In view of the April 4, 2016 HUD Guidelines to Providers of Housing, POE believes it is necessary to utilize additional versions of the Adverse Action Notifications that property owners and property managers are required to send, when the owners/managers intend to decline an application placed by a prospective resident.
The existing required prospective resident Adverse Action Notifications do not mention the reason for decline, do not mention anything about a criminal record, and they fulfill your legal requirements of the federal Fair Credit Reporting Act.
However, the HUD recommended Guidelines advise property owners and property managers to offer the declined applicant a chance to participate in an Individualized Assessment (IA), if the applicant’s criminal record is a factor in the intent to not extend a lease.
POE has created two resident Adverse Action Notification DRAFTS that we recommend property owners and property managers consider using, if a criminal record is a factor in the intent to decline a prospective resident.
The first is the notification when the only disqualifying factor is a criminal record.
The second is the notification when there are multiple disqualifying factors, including a criminal record.
POE believes that, in accordance with the HUD Guidelines, the appearance of other disqualifying factors does not negate the need to offer to conduct the IA.
On August 10, 2016, POE spoke with HUD’s Associate General Counsel for Fair Housing and we were told that, in the instances where multiple disqualifying factors contribute to an adverse decision, the housing provider should offer to conduct the Individualized Assessment, since it is difficult to determine what is the deciding factor(s), especially if one of those factors (criminal record) could have disparate impact.
This HUD counsel suggests that this is the most practical and safe approach and recommends that housing providers take this most cautious approach.
If you want POE to forward these DRAFTS to you, for your review, we would be happy to do so.
And, if you wish to discuss the IA, the criminal records Matrix or any other aspect of the HUD Guidelines, please let us know.