Tenant Background Checks Spark Controversy, Spur Legislation

Debates about fair access to jobs and housing have been a staple in politics across the United States for years. A lack of access to affordable housing and ongoing problems with homelessness mean legislators have faced pressure to take action. Often, such actions target how landlords select applicants for tenancy. Background checks are frequently singled out as a barrier that legislators should remove. 

Many states have lawmakers making efforts to change the rules around housing applications. In some cases, they’ve had success. In others, the controversy created by proposed restrictions has led to persistent legislative failures. Consider two examples from Nevada and Oregon.  

Efforts to Pass Tenant Protections Stalled in Nevada  

In 2021, a Las Vegas Democrat in the State Assembly advocated for a bill that would have changed the state's tenant selection landscape. With few exceptions, they would have barred landlords from requesting a potential tenant’s conviction history. Violent felonies, arson, and sex crimes were exempt. However, most other types of criminal history would cease being a disqualification. The law would have also banned landlords from evicting existing tenants based on criminal records. The law passed the Nevada Senate on a party-line vote. However, the bill stalled and died in the Assembly due to continued protests by landlord groups.  

In 2023, the Nevada legislature succeeded in passing a wide range of bills that would alter the methods used for tenant selection in the state. Laws that would more strictly regulate fees and what landlords could ask on application forms were among these. Nevada’s governor vetoed all the bills, leaving the current system in place.  

Oregon’s Regulations on Landlords Enacted  

In Oregon, unlike in Nevada, legislators succeeded in 2021 at changing the law. After numerous changes and amendments, the bill – SB 291 – became law. This legislation made critical changes to the Oregon Residential Landlord/Tenant Act. The most notable features of this law included the following changes:  

• Landlords may not charge screening fees higher than the actual cost of their reports. 

• Landlords must disclose new information about their screening criteria to applicants. 

• Applicants have a right to appeal a denial. 

• All federally, state and locally-required policies on non-discrimination must now be a part of a landlord’s criteria.  

When considering criminal history facts, landlords may:  

• Only consider arrests that resulted in a conviction for the crime. 

• Consider pending charges only if they’re illegal in Oregon and the applicant is not in a diversion program.  

Landlords must also provide a written explanation of their reason for denying an application within 14 days and provide detailed information. Denials must apply an extensive individualized assessment considering specific factors detailed by the law.  

The Compliance Landscape Continues to Change  

As we’ve seen, the legislative environment surrounding tenant screening remains active and in flux, creating continuing challenges and shifting compliance guidelines for landlords. Such legislative efforts are likely to continue, especially in states such as Nevada, where previous efforts have failed.  

The problematic landscape in this space is why, effective September 2024, backgroundchecks.com discontinued products for tenant screening—criminal background checks and related credit report access. Because it is not a core area of focus for our business, we cannot support the rapidly growing regulatory burdens in this space. Landlords and property owners should remain vigilant in their efforts to stay up-to-date on regulatory changes.