4th Circuit: Anti-Harboring Statute Can’t Justify Landlord’s Documentation Policy

A three-judge panel for the U.S. Court of Appeals for the Fourth Circuit recently held that a landlord did not meet its burden to show that a policy requiring all adult tenants to provide proof of their legal status in the U.S. served a legitimate business need despite the tenants’ claim that the policy resulted in a disparate impact on Latino tenants in violation of the Fair Housing Act.  The landlord had raised the “business necessity” defense under the Fair Housing Act, arguing that its policy was necessary to avoid prosecution under a federal anti-harboring statute. 

The landlord’s policy required tenants seeking to renew their leases to identify all adult occupants of the residence and provide documentation of each adult’s lawful status or, upon notice, vacate the residence.  The landlord allegedly converted the lease of tenants who neither complied with the documentation policy nor vacated their residence into a month-to-month lease and increased their rent by $100 per month. The district court granted summary judgment in favor of the landlord after finding that, although the tenants demonstrated that the policy caused a disproportionate number of Latinos to face eviction compared to non-Latinos, the policy was reasonably necessary for the landlord to avoid criminal liability under a federal statute prohibiting the harboring of undocumented immigrants.

On appeal, the Fourth Circuit panel reversed the district court’s grant of summary judgment for the landlord, finding that the ruling was based on a misunderstanding of the anti-harboring statute.  The Fourth Circuit also held that the record on summary judgment was insufficient to establish the landlord’s “business necessity” defense, wherein, under the Fair Housing Act’s burden-shifting framework for disparate impact claims, a discriminatory housing policy can be allowed to stand if it is necessary to achieve a valid business interest.  The panel noted that the anti-harboring statute does not apply to landlords merely leasing to undocumented immigrants, but to those who knowingly or recklessly conceal, harbor, or shield such persons from detection, and that landlords have no affirmative verification obligation akin to that of employers.  The panel also noted that the documentation policy would not realistically serve to avoid liability under the anti-harboring statute because the landlord did not evict non-complying tenants; it instead raised their rent and continued to knowingly house them. 

The case will be remanded to the district court for further proceedings.