Congressional Legislators Hope to Restrict the Background Checks Landlords Use

Should landlords consider a tenant’s criminal background? If so, should there be limitations or mitigating circumstances? New legislation proposed in Congress could forbid background screening. Although the background checks landlords use are ubiquitous in the screening process for rental applications, some legislators want to remove them. 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 significant 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, it would establish an adverse action process similar to the Fair Credit Reporting Act (FCRA) if a landlord denies 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

Local cities and some states, from California to New York, have banned or restricted 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 who feel they unfairly restrict property safety.

However, compliance is necessary for many reasons, not merely for expanding access to housing. You could incur serious fines or lawsuits from affected rental applicants if you breach these laws. These issues can be expensive to resolve and time-consuming to litigate. Local and state-level changes continue to evolve, with some areas already restricting or banning tenant background checks to help reintegrate formerly incarcerated individuals into society and reduce homelessness.

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 grapple with the need to find actionable responses to the nationwide housing crisis in states and local municipalities. 

Most areas still do not restrict background checks by landlords,  but that could change. Remember that monitoring for regulatory changes that could impact you is vital. With a clear understanding of the law, you can continue to screen and select the tenants that inspire your confidence.

Changes at backgroundchecks.com 

Due to the instability and rapidly growing regulatory burdens of the changing laws, backgroundchecks.com no longer offers tenant screening or credit report access. Our focus will remain on our core offerings and providing a range of background screening packages for employers.