What Immigration Reform Means to Landlords

Despite legislation, property managers shouldn't ask for proof of legal status, industry experts say.

Last April, Arizona passed Senate Bill 1070, the country’s toughest statute on illegal immigration. Although its most controversial provisions have already been blocked from enforcement by a federal judge, at least six other states plan to introduce similar legislation this year. And some in the multifamily housing industry worry that the issue could affect property owners and managers.

The Arizona law does not specifically address landlord-tenant matters, but one portion—Section 13-2929—makes it a crime to “conceal, harbor or shield” an illegal immigrant if the person doing so “knows or recklessly disregards” the fact that the immigrant is illegal. This has led some landlords and multifamily property owners to fear they could be in violation of the law if they rent to an illegal immigrant.

But are their fears justified? Not necessarily, says Joshua Deere, Esq., an Arizona attorney who specializes in landlord-tenant law. “To find a landlord guilty of violating this statute, the government would either have to prove that he or she had actual knowledge that the tenant was illegal, or that the tenant’s illegal status was so blatantly obvious that the landlord was essentially turning a blind eye to that fact,” he explains.

Deere adds that Section 13-2929 includes a preface suggesting that for someone to be in violation of this statute, he or she must already be committing a criminal offense while “concealing, harboring or shielding” the illegal immigrant. “I think this makes it even less likely that renting to an illegal would put you in violation of the law,” notes Deere. “After all, renting a unit is hardly a crime.”

“Show us your papers”—or not

Some property owners and managers wonder if they should ask potential tenants for documents showing proof of legal status before renting to them. Doing so could protect them from unwittingly housing illegal immigrants, they reason.

Not so fast, industry experts say. “How can an apartment owner assess whether an applicant’s documentation is authentic?” asks Betsy Feigin Befus, an attorney who is the federal lobbyist on immigration issues for the National Multi Housing Council (NMHC) in Washington, D.C. “That’s the job of an immigration officer. We can’t be expected to deal with potentially fraudulent documents—that’s not our business.”

Other legal experts say requesting documents could actually backfire, providing less legal protection to property owners rather than more.

With regard to the Arizona law, Deere observes that “if the landlord doesn’t ask for documents showing legal status, and the applicant doesn’t offer them, it’s a lot less likely the landlord can be accused of knowingly or recklessly disregarding the applicant’s immigration status.” By contrast, if landlords do ask for documents, then they run the risk of falling into the “having knowledge or reckless disregard” category.

Nadeen Green, senior counsel at For Rent Media Solutions, an Atlanta-based marketing and advertising company serving the multifamily housing industry, goes even further in her view that asking for documentation would harm rather than help property owners.

“I think landlords should ignore the legal-illegal issue, because once they start obsessing on it, the government will start making it a requirement and it will become their responsibility,” she says. “The standard in the industry is that applicants have to validate their ability to pay by showing W-2 forms and so on. Most of the time, that will keep out a significant percentage of illegals, so good business practices can address this matter without landlords having to get into the issue of whether or not someone has the right to be here.”

A further argument against asking for proof of legal status is the Fair Housing Act, which prohibits landlords from discriminating against potential renters because of national origin. According to Greg Brown, vice president of government affairs at the National Apartment Association (NAA) in Arlington, Virginia, if property owners were to verify the immigration status of potential tenants, they would have to do so for all applicants in order not to violate the FHA. “That would place a tremendous administrative burden on owners and managers,” he says.

Who has jurisdiction?

The federal government has made clear its view that state and local municipalities do not have the authority to create and enforce immigration policy. It was on this basis that the Obama administration sued to block enforcement of Arizona’s new law, and by and large industry experts believe that an overarching federal law would better serve the multifamily housing industry.

“If you have this patchwork of immigration laws, that makes life very difficult for apartment owners and operators, especially those who operate across state lines,” says Brown. “A federal law that applies everywhere would be preferable.”

But whether Congress has the wherewithal to overhaul immigration is another matter, and recent events suggest this is unlikely to happen. “The DREAM Act”—which would have created a path to citizenship for undocumented immigrant college students who came to this country as children—“was widely viewed as a less controversial first step to getting immigration reform going again, and it failed to pass,” notes the NMHC’s Befus.

On the other hand, the U.S. Supreme Court recently heard oral arguments regarding a 2007 Arizona law that required employers to check the legal work status of their employees. “The decision in that case may be very significant as far as determining if local jurisdictions have the authority to create and enforce immigration laws, or if this is solely a federal matter,” Befus says. “But it may not be decided for months.”

Legal precedents

A handful of communities around the country have passed laws designed to stop landlords from renting to illegal immigrants; so far, however, none of the laws have been implemented.

In 2006, Hazleton, Pennsylvania passed several ordinances targeting the undocumented. The laws required potential tenants to get a permit—partly predicated on their immigration status—before they could rent an apartment, and also allowed the city to suspend the business licenses of landlords found to be “harboring” illegal immigrants.

The Hazleton laws were never enforced because of various legal challenges, and last September, a federal appeals court upheld a ban imposed in 2007 by a lower court. Similar legislation passed around the same time in Escondido, California was also set aside and never implemented because of legal challenges.

The Dallas suburb of Farmers Branch, Texas has attempted—and failed—to enforce various bans on renting to illegal immigrants since 2007. Under the latest version of the ban, renters would have had to pay a $5 fee for a residential occupancy license from the city’s building inspector, who would be responsible for verifying the renter’s immigration status with federal officials. (Earlier versions of the law placed the onus on landlords to check an applicant’s immigration status.)

A federal judge ruled the Farmers Branch ordinance unconstitutional in March of 2010, but city officials have vowed to continue the fight. A similar law was passed in Fremont, Nebraska—a town just outside Omaha—last June, but was put on hold shortly afterward.