NYC Limits Housing Discrimination Based on Criminal Background: Is ‘Criminal History’ History?

Takeaways

• The NYC Fair Chance Housing Act prohibits discrimination against prospective and current housing occupants based on criminal history, with certain exceptions.
• The prohibition covers most housing providers authorized to sell, rent, or lease housing accommodations.
• Providers should consider reviewing their policies and procedures related to the process of requesting and reviewing criminal histories of prospective purchasers, renters, and lessees to ensure compliance with the Act.

Related links

• New York City Fair Chance Housing Act, Local Law 24
• Fair Chance Housing Notice

Article

Housing providers are required to comply with the New York City Fair Chance Housing Act, Local Law 24, which prohibits discrimination toward prospective and current housing occupants based on criminal history, if they choose to do a background check. Covered providers must ensure they are aware of the Act’s parameters.

Who Is Covered?

Compliance under the Act extends to owners, lessors, lessees, sublessees, assignees, co-op and condo boards, and agents, employees, and real estate brokers of housing agencies authorized to sell, rent, or lease housing accommodations (“Providers”). The Act also applies to prospective purchasers, renters, and lessees of housing accommodations.

Prohibited Considerations

Providers are prohibited from engaging in the following conduct based on criminal history:

1. Discriminating against any individual in the terms, conditions, or privileges of a sale, rental, or lease; 
    
2. Refusing to sell, rent, lease, approve the sale, rental, or lease or to deny a housing accommodation; 
    
3. Representing to any individual that any housing accommodation is not available for inspection, sale, rental, or lease; 
    
4. Directly or indirectly excluding applicants with a criminal history in advertisements for the purchase, rental, or lease of such a housing accommodation; and
    
5. Conducting criminal background checks in connection with a housing accommodation, except as permitted below.

Permitted Considerations

Of course, the Act does not require Providers to completely ignore the potential for a legitimate adverse action based on criminal history. Providers may:

1.    Consider “reviewable criminal history” including: 

a.    Convictions registered on the New York, federal, or other jurisdictional sex offense registries; 

b.    Misdemeanor convictions where fewer than three years have passed from the date of release from incarceration, or the date of sentencing for an individual who was not sentenced to a period of incarceration; and

c.    Felony convictions where fewer than five years have passed from the date of release from incarceration, or the date of sentencing for an individual who was not sentenced to a period of incarceration.

2.    Take any lawful action against an individual for acts of physical violence against other residents or other acts that would adversely affect the health, safety, or welfare of other residents; and

3.    Make statements, deny housing accommodations, or conduct criminal background checks where required or specifically authorized by applicable laws.

Criminal History Review Process

Providers must give prospective and continuing occupants notice of their intent to conduct criminal background checks, along with a written copy of the city’s Fair Chance Housing Notice.

Providers may conduct criminal background checks only after:

1. A seller has accepted an offer; or
    
2. The Provider has provided the prospective occupant(s) a rental or lease agreement.

Providers may revoke an offer based on a “material” omission, or misrepresentation, or change in qualifications for tenancy that was unknown at the time of the conditional offer.

After providing notice of intent to conduct a criminal background check, but before taking an adverse action based on the results, Providers must provide the individual:

1. Written copies of any information or records about reviewable criminal history they intend to rely on for the adverse action; 
    
2. Written copies of any information about the individual’s criminal history received, other than their reviewable criminal history, even if it was not considered; and 
    
3. Notice that the individual has five business days to identify errors in the criminal history information and submit supplemental information in support of their application.

Additionally, prior to taking any adverse action based on reviewable criminal history, Providers must conduct an individualized assessment of the individual’s reviewable criminal history and any timely information submitted by the individual. This assessment must be memorialized in writing, with the reason for the adverse action, including:

1.    A copy of supporting documents that were reviewed; and 

2.    A written statement of the reason for the adverse action, demonstrating: 

a.    How the individual’s reviewable criminal history is relevant to a legitimate business interest of the property owner; and 

b.    How any information submitted in support of such individual’s tenancy was considered by them.

Potential Liability

Providers can be liable for civil penalties for relying on information other than reviewable criminal history. Further, Providers can be liable for third party violations if third parties are used to conduct consumer background check or criminal background checks on their behalf.

Next Steps for Providers

New York City Providers should consider reviewing their policies and procedures related to the process of requesting and reviewing criminal histories of prospective purchasers, renters, and lessees to ensure compliance with the Act. In addition, if Providers are using consumer reporting agencies to run the criminal background checks, they must ensure compliance with the federal Fair Credit Reporting Act (FCRA), 15 U.S.C. §§ 1681, et seq., and any applicable state mini-FCRA laws related to obtaining consent. Contact a Jackson Lewis attorney if you have questions about the new obligations under the New York City Fair Chance Housing Act.