status, sexual orientation and gender identity (in jurisdictions where federal coverage is unclear), and immigration status. Research your specific state and municipal laws before finalizing your screening criteria. The penalties for Fair Housing violations are severe — fines, damages, legal fees, and reputational harm.
Disparate Impact
Fair Housing law prohibits not just intentional discrimination but also policies that have a disproportionate negative impact on protected classes, even if that impact is unintentional. This is called disparate impact, and it's where many well-intentioned landlords get into trouble.
The most common disparate impact issues in tenant screening involve criminal history policies (blanket bans on applicants with criminal records disproportionately impact racial minorities and may violate Fair Housing law), credit score minimums (rigid cutoffs may disproportionately exclude certain demographic groups), and income requirements (very high income thresholds may disproportionately exclude families with children where one parent stays home, or individuals receiving disability benefits).
Disparate impact doesn't mean you can't use these criteria. It means your criteria must be reasonably related to a legitimate business purpose, and you must consider whether less discriminatory alternatives could achieve the same purpose. A blanket ban on all criminal history is hard to defend. A policy that considers the nature, recency, and relevance of criminal offenses to tenancy risk is much more defensible.
Document everything. If a Fair Housing complaint is filed, your documentation is your defense. Keep written screening criteria, completed scorecards for every applicant (approved and denied), records of all communications, and the specific reasons for every denial. If you can show that your process was consistent and your decisions were based on documented, non-discriminatory criteria, you're in a strong position.
Criminal History: The HUD Guidance
In 2016, HUD issued guidance specifically addressing the use of criminal history in tenant screening. The key points are that blanket policies banning all applicants with any criminal record likely violate Fair Housing law due to disparate impact, that arrest records without convictions should generally not be used as a basis for denial, and that landlords should conduct individualized assessments considering the nature of the crime, how much time has passed, and whether the conduct is relevant to tenancy risk.
This doesn't mean you can't consider criminal history. It means you need a nuanced policy that evaluates each case individually rather than applying a blanket ban. Your background check process should include a clear framework for how different types and ages of offenses are evaluated, and that framework should be documented and applied consistently.
Source of Income Protections
An increasing number of states and cities prohibit discrimination based on source of income, which typically includes housing vouchers (Section 8), Social Security, disability benefits, and other government assistance. In jurisdictions with source of income protections, you cannot refuse to rent to someone simply because they pay with a voucher or receive benefits rather than traditional employment income.
You can still apply your standard screening criteria — income requirements, credit standards, rental history, and background checks — as long as those criteria are applied equally to all applicants regardless of income source. What you cannot do is reject an applicant solely because their income comes from a voucher or government benefit rather than a paycheck.
Adverse Action Requirements
When you deny an applicant based wholly or partly on information from a credit report or background check, the Fair Credit Reporting Act requires you to provide an adverse action notice. This notice must include the name and contact information of the screening company, a statement that the screening company did not make the rental decision, and notice of the applicant's right to obtain a free copy of their report and dispute inaccurate information.
This isn't optional. It's federal law. Failure to provide adverse action notices can result in liability under both the FCRA and potentially Fair Housing law. Most screening services provide templates or automated adverse action notices. Use them for every denial.
Fair Housing compliance isn't a burden — it's the framework that makes your screening process legally bulletproof. Build your scoring system with Fair Housing in mind from the start, and you'll never have to worry about whether a decision can be defended. For comprehensive screening resources that include compliance guidance, explore this landlord platform.