The US Fourth Circuit Court of Appeals reversed Tuesday a lower court order and ruled against a trailer park in a case involving the application of the Fair Housing Act (FHA).

The issue involved Waples Mobile Home Park, which had required all adult tenants to provide proof of their legal status in the US in order to renew their leases. A federal district court granted summary judgment in favor of the company, finding that the policy was reasonably necessary for the company to avoid criminal liability under federal statute 8 USC § 1324, which prohibits the harboring of undocumented immigrants. If tenants did not comply, the park converted tenants’ leases from a year-long lease to month-over-month lease and increased the price of rent by $100 per month.

The court found that the policy had a disproportionate impact on Latino residents. The court followed a three-step burden-shifting framework commonly used in FHA cases, finding that the families successfully demonstrated a causal connection between Waples’ policy and a disparate impact on Latino residents, which satisfied the first step. The court, however, disagreed with the lower court and found that Waples had not sufficiently provided a valid interest served by its policy and disagreed that the policy was justified by the risk of prosecution under the federal anti-harboring statute.

The US Department of Justice filed an amicus brief in the case in support of the families, and noted that “residential landlords do not ordinarily risk exposure to liability under [the anti-harboring statute] merely for failing to proactively verify their tenants’ immigration statuses.” The court concluded that Waples’ policy “did not serve in any realistic way to avoid liability under the anti-harboring statute” and reversed the district court’s holding.