If Escondido's new rental law overcomes legal hurdles and goes into effect, it could put landlords in the tenuous position of violating the city law or violating state and federal fair housing laws, critics say.

The law would bar landlords from renting to illegal immigrants. Those who violate the law could face fines and have their business license suspended. A memorandum issued by City Manager Clay Phillips on Nov. 10 recommended that landlords verify each applicant's legal status before leasing to avoid a potential violation of the city's law.

But fair housing advocates say landlords have to be careful in how they conduct immigration checks or they could run afoul of federal law.

Escondido's rental law was challenged in federal court by civil rights groups, including the American Civil Liberties Union and the Mexican American Legal Defense Fund. The groups say the law is unconstitutional, discriminatory and inhumane. A judge placed a temporary hold on the law last week.

The federal Fair Housing Act prohibits discrimination by landlords due to an applicant's race, color, religion, sex, national origin, disability and familial status, said Chantae Goodloe, spokeswoman for the Department of Housing and Urban Development. The law applies to all people seeking housing regardless of immigration status, she said.

Federal regulations say landlords may ask about immigration status, but to do so legally, they have to ask the question of all applicants.

"If you are going to ask, you have to ask everyone," Goodloe said.

Advocates say the law is likely to result in closer scrutiny of Latinos and discrimination against Latino applicants.

"It encourages landlords and residents in the city of Escondido to identify and file complaints against individuals they believe to be illegal immigrants, which will undoubtedly lead to discrimination against tenants based on race, color or national origin," said Kristina Campbell, an attorney with the Mexican American Legal Defense Fund.

Supporters of the law, including three of the five City Council members, said the law aims to eliminate overcrowding in Escondido apartments. They say thousands of illegal immigrants in the city contribute to a deteriorating quality of life for residents.

Phillips said in his memorandum to city staff that landlords are encouraged to screen all applicants to avoid discrimination against any particular group.

However, the city's concern will be enforcing the law, not worrying about whether individual landlords are discriminating against a group of people, he said in an interview last week.

"There are a lot of strict guidelines with regard to fair housing, and if someone feels they weren't treated fairly, they should follow up with the appropriate authorities," Phillips said.

The federal fair housing law is not clear cut. Even if landlords ask all applicants their immigration status, the screening could still violate the federal law, said David Kline, an enforcement specialist with the Fair Housing Council of San Diego. The council is part of a coalition suing Escondido.

"If a landlord uses a screening process based upon immigration status, and if that screening process effectively eliminates people of one nationality from the pool of applicants, then that screening process may generally be held unlawful," Kline said.

Goodloe, with the department of Housing of Urban Development, disagreed with Kline's interpretation. She said it is not a violation as long as all the requirements are equal for all applicants.

There are an estimated 12 million illegal immigrants in the United States, according to a study by the Pew Hispanic Center released in March. More than half, about 6.2 million illegal immigrants, came from Mexico, according to the study.

The U.S. Census Bureau estimates that there were about 26.7 million people of Mexican descent living in the country in 2005.

Gerardo Gonzalez, former director of the National Latino Research Center at Cal State San Marcos, pointed to studies that found a higher incidence of housing discrimination aimed at Latinos and blacks compared to whites.

A 2002 study by the Department of Housing and Urban Development reported that when blacks and Latinos visit rental offices, they had a "significant risk of receiving less favorable information and treatment than comparable white customers."

Black customers were given unfavorable treatment at 21 percent of their inquiries, including telling the customer that the unit had already been rented. One in four Latinos received unfavorable treatment, according to the study.

Gonzalez said that adding Escondido's rental law to the mix is likely to result in higher incidence of discrimination toward Latinos.

Discrimination "is still a reality, apart from the ordinance. That's what the study says," Gonzalez said. "The ordinance will put other obstacles and barriers."

Staff writer David Fried contributed to this story. Contact staff writer Edward Sifuentes at (760) 740-3511 or esifuentes@nctimes.com. Comment at nctimes.com.