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Oakland’s Fair Chance Ordinance

Citing statistics showing that 73% of the local homeless population was formerly incarcerated, the Oakland City Council passed the “Fair Chance to Housing” Ordinance in February 2020. This local law imposed new regulations on housing providers which (with some exceptions) prohibited “adverse actions” based on a current or prospective tenant’s criminal record, prohibited housing providers from soliciting criminal background information from prospective tenants, or basing renting decisions on a person’s criminal history.

The “adverse actions” defined in the law are actions housing providers should avoid in their renting procedures and property management duties. This includes refusing to rent to an applicant, renting on less favorable terms, or refusing to allow a tenant to have a close family member in their unit as long as the tenant also remains in the unit – if any of these actions were based on the tenant or applicant’s criminal history.

“Criminal history” is itself defined as any information, received formally through a background check, informally from a third party, or directly from the tenant or application, which pertains to any convictions or arrests of that person, any diversion or judgment deferral programs, or involvement in the juvenile justice system.

It is crucial to note that it is not enough for housing providers to set aside information about criminal history when dealing with tenants. The Fair Chance law imposes important restrictions on housing advertising and applications, before any rental agreement is ever signed! The law prohibits advertisements that state that persons with criminal history should not apply, and requires that a multilingual notice of the Fair Chance law be included in the housing provider’s rental application and posted in any location, physical or electronic, where rental applications are accepted or received. In addition, the application itself cannot require the applicant to provide information about their own criminal history.

The law does contain many important exceptions. It does not apply to single family homes, duplexes, or triplexes, if any of these are also occupied by the owner. It also does not apply to units that the owner has expressly reserved the right to move back into, or to master tenants subleasing a unit that they continue to occupy (similar to an owner-occupant, as above.)

The Fair Chance Ordinance, as a local law, also cannot prohibit criminal background checks when they are required by State or Federal law. When such checks are required, e.g. for sex offenders in public housing, the applicant is required to be informed that a check will be performed, and the housing provider must have written consent to perform the check, or permit the application to withdraw their application prior to the check. If the applicant is rejected based on their criminal history, the law requires an explanation of the denial, and disclosure of the information that the denial was based on.

If a housing provider violates the Fair Chance Ordinance, they may be liable for several types of damages. If the law is enforced by the City of Oakland, the City may fine a housing provider $1,000 for each violation, recover administrative costs, or issue a warning in lieu of such fines and costs. Alternatively, a lawsuit may be brought by an individual, a housing advocacy group, or even the City itself, to recover the greater of either: three times the actual damages suffered by the tenant, or three times the monthly rent for the tenant’s unit, or three times the fair market value (as calculated by HUD) for the unit in question. A court may impose punitive damages against the housing provider (but not punitive and treble damages at the same time) along with attorney’s fees to the prevailing party. Finally, the City may choose to prosecute violations of the Fair Chance Ordinance under certain circumstances as criminal infractions or as a misdemeanor.

To avoid these penalties, Oakland housing providers should incorporate the Fair Chance multilingual postcard available on the City of Oakland’s website into all rental application materials and websites. Housing providers should review all application materials to ensure that information about the applicant’s criminal history is not solicited or required as part of the application.

If the tenant applications or screening is handled by a third-party service or vendor, the housing provider should immediately discontinue any services or application forms which violate the Fair Chance Ordinance. Make sure that you, as the landlord, can read and review precisely what questions will be on any third-party tenant screening form or rental application. Also consider whether the terms of use for any such screening service requires you, as the landlord, to indemnify the service against any civil liability. If so, you may be liable for that service’s breach of the law!

If any information about an applicant or tenant’s criminal history is received, it must be kept for 3 years, but should not inform any adverse action towards the tenant or applicant unless required or authorized by State or Federal law. Every housing provider should consult with an attorney before handling or considering criminal history for any applicant or existing tenant. While this law is currently applicable only in Oakland, this is an area of growing concern and it is reasonable to expect that similar regulations will expand locally or possibly statewide in coming years.

© 2020 by Fried & Williams LLP. All Rights Reserved. The information contained in this article is general in nature. For advice on any particular matter, please consult with our attorneys because the facts of your situation may be unique and the law changes from time to time

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