How much should landlords be able to consider about a tenant's past connections to the criminal justice system? If new legislation proposed in Congress were to become law, the answer could become "nothing at all." Although background checks by landlords are a very common part of the screening process for rental applications today, some legislators want to make them a thing of the past. This proposal, combined with many changes in states and at the local level, could create a challenging environment for rental operators.
What to know about the proposed law
Called the Housing FIRST Act and introduced by two House Democrats, the proposed law would be a major change effective nationwide. Under the law, consumer reporting agencies would be barred entirely from providing any criminal background check report intended for use in screening tenants. It would also remove records older than seven years from any real estate background check. Additionally, the law would create an FCRA-like adverse action process if a landlord chose to deny a tenant's application.
Is it likely to pass?
Although the bill has nearly a dozen co-sponsors in the House, it is unlikely to advance in the current session. Even if it were to pass out of committee and reach a successful vote on the House floor, the currently divided Congress means it would likely not advance beyond the Senate. Although landlords don't need to worry about losing this tool nationwide, other changes exist.
Local laws continue changing to restrict tenant screening
From California to New York, local cities and even some states have begun banning or restricting tenant background checks. More than half a million people re-enter society after exiting prison every year, and these areas hope to provide more housing options to prevent homelessness and recidivism. Navigating these laws can be challenging for landlords—you may even think it unfairly ties your hand.
However, compliance matters for many reasons, and not just for expanding access to housing. If you run afoul of these laws, you could incur serious fines or lawsuits from affected rental applicants. These issues can be expensive to resolve and time-consuming to litigate. Working with a background check company that furnishes reliable reports and supports your efforts to remain compliant can help you avoid these headaches altogether.
Keep yourself prepared for changes in the law
Although the Housing FIRST Act is unlikely to become law soon, its introduction into Congress signals that a growing legislative movement has reached the federal level. More lawmakers have begun grappling with the need to find actionable responses to the housing crisis in states and local municipalities nationwide.
Although most areas still do not restrict background checks by landlords, that could change. Remember that monitoring for regulatory changes that could impact your work is vital. With the right screening partner and a clear understanding of the law, you can continue to screen and select the tenants that inspire your confidence.
About Michael Klazema The author
Michael Klazema is the lead author and editor for Dallas-based backgroundchecks.com with a focus on human resource and employment screening developments