Monday January 06, 2025
On January 20, 2024, the New York City Council passed the Fair Chance for Housing Act, which sets new requirements on how “housing providers” may use criminal background checks to determine an applicant’s eligibility to reside at their property. The term housing providers includes multifamily rental building owners, as well as condominium and cooperative boards.The Fair Chance for Housing Act supplements the Fair Chance Act, passed in 2015, which created similar protections for job applicants. The new law limits which convictions a condo/co-op board can consider “relevant” when deciding to reject an applicant:
The polarizing legislation has introduced new challenges and potential risks of litigation for boards that fail to comply or are accused by an applicant of discrimination based on criminal record.
FirstService Residential helps boards navigate this complex new requirement. Let’s take a closer look at how the Fair Chance for Housing Act may impact you and your residents.
*We recommend that all condominium and cooperative boards consult their building attorney on all matters related to compliance, potential liability, and unique legal considerations.
What is the Fair Chance for Housing Act?
As of January 1, 2025, New York City housing providers must first evaluate if an applicant is qualified before looking into their criminal history. Under this mandate, condo/co-op boards must review the applicant’s financial information, and all other aspects of an application, including an interview of the applicant if that is part of the board’s practice and provide a conditional acceptance of the applicant (in a condo a conditional waiver of the right of first refusal) before conducting a criminal background check. This conditional acceptance must be in writing and cannot be revoked except in the case of convictions of certain misdemeanors and felonies that have occurred within the last several years or sex offender crimes.In an interview with WNYC, Keith Powers, the New York City Council Member who introduced the Fair Chance for Housing Act, discusses the reasoning behind the bill and what he hopes to achieve.
What kinds of convictions are protected under the Fair Chance for Housing Act?
- Misdemeanors if the applicant has been free from incarceration for three years with no new convictions*
- Felonies if the applicant has been free from incarceration for five years with no new convictions*
- Some out-of-state convictions, including certain cannabis possession convictions and other convictions related to reproductive or gender-affirming care*
*It’s best practice, especially considering the many nuances of the law’s requirements, to consult your building attorney before rejecting an applicant based on criminal history and communicating that rejection.
What information can boards consider before accepting an offer?
The Fair Chance for Housing Act pertains only to the review of an applicant’s criminal history. Traditional background check information including credit score, rental history, reference checks, and income can still be considered before an application is approved or rejected.In New York State, co-ops can reject an applicant for any reason or no reason, but they cannot discriminate against an applicant on the basis of their status as a member of a protected class. This includes decisions based on race, religious creed, color, national origin, ancestry, physical or mental disability, medical condition, genetic information, marital status, sex, gender identity or expression, age, sexual orientation, or military status.
Additional protections include pregnancy, childbirth, breastfeeding, and related medical conditions. While not illegal, boards should also avoid asking applicants if they have children. The Fair Chance for Housing Act adds to this list of limitations an applicant’s criminal history with the exceptions of crimes noted above.
Condo boards should also adhere to these requirements when considering their right of first refusal to avoid accusations of discrimination against a protected class and unfair application standards.
What are the new guidelines for conducting criminal background checks?
Under the Fair Chance for Housing Act, after providing the conditional acceptance, boards must inform prospective residents of the board’s intent to conduct a criminal background check, before doing so. Boards also must provide applicants with a copy of the Fair Chance Housing Notice, which summarizes their rights.If a board determines to revoke the conditional acceptance, they must provide a written statement explaining why their history is relevant and how their supplemental information was considered when the final decision to revoke the acceptance was made. Boards must also include any criminal history information reviewed or received, including information that did not influence their decision.
The applicant has five business days to respond with corrections, mitigating information, or evidence of rehabilitation, which the board must consider. .
FirstService strongly recommends that boards determining to revoke the conditional acceptance engage their attorney to prepare a written statement and send the statement on behalf of the board. This will help ensure the final decision and verbiage meet all legal requirements of the law and do not introduce unnecessary risk to the board.
What qualifies as a “criminal background check”?
A criminal background check does not have to be a formal report from an accredited agency. This law defines a criminal background check as:- Asking an individual, orally or in writing, if they have a criminal history
- Searching publicly available records, including through a third party, such as a consumer reporting agency, private database, or website, for information about an individual’s criminal history
- Otherwise gathering records or information relating to an individual’s criminal history. This can include a general internet search and identifying an applicant on social media
Are there any exceptions to the Fair Chance for Housing Act?
The Fair Chance for Housing Act does not apply to:- Occupants or owners seeking roommates to live with them in shared housing.
- Two-family homes, where primary occupants include the homeowner or members of the homeowner’s family.
- Any instance where federal, state, or local law requires denial of housing based on criminal history.
Could a condo/co-op board be held liable for providing housing to someone with a criminal history?
If any legal claim results from a resident with a criminal history, the Fair Chance for Housing Act states that covered entities – including condo/co-op boards, building owners, landlords, brokers, agents, and others – won’t be held liable based on claims that they shouldn't have sold, rented, or leased housing to someone with a criminal history. This shields boards that choose not to conduct criminal background checks from liability.The combination of the exposure to liability for not properly following the dictates of this new law and the protection from liability from claims that arise from a resident having a criminal history have caused some attorneys and boards to consider foregoing criminal background checks, except for sex offender registries, as part of the application process.
What steps must boards take to comply with Fair Chance for Housing Act requirements?
The Fair Chance for Housing Act has created complexities, requiring a delicate balance between compliance with legal obligations and the need to ensure safe, stable residences.At its core, the law redefines the roles and responsibilities of condo/co-op boards during the application process. The first change is to implement a two-step process for reviewing applications. Boards will receive all the information about an applicant as in the past, except for any information about an applicant’s criminal history. Questions about the applicant’s criminal history have been removed from the application form.
Boards may continue to ask for additional information about the applicant’s finances if the initial submission is not complete. If an interview is part of the application process, that interview should proceed as in the past. If after all is completed and the applicant is acceptable, a conditional acceptance is issued. As described above, this leads to a notice to the applicant that a criminal background check will be performed.
Boards must establish clear procedures to enforce fair and consistent treatment of all applicants. Consider implementing new solutions to streamline the collection of permissible background information. This may include consulting the building attorney or management company to amend existing application forms and required documents.