Most Texas landlords realize that when they rent to a tenant with a criminal history, the landlord may be held liable for criminal acts committed by that tenant. Texas Property Code Section 92.025 provides that a tenant cannot sue a landlord solely for leasing to a tenant convicted of, arrested for or placed on deferred adjudication for an offense. However, this law goes on to say that it does not preclude a suit for negligence against the landlord if: 1) the landlord leases to a tenant who has been convicted of murder, capital murder, indecency with a child, aggravated sexual assault and certain other listed offenses; and 2) the landlord knew or should have known of the conviction.
That’s pretty clear. However, now the federal government steps in. Even though a criminal record is not a protected status (like race, gender, religion, etc.) under the U.S. Department of Housing and Urban Development’s (HUD) Fair Housing Act, that has not prevented the Office of General Counsel for HUD from issuing “Guidance” on the application of the Fair Housing Act to prospective tenants with criminal records. The Guidance (what a misnomer) indicates that a landlord who conducts a background check of a prospective tenant and refuses to lease to that tenant on the basis of the prospective tenant’s criminal record may leave that landlord open to complaints of discrimination by prospective tenants with criminal records. Remember, HUD can institute enforcement proceedings on these complaints as well.
HUD’s position is a catch-22 for Texas landlords. On the one hand, if the landlord refuses to rent based on a prospective tenant’s criminal record, the landlord is open to complaints and possible enforcement proceedings by HUD. On the other hand, if the landlord rents to a tenant with a criminal record, the landlord can be liable to other tenants for the actions of the tenant with the criminal history. HUD recommends that landlords evaluate prospective tenants, including any criminal records, on a case-by-case basis. Now, what was a simple leasing decision, becomes a legal issue that should probably be reviewed by the landlord’s attorney. This increases the landlord’s costs, which will probably result in higher rents. Higher rents will push some of the poorest renters out of the price range for certain apartments.