The Maryland Attorney General’s Office recently announced a series of fair housing enforcement actions, resulting in several major settlements with housing providers across the state. These actions address issues related to source-of-income discrimination, tenant screening practices and minimum-income requirements for voucher holders.
Relevant Federal and State Law
Unlike federal law, Maryland law includes “source of income” as a protected class for discrimination. Under Maryland’s HOME Act, passed in 2020, landlords cannot discriminate against individuals based on their source of income and must accept housing vouchers among other lawful sources of income, including Housing Choice Vouchers (Section 8) or other forms of government assistance. More broadly, under Maryland law it is also illegal for landlords to deny housing, set different terms or otherwise discriminate against applicants simply because they use government-provided forms of income to pay for housing.
Additionally, while criminal history is not considered a protected class under federal or state law, a landlord’s reliance on a tenant’s or prospective tenant’s criminal history to deny a housing application or make other adverse decisions impacting housing can result in findings of disparate impact discrimination, particularly against racial and ethnic minorities.[1] While landlords can typically perform limited background checks, “blanket bans” on anyone with a criminal record are likely to violate the Fair Housing Act (FHA) and corresponding state laws unless the housing provider can demonstrate a substantial, legitimate and nondiscriminatory interest that cannot be achieved through less discriminatory means.
Generally, housing providers are required to perform individualized assessments of any tenant or applicant with a criminal record and consider the nature and severity of the conviction, the time elapsed since the offense and whether the offense is relevant to tenancy (e.g., violent or drug-related crimes), among other relevant factors.
Settlements Addressing Housing Discrimination
The Maryland Civil Rights Division has made clear one of its current focuses is the enforcement of fair housing laws. To that end, the Civil Rights Division recently reached settlements with several Maryland housing providers following investigations into alleged discriminatory practices. One such investigation found that tenants using housing vouchers at an apartment complex faced higher rent increases than other tenants. The housing provider involved in the investigation agreed to reimburse affected tenants for excess rent paid, pay additional damages and civil penalties and update and train staff on fair housing policies. Additionally, moving forward, the housing provider is required to provide the state officials with regular reports on its rental practices.
The Civil Rights Division also reached an agreement with another housing provider after an investigation revealed unlawful tenant screening practices. The housing provider’s previous policy excluded applicants with felony convictions regardless of the nature or age of the offense or any evidence of rehabilitation. While the Fair Housing Act does not prevent housing providers from completing background checks and using information obtained from the background check to make housing decisions, blanket bans against individuals with criminal convictions are generally found to be discriminatory. Consequently, the settlement requires the housing provider to adopt a new screening policy that considers individual circumstances, waive application fees for people with felony convictions for two years and pay civil penalties.
Maryland Supreme Court Case
In addition to settlements, the Civil Rights Division recently filed an amicus brief in Hare v. David S. Brown Enterprises, now pending in the Maryland Supreme Court. State law requires landlords to accept all lawful forms of income, including housing vouchers, towards rent. In this case, the landlord’s policy at issue required tenants to earn a minimum income of two-and-a-half times the rent price. Opponents of this policy and others like it argue that the minimum income requirement has the effect of excluding a percentage of voucher holders. Maryland’s top court heard oral arguments in the case earlier this month and a decision is expected by the end of August.
In light of recent efforts by the Civil Rights Division to ramp up the enforcement of fair housing laws, including an increase in investigations and legal settlements, Maryland landlords and housing providers should proactively review and, if needed, update their screening policies and practices to ensure compliance with applicable federal and state laws.
[1] See Implementation of the Office of General Counsel’s Guidance on Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate-Related Transactions (June 10, 2022) available here.
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