The Fair Chance for Housing Act, which goes into effect on January 1, 2025, introduces new legal requirements for Landlords, significantly changing how you evaluate potential tenants.  While the law aims to create more equitable housing opportunities and reduce barriers to housing for individuals with past convictions, it also places new responsibilities on Landlords.   This act applies to Landlords of rental units as well as Cooperative units, condominiums, and home sales.

Key Provisions and What They Mean for You

1. Restrictions on Criminal History Inquiries:
   • You can no longer ask about or consider a tenant’s criminal background during the application process.
   • Criminal background checks are generally prohibited.
   • You may never change the terms of a sale or lease because of a conviction history

1. Exceptions for Certain Cases:
   • There are a few exceptions, such as:
     • Renting units in owner-occupied buildings with two or fewer units.
     • Applicants with convictions that require registration on a sex offense at the time of the background check
     • Felony convictions from the past 5 years and misdemeanor convictions from the last 3 years from the date of release of incarceration, or date of sentence if no incarceration, except for convictions that were sealed, non-criminal offenses, conduct related to reproductive or gender affirming care, for cannabis possession that does not constitute a felony in NYS, adjudications for juvenile offenses.
     • State or Federally funded housing providers are required or authorized to take specific actions related to criminal history.

1. Revising Applications and Notices:
   • Applications must be updated to eliminate questions about criminal history.
   • Only after a conditional offer has been made to a potential tenant and a copy of the Human Rights Notice linked here in NYC Fair Chance Housing Notice is provided to the potential tenant is it lawful for a covered housing provider to run a criminal background check.
   • In order to revoke a conditional order after running a criminal background check, you must first conduct an Individualized Assessment of the convictions to determine your effected Legitimate Business Interest AND how that Legitimate Business Interest is linked to the applicant’s individual history.
   • If after conducting the Individualized Assessment, you deny an applicant based on a permitted exception, you must provide the potential tenant with a copy of the criminal history information you received or reviewed along with a written statement explaining your decision to revoke the conditional offer based upon their conviction history and the link to the legitimate business interest. You must then provide the applicant 5 business days to respond with any errors in the conviction history, identify any information that should not have been considered, or provide any additional information that may support their application.

1. Penalties for Non-Compliance:
   • Civil penalties of up to $500 per day
   • Criminal penalties of up to two years in prison and fines up to $10,000
   • In cases tried before a HUD Administrative Law Judge, civil penalties of up to $23,011 for a first violation, increasing to $115,054 for third violations
   • In cases brought by the Justice Department, the civil penalties can be up to $150,000
   • Respondents who had violated the Fair Housing Act in the previous 5 years could be fined a maximum of $49,467, and respondents who had violated the Act two or more times in the previous 7 years could be fined a maximum of $98,935
   • DCR may impose civil penalties of up to $1,000 for a first offense, up to $5,000 for a second offense, and up to $10,000 for any subsequent offense

How to Protect Your Interests While Complying

As a landlord, staying compliant doesn’t mean compromising on property safety or tenant quality. Here’s how you can adapt:

• Focus on Other Screening Criteria:
  • While criminal history is off-limits, you can still assess applicants based on credit history, income, employment stability, and rental references.
• Update Policies and Train Staff:
  • Ensure all application forms and screening procedures comply with the law. Train property managers and leasing agents to understand and implement these changes effectively.
• Work with Legal Counsel:
  • Don’t hesitate to reach out to DNCT attorneys to ensure your screening processes are fully compliant while protecting your property and other tenants.

Additional information from the NYC Commission on Human Rights: 

NYC Commission on Human Rights: Fair Chance Act in Housing