Tenant Criminal History Off-Limits for Seattle Landlords
A new Seattle ordinance, effective February 19, 2018, prohibits landlords from screening tenants based upon their criminal records. According to its proponents, the law, unanimously adopted by the Seattle City Council last August, is intended to lower barriers to housing for people with criminal histories, who are often rejected by landlords. Opponents of the measure argued, among other things, landlords' ability to use criminal background information to protect property and other residents was an important tool. Whether other cities in the Pacific Northwest will adopt similar measures is unclear, but the Fair Chance Housing Ordinance, SMC Chapter 14.06, is now law in the City of Seattle. Keep in mind that similar restrictions exist beyond Seattle in the federal Fair Housing Act, where associations with tenant screening restrictions are not able to obtain FHA financing.
Under the Seattle ordinance, landlords are barred from excluding people with criminal records in rental advertisements, from asking about criminal records during the application process, and from rejecting potential tenants based upon their criminal records. The lone category of criminal conviction allowed to be weighed by Seattle landlords are sexual offenses which require an individual to be listed on a local, state, or national registry. However, other tools such as credit checks, prior evictions or collections actions, and landlord and employment verification are still permitted. Reported violations are investigated by the Seattle Office of Civil Rights, with steep penalties if the violations are confirmed: $11,000 maximum penalty for the first offense; $27,500 for a second offense within five years; and $55,000 for a third violation within seven years.
Since the ordinance is less than a month old as of today, we are not aware of any enforcement actions against community associations in Seattle, though there is certainly potential for future issues to arise. Governing documents for many associations not only permit owners to rent their units, but actually require criminal background checks as part of the tenant screening process – the results of which, in many cases, must be provided to the association board of directors. One could easily imagine an owner who initiates a background check or otherwise asks about a tenant’s criminal history in an effort to comply with the governing documents could be fined by the city and look to hold their association legally responsible.
In consideration of the new ordinance, as well as the FHA lending requirements, Seattle community associations with tenant screening requirements should consider not enforcing those provisions. We typically recommend that community association boards should not be in the business of screening tenants anyway, but in this case, when following the governing documents would be contrary to the law, Seattle boards should carefully review what is required and how they can manage their risk.
While it remains to be seen whether other Pacific Northwest municipalities will follow suit, the conversation over affordable and available housing is not going away, and community associations need to stay on top of their local government’s efforts to address the problem. If your community association governing documents have tenant screening provisions, and you would like to know how laws like the Seattle Fair Chance Housing Ordinance could affect your community or how your association can manage its risk and duties to its homeowners, please let us know.