A Nevada broker's office policy requires all rental applicants to submit to a criminal background check and automatically rejects any applicant with a felony conviction. A prospective tenant who was convicted of a non-violent drug felony ten years ago is denied a rental unit. The tenant files a fair housing complaint. Under the federal Fair Housing Act, which of the following best describes the most likely legal analysis?
Correct Answer
D) The policy may violate the FHA if it has a disparate impact on a federally protected class such as race, even though criminal history itself is not a protected class.
Criminal history is not itself a federally protected class under the Fair Housing Act. However, HUD's April 2016 guidance established that blanket policies excluding persons with criminal records can violate the FHA through disparate impact theory if such policies disproportionately exclude members of a racial or national origin group (both federally protected classes). Because African Americans and Hispanics are statistically overrepresented in the criminal justice system, a blanket criminal history exclusion may create a disparate impact based on race or national origin. The broker's blanket policy—without individualized assessment—is the key legal vulnerability.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A tie-in arrangement is an illegal antitrust practice in which a seller conditions the purchase of one product or service on the buyer's agreement to purchase a separate product or service.
A trust account, also called an escrow account, is a separate bank account maintained by a broker to hold funds belonging to others, such as earnest money deposits, security deposits, or other client funds.
Advertising regulations govern how real estate licensees may market properties and services, requiring truthful, non-deceptive advertising that includes proper identification of the brokerage.
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