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Rent to Illegal Aliens? Landlord, You May be Penalized

Photo by: James Clayton

Recently, the U.S. Supreme Court struck down down several portions of Arizona’s immigration bill, holding that three of the four challenged sections were preempted by federal law.

Federal preemption severely limits what state and local governments can do in terms of creating laws intended to identify illegal aliens or punish those who knowingly or recklessly employ, transport or shelter them.  Even state laws that directly copy federal law are held preempted, because Congress has “occupied the field.”  A few weeks ago, I attended a meeting between legislative staff and a member of the House to discuss a potential bill draft that would attempt to address the problems created by the presence of illegal aliens in North Carolina.  The House member handed us a lengthy outline of what the member hoped to accomplish in the bill, but as the staff looked through the outline and answered the member’s questions, it quickly became clear that much of the proposed plan had little chance of surviving the inevitable challenge in court, largely because of federal preemption.

Among the numerous state and local attempts to create laws that will survive a federal preemption challenge, a few cities and states have tried to punish landlords for renting to illegal aliens.  If the illegal aliens cannot find a place to live, then they will have to settle somewhere else, if not eliminating the problem then at least moving it to another city or state.  Most of the cities that have passed such ordinances have attempted to use a permit or licensing system that requires disclosure of immigration status in order to qualify for a lease.  Several cases have been decided in the past few years addressing these laws.

Alabama H.B. 56

At the state level, Section 13(a)(4) of Alabama’s House Bill (H.B.) 56 makes it unlawful to “harbor an alien unlawfully present in the United States by entering into a rental agreement . . . with an alien to provide accommodations, if the person knows or recklessly disregards the fact that the alien is unlawfully present in the United States.”  Violation of this section is a Class A misdemeanor “for each unlawfully present alien, the illegal presence of which in the United States and the State of Alabama, he or she is facilitating or attempting to facilitate.”  The penalty is upgraded to a Class C felony “when the violation involves 10 or more aliens.”

A U.S. District Court granted the United States’ motion for a preliminary injunction, explaining that Alabama’s “H.B. 56 § 13 is preempted because it prohibits conduct specifically authorized under the federal harboring and transportation scheme, creates “additional” regulations for conduct not prohibited by the federal harboring and transportation scheme, “inconsistently with the purpose of Congress,” and allows the Alabama courts to interpret an Alabama-specific transportation and harboring scheme “unconstrained by the line of federal precedent” interpreting the federal harboring and transportation scheme.  The decision has been appealed to the 11th Circuit.

Fremont, Nebraska

An ordinance of the city of Fremont, Nebraska, makes it “unlawful for any person or business entity that owns a dwelling unit in the city to harbor an illegal alien in the dwelling unit, knowing or in reckless disregard of the fact that an alien” is unlawfully present in the United States.  “Harboring” is defined to include “both the owner’s direct renting or leasing, as well as the owner’s knowing or reckless permitting of such occupancy.”  All persons 18 or older are required by the ordinance to obtain an “occupancy license” through the local police department before occupying a residential lease or rental unit, and applicants must disclose, among other things, the “occupant’s country or citizenship” and “either a signed declaration that the applicant is a United States citizen or national or an identification number assigned by the federal government establishing lawful presence.”  Lessors must obtain copies of occupancy licenses for each known occupant of the dwelling unit in order to rent or lease, and must not knowingly permit occupants without licenses.  The penalty for violation of any part of the licensing requirement is a fine of $100 per occupant per day, starting on the 46th day after a revocation notice has been issued.

The District Court permanently enjoined the provisions “prohibiting the harboring of illegal aliens, providing for the revocation of occupancy licenses, and providing for certain penalties following the revocation of occupancy licenses” because “those provisions are conflict-preempted by the Immigration and Nationality Act” and “violate the Fair Housing Act.”  But the Court also held that “to the extent that the Ordinance requires persons seeking residential occupancy permits to provide certain information concerning their immigration status, or lack thereof, and requires [police] to communicate such information to federal authorities, the Ordinance is in harmony with INA’s objective of facilitating cooperation between officers and employees of states and political subdivisions and federal immigration authorities regarding the identification of individuals who may be in the United States unlawfully.”

Hazleton, Pennsylvania

A city ordinance in Hazleton, Pennsylvania makes it “unlawful for any person or business entity that owns a dwelling unit in the City to harbor an illegal alien in the dwelling unit, knowing or in reckless disregard of the fact that an alien has come to, entered, or remains in the United States in violation of law.”   Legal immigration status is a condition precedent to entering into a valid lease.  A lease is deemed breached if entered into by persons lacking lawful status.

Any City resident may file a complaint alleging that a property owner is harboring an illegal alien.  Upon receiving such a complaint, the Code Enforcement Office may request information identifying the tenant, which the owner must provide within three days.  “The City then verifies the legality of the tenant’s immigration status with the federal government, pursuant to 8 U.S.C. 1373(c).”  If the federal government confirms that the tenant lacks lawful immigration status, the property owner must evict that tenant within five days.  If the owner fails to do so, the City suspends the owner’s rental license and bars the owner from collecting any rent for the applicable dwelling unit.  These sanctions end one business day after the owner submits an affidavit affirming the violation has been corrected.  Any subsequent violation subjects the owner to a fine of $250 per day per “adult illegal alien” harbored in a dwelling unit, as well as a suspension of the owner’s rental license.

The Third Circuit held that the city ordinance was preempted by federal immigration law and violated the Supremacy Clause.  “To be meaningful, the federal government’s exclusive control over residence in this country must extend to any political subdivision.  Again, it is only the City of Hazleton’s ordinance that we must consider.  If the City of Hazleton can regulate as it has here, then so could every other state or locality.”  The Court notes that the Supreme Court has not defined “harboring,” and the Circuit courts are divided.  The Second and Third Circuits define “harboring” as “requir[ing] some act of obstruction that reduces the likelihood the government will discover the alien’s presence.”  The Court adds, “It is highly unlikely that a landlord’s renting of an apartment to an alien lacking lawful immigration status could ever, without more, satisfy this definition of harboring.”

Farmers Branch, Texas

An ordinance of the City of Farmers Branch, Texas, attempts to condition residence in rental housing within the City on obtaining a residential occupancy license issued by the City’s building inspector.  The Ordinance declares that the residential occupancy licenses are the type of license or local public benefit for which aliens not lawfully present in the United States are ineligible.  While the building inspector is required to issue a residential occupancy license to all who complete the application and pay the required five dollar fee, he is required—for any applicant who does not declare himself or herself to be a citizen or national of the United States—to verify with the federal government pursuant to 8 U.S.C. § 1373(c) “whether the occupant is an alien lawfully present in the United States.”  The Ordinance further sets forth procedures for the building inspector to revoke the residential occupancy license for any alien the federal government determines to be not lawfully present in the United States.

The Fifth Circuit held that the ordinance was unconstitutional “because the sole purpose and effect of this ordinance is to target the presence of illegal aliens within the City of Farmers Branch and to cause their removal, it contravenes the federal government’s exclusive authority over the regulation of immigration and the conditions of residence in this country, and it constitutes an obstacle to federal authority over immigration and the conduct of foreign affairs.”

Conclusion

In all of the cases listed above and at least one other not listed here, federal courts have consistently held that laws which purport to penalize landlords for renting to illegal aliens are preempted by federal immigration law.  The courts have repeatedly emphasized the federal government’s “exclusive control” over the regulation of immigration.  In general, it appears that the states are limited to verifying the immigration status of aliens with the federal government.  Unless a change is made in the federal law, states cannot attempt to punish the “harboring” of illegal aliens, which for now includes rental agreements.

 

Jim Small, Former Senior Staff Writer
About Jim Small, Former Senior Staff Writer (8 Articles)
Jim graduated from Campbell Law School in 2013 and received his Bachelor of Arts in Prelaw from Bob Jones University in South Carolina. He worked as a Research Assistant to Professor Amy Flanary-Smith, conducted research for McCuiston Law Offices in Cary, NC, and completed an externship in the Research Division of the North Carolina General Assembly.
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