It is a common practice for landlords to check the criminal background of potential tenants before approving or denying an application. Most landlords, relying on the traditional viewpoint holding that criminal history may reveal the character of a person and indicate an inclination toward future criminal acts, check a potential tenant’s criminal background to minimize the risk of a future tenant creating health and safety risks or damaging the leased property. Despite the commonness of the practice, landlords may not realize that they are potentially exposing themselves to liability under the Fair Housing Act and related laws by basing decisions on applicants’ criminal background.

The data the Department of Housing and Urban Development (“HUD”) has reviewed shows that Black and Brown persons are arrested, charged, convicted, and incarcerated at a disproportionate rate compared to other racial groups in the United States.1 There are a multitude of reasons for this disparity, including “The New Jim Crow”2 and discriminatory policing. Regardless of the cause, those statistics indicate Black and Brown persons are more likely to have a criminal background than white persons. As a result, since Black and Brown persons have more criminal records than white persons, using criminal background to exclude people from housing, jobs, or anything will result in more Black and Brown persons being excluded than those from other racial groups.

That is a potential problem under the Fair Housing Act, which prohibits discrimination in the rental context on the basis of seven protected classes, including race. Discrimination under the Fair Housing Act can take several different forms. One form of discrimination is based on the disparate impact theory, which covers situations where persons belonging to a protected class are disproportionately impacted by a housing policy or practice. When there is no legitimate reason supporting the policy or practice that creates the disproportionate impact, the Fair Housing Act will deem the policy or practice discriminatory.

Since excluding potential tenants on the basis of criminal activity will affect more Black and Brown persons than other racial groups, it has a disproportionate impact on Black and Brown persons. Accordingly, landlords must have a legitimate reason to support the exclusion. Otherwise, the landlord may face liability under the Fair Housing Act.

HUD has been heavily focused on how housing providers use criminal background in housing decisions for many years. HUD recently issued new guidance on this issue, titled GUIDANCE ON APPLICATION OF THE FAIR HOUSING ACT TO THE SCREENING OF APPLICANTS FOR RENTAL HOUSING on April 29, 2024. In that guidance, HUD reiterates that overly broad criminal background screenings that have unjustified disparate impact violates the Fair Housing Act. In light of this guidance, it is important for housing providers to give some consideration to how they are screening potential tenants.

To comply with the Fair Housing Act, landlords who use criminal background screening should consider developing a written policy and procedure governing the use of criminal history in rental decisions. Recent HUD guidance and proposed rules indicate HUD believes an individual assessment of applicants’ criminal background is required in all cases. Accordingly, a landlord’s screening policy should define and explain how the landlord will decide each case. At a minimum, the policy should clearly define and state the categories of convictions that will affect a rental decision. For instance, does the landlord only want to exclude people for violent crimes? What about drug crimes? The policy must also clearly state how the decision to rent to someone will be affected. For instance, will there be an automatic denial for some crimes and discretionary denial for other? Furthermore, the policy should establish timeframes for how long a conviction will affect decisions to rent to a person. For instance, a landlord might decide to have a longer period of exclusion for murder than for a simple possession of marijuana charge. Most importantly, each exclusion, whether actual or potential, must be justified by a credible threat to health and safety. Arbitrary and overly broad exclusions are particularly problematic under the Fair Housing Act.

Now more so than ever it is important for landlords to put some thought into how and why they are making rental decisions based on criminal background. The experienced attorneys at Blanco Tackabery stand ready to provide counsel for making those difficult decisions or designing a policy to assist in making them.

1 See HUD, GUIDANCE ON APPLICATION OF THE FAIR HOUSING ACT TO THE SCREENING OF APPLICANTS FOR RENTAL HOUSING, pg. 21 (April 29, 2024), Guidance on Application of the Fair Housing Act to the Screening of Applicants for Rental Housing (hud.gov); see also HUD, GUIDANCE ON APPLICATION OF FAIR HOUSING ACT STANDARDS TO USE OF CRIMINAL RECORDS BY PROVIDERS OF HOUSING AND REAL ESTATE-RELATED TRANSACTIONS (April 4, 2016), Office of the General Counsel (hud.gov).

2 Michelle Alexander popularized the term “The New Jim Crow” with her 2010 non-fiction book with that title. As a concept, The New Jim Crow refers to the theory that the United States’ criminal justice system is a technology used to exert racial social control and which has an effect very much like the original Jim Crow laws of racial segregation.

Henry Hilston employs his experience in state and federal litigation as an asset in his representation of affordable and conventional multifamily property owners and managers. In that practice, he advises property management companies on a wide range of issues, including evictions and other landlord-tenant disputes, VAWA, the Fair Housing Act, and compliance issues under federal and state affordable housing programs, such as the Low-Income Housing Tax Credit (LIHTC) program and HUD and USDA-Rural Development rental subsidy programs. He also assists those clients with the preparation, review, and revision of management documents, including tenant selection plans, management agreements, and leases.

An easement is the right to make use of land owned by another person. For example, an easement could give a person the right to maintain an unimpeded scenic view from his property by restricting a neighboring landowner’s right to make use of her property in such a way that would impair her neighbor’s view. In this example, the first property owner’s right in the land of his neighbor is, essentially, a “negative right” that operates as a restraint on the second property owner’s right to make free use of her own property, rather than an “affirmative right” for the first property owner to make some specific use of the second property owner’s property himself.

However, when most people think of easements, they probably think first of access easements, which typically exist to provide a landowner with a means of access to his property from a public road over his neighbor’s land. There are a number of ways that such easements might exist. They could be expressly granted or reserved pursuant to a recorded instrument, such as a deed, or they might arise by implication or operation of law, where, for example, title to a single tract of land is subdivided into two tracts with the severance leaving one of the subdivisions without access, in which event a so-called “easement by necessity” might arise in favor of the owner of the landlocked tract.

One way that an easement might arise, which has existed under North Carolina law for many years but is not frequently used, is through a statutory cartway proceeding. These proceedings are governed by Article 4 of Chapter 136 of the North Carolina General Statutes, which provides in pertinent part that, if a person is engaged or preparing to engage in certain activity, including cultivation for agricultural purposes, timbering, quarrying for minerals, or the operation of an industrial or manufacturing plant, but the property on which such activity is to be conducted lacks access from a public road or other adequate legal access, other than from a navigable waterway, then he can institute a special proceeding before the Clerk of Superior Court to establish his entitlement to a statutory cartway over the land of a neighboring property owner.

Upon filing such a proceeding, all the landlocked person needs to do is demonstrate to the Clerk that it is necessary, reasonable, and just that he be granted the requested cartway. Once the landlocked property owner establishes his entitlement to the cartway, the Clerk then “appoint[s] a jury of view of three disinterested freeholders to view the premises and lay off” the course of the cartway “and assess the damages the owner or owners of the land crossed may sustain thereby.” N.C. Gen. Stat. § 136-69(a). The three-person “jury of view” appointed by the Clerk must then make a written report of its findings and recommendations to the Clerk. Any party to the special proceeding may then file exceptions to the jury’s report. Any such exceptions are heard and determined in the first instance by the Clerk, who “may affirm or modify said report, or set the same aside and order a new jury of view.” Id. Any party who is aggrieved by the Clerk’s final order or judgment “may appeal to the superior court for a jury trial de novo on all issues including the right to relief, the location of [the] cartway, . . . and the assessment of damages.” N.C. Gen. Stat. § 136-68. Once the report is approved and finalized, and any appellate rights are exhausted, the party who has been granted a cartway must pay into the Clerk’s office the amount of damages assessed in order to acquire the legal right to install and utilize the cartway that he has been awarded.

The statutory process for acquiring a cartway has existed since at least the 19th century, as a modern reader might surmise from the use of the archaic terminology, including for example, the requirement for the three jurors on the “jury of view” to be “disinterested freeholders.” While the applicable statutory regime has undergone relatively little legislative updating since its original enactment, there have been occasional calls for modernization, including calls for changes that would make cartways more readily obtainable. As development continues to increase across North Carolina, along with concomitant opportunities for development to be stymied by lack of legal access to otherwise developable properties, perhaps calls for the modernization of this little utilized means for acquiring access may renew or grow more sustained.

Chad Archer brings extensive expertise in state and federal litigation and was recently named to Business North Carolina’s Legal Elite Honorees 2024 as well as the 2024 edition of The Best Lawyers: Ones to Watch® in America. In his civil litigation practice, he advises clients on a wide range of issues, including trusts and estates, appeals, contract disputes, commercial and corporate disputes, complex business litigation and real property disputes.