Q: If a prospective tenant of mine has questionable credit, an old felony conviction, or a roommate that does, what right does the HOA have in refusing occupancy to my prospective tenant?
A: First and foremost, you should confirm that the Declaration of Covenants grants the Association the authority to approve or disapprove leases. Many times, Associations think they have such authority but if it is not clearly expressed in the Declaration they do not. If the authority does exist, then the Board can typically deny a lease for good cause. Sometimes the good cause reasons are listed in the Declaration and sometimes they are listed in a Board resolution. The Department of Housing and Urban Development issued a Memorandum some years ago regarding blanket denials of convicted felons. It is HUD’s position that while convicted felons are not a protected class and thus it is not illegal to discriminate based on such status the effect can have a disparate impact on persons who do belong to a protected class. So, the Association should not have blanket policy of always denying convicted felons but should consider each application on a case by case basis and make a reasonable determination as to the adverse effect on the community. For example, a 30 year old felony conviction for stealing a car should be considered differently than a recent conviction for robbing a bank, murder or a sexual offense. Similar logic should be applied when using a credit score for the basis of denial.
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