Legal aid groups in Chicago filed a lawsuit and a complaint with the Department of Housing Preservation and Development on Tuesday against corporate landlords for automatically rejecting prospective tenants with “any prior connection to an eviction case.”

Legal Aid Chicago filed a federal lawsuit against Hunter Properties, Inc. for rejecting renters in Cook County on the basis of having an eviction. In addition, HOPE Fair Housing Center filed a federal complaint against Oak Park Apartments for having a blanket policy against previous evictions. Both legal claims allege that the practice has a disparate impact on Black and Latino renters and violates the 1968 Fair Housing Act.

A ruling in the plaintiff’s favor could have an impact on millions of renters across the country and potentially deter blanket rejections based on eviction history, which are unfortunately common. 

According to the Legal Aid Chicago lawsuit, Hunter Properties operates more than 2500 apartments in Chicago. Legal Aid alleges that Hunter was rejecting all applicants for ever having an eviction filing against them, including cases where the landlord withdrew the filing or the judge tossed out the case.

According to the filing, Hunter rejected applicants “regardless of how long ago the eviction case may have occurred, and irrespective of a tenant’s current ability to pay rent or otherwise fulfill the terms of a residential lease.”

Legal Aid Chicago alleges that this practice had a disparate income on Black tenants and especially Black women, 1 in 5 of whom experience an eviction filing at some point in their lifetime. According to Legal Aid, Black people make up 33 percent of renters in Cook County but 56 percent of people who were served with eviction fillings between September 2010 and March 2023. 33 percent of those filed with an eviction in the same time period were Black women, despite making up 22 percent of all renters in Cook County.

The complaint includes a screenshot of the “terms and conditions” section on an apartment application on Hunter’s website that says, “prior eviction filings will result in denial.” The company’s application portal asks renters “have you ever been evicted?” with a “yes” or “no” option and requests background checks from third party screening companies, including CoreLogic and TransUnion. The lawsuit says these reports include past eviction filings, including ones that are sealed. Hunter charges a $70 application fee that is not refunded if an application is denied.

Legal Aid is acting as plaintiff in this lawsuit on the basis that Hunter’s screening practices have tied up the nonprofit’s resources. According to the filing, Legal Aid has worked to seal over 800 tenant eviction filings, but Hunter is still denying renters on the basis of having a sealed eviction or by seeking information on the filings from past landlords. The nonprofit is asking the court to declare Hunter’s practices unlawful and is requesting financial compensation.

Hunter Properties did not return a request for comment from Motherboard. According to the company’s website, it uses credit, eviction history and criminal background checks to determine eligibility. If a tenant secures an apartment, Hunter requires a $400-500 “nonrefundable administrative fee.”

The complaint against Oak Park Apartments, which operates 90 multi-family apartment buildings in the Chicago suburb of Oak Park, similarly alleges that the company rejects all applicants with an eviction history. HOPE alleges in the complaint to the Department of Housing and Urban Development that the practice is contributing to ongoing racial segregation in the suburb by disproportionately rejecting Black renters.

While the nonprofit says this is the first federal Fair Housing complaint against no-evictions policies, it points out that ”such no-evictions policies are all too common, if not standard operating procedures for most rental property owners and property management companies around the country.”

On July 25, the day the federal complaint was filed, Oak Park’s website explicitly stated “You cannot have a bankruptcy, judgment, eviction, foreclosure, history of late rent payments or short sale.”  Later the same day, the web copy was changed to say that applicants cannot have an “active eviction (although this can be overridden with proof of resolution).”

Oak Park’s site also says that they do not accept credit scores below 650 or people whose credit reports show “collections, judgments and late payments.” The company charges a $50 application fee.

HOPE’s complaint states that it sent “testers”—applicants of different backgrounds often deployed in civil rights cases to evaluate disparate treatment—to apply for Oak Park Apartments between June 14 and July 21, 2022, and found that there was no opportunity for applicants to present mitigating information about an eviction history. The testers were told that even having an eviction filing against them without a judgment automatically disqualified them, the complaint alleges.

Oak Park Apartments did not return a request for comment left via voicemail in time for publication.

While the federal government and courts have never determined no-eviction policies are explicitly illegal, HUD has issued guidance cautioning that such blanket policies could have a disparate impact and potentially violate the Fair Housing Act, which could add strength to HOPE and Legal Aid’s cases. According to HUD’s guidance, “housing providers should consider the accuracy, nature, relevance, and recency of negative information rather than having any negative information trigger an automatic denial.”

HUD has also cautioned against using third-party screening software, particularly ones that utilize algorithms and could potentially be biased against certain renters based on race.  According to a 2022 report from the Consumer Financial Protection Bureau, “Most tenant screeners’ business models appear to rely on the low-cost automated retrieval of court records for criminal and eviction records, without the more costly manual verification needed to ensure accuracy.” In 2020, the Federal Trade Commission filed a lawsuit against companies that screen tenants for eviction history for not providing accurate information.

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