The Department of Housing and Urban Development is tasked with enforcing the Fair Housing Act and one of the key tools used in enforcement is the Disparate Impact Rule, one that is used to protect against discrimination, either consciously or subconsciously engaged. Adam Almeida, President and CEO of TenantScreeningUSA.com opines; “Anytime HUD reviews core policies, such as the disparate impact rule, landlords and property managers should take note and be aware that potential changes to tenant screening policies could be forthcoming.”
The Fair Housing Act is enforced by the Department of Housing and Urban Development (HUD) oftentimes by the utilization of the Disparate Impact rule. Adam Almeida, President and CEO of TenantScreeningUSA.com states: “Landlords and property managers should take note anytime HUD reviews core policies, especially the use of the Disparate Impact rule, as this could signal potential change to tenant screening and tenant background checks.”
Under the previous administration the use of the disparate impact rule was enacted and became a critical component with the enforcement of the Fair Housing Act.
From HousingWire.com (May 10, 18):
Changes could be on the way for the Department of Housing and Urban Development’s disparate impact rule, a rule enacted by HUD during the Obama administration and used as a way to enforce the Fair Housing Act.
Under HUD’s rule, lenders, landlords, and other housing providers can be held liable for discrimination against protected classes even if it was not their intent to discriminate.
The use of disparate impact was challenged all the way up to the Supreme Court, which ruled in 2015 in favor of disparate impact. (1)
Almeida states: “Disparate Impact cases have appeared across a number of actions related to housing, such as banking and mortgage lending, as well as tenant screening, and can be enormously complicated. A best practice remains that landlords and property managers’ work with third-party tenant screening agencies to remain fully compliant with law, especially those against discrimination.”
The rule of Disparate Impact can be complex.
From ArnoldPorter.com (May 18):
HUD’s disparate impact regulation was finalized in 2013, at which time the vast majority of federal courts of appeals had agreed that the FHA prohibits any practice that produces a discriminatory effect, regardless of discriminatory intent, but had taken various different approaches to determining liability under an “effects” standard. According to HUD, the disparate impact regulation was necessary to “formalize [HUD’s] long-held recognition of discriminatory effects liability under the [FHA]” and to provide “consistency nationwide.”
HUD’s current regulation establishes a burden-shifting framework for adjudicating disparate impact claims under the FHA, pursuant to which the charging federal agency or private plaintiff has the initial burden of demonstrating that a challenged practice caused, or predictably will cause, a discriminatory effect. A practice is deemed to have a discriminatory effect if it actually or predictably results in a disparate impact on a group of persons or creates, increases, reinforces, or perpetuates segregated housing patterns because of race, color, religion, sex, handicap, familial status, or national origin. (2)
Almeida concludes: “When HUD decides to review policy landlords and property managers should take immediate notice.”
TenantScreeningUSA.com is a third-party tenant screening agency that offers thorough, affordable, and secure tenant checks for property managers large and small. TenantScreeningUSA.com is fully compliant with all local, state, and federal regulations that enforce the tenant screening industry. They are also a proud member of NAPBS.
Notes:
- housingwire.com/articles/43340-hud-signals-changes-could-be-coming-to-disparate-impact-rule
- arnoldporter.com/en/perspectives/publications/2018/05/hud-to-evaluate-disparate-impact
