BARRISTER'S BRIEFING: Limited Background Checks in New York City: NYSAR Helps to Make Key Changes to Bill

With all the turmoil and negative messaging about NAR and the real estate industry in general, I’d like to take a moment to shed some positive light on how Realtor Associations help to make positive change. So, this week I’m going to quickly look at how NYSAR helped to craft a new bill in New York City that impacts landlords and tenants.

On Dec. 20, 2023, the New York City Council passed a piece of legislation that addressed a landlord’s ability to use a prospective tenant’s criminal history to reject an applicant. In its draft form, NYSAR expressed concerns over the language and its impact. Because of NYSAR’s concerns with the original bill, it reached out to the members of the New York City Council Committee on Civil & Human Rights. NYSAR held dozens of individual meetings with the committee and, on Dec. 8, 2023, Melissa Gomez, a 20-year licensed broker and the 2022 Chair of NYSAR’s New York City Issues Working Group, provided testimony to the committee in support of the concerns that NYSAR and its members had about the proposed legislation. As a result of these efforts, the revisions advocated for by NYSAR were embodied in the bill, which is expected to be signed into law by New York City Mayor Eric Adams, with an effective date of Jan. 1, 2025.

The Bill

The original bill was introduced a few years ago.

The bill, known as the Fair Chance for Housing Act, was immediately considered by many to be overly broad and was even thought to potentially make residential buildings unsafe, as it initially barred landlords from conducting most criminal background checks. As a result, there was a lot of push back from landlords and other real estate professional groups.

In its original form, the bill sought to ban landlords from conducting most criminal background checks. Its intent was to combat alleged housing discrimination that advocates argued disproportionately impacted black and brown New Yorkers, and that supporters said accounted for 80% of city residents with conviction histories. Proponents of the original bill argued that housing discrimination should not be permitted to be further added to a person’s criminal sentence. They maintained that even criminals should be permitted to move on with their lives and contribute to their communities and the economy and a complete bar on banning criminal background checks should be permitted to level the playing field. Additionally, with increased access to housing, it was argued that it would reduce recidivism and make the city safer.

Opponents of the bill argued that if landlords were not permitted to conduct criminal background checks it could put the lives of tenants, who may end up living next to those charged or convicted of violent crimes, in danger. Arguably, a serial arsonist of multi-family homes could, once again, find a new target with ease. Further, it could open up the landlord to possible liability for any crimes committed by those with criminal histories because they were not permitted to perform those necessary background checks.

With the input from various organizations, including NYSAR, its members and, in particular, Gomez, the bill was revised and approved and this newly revised bill finds a fair balance for all sides. The revised bill, while limiting a landlord’s ability to reject rental applications based on past convictions, allows landlords (and brokers) to look at and consider registered sex offenses, misdemeanor convictions from the past three years and felonies from the past five years after completion of a prison sentence.

As a part of the revised bill, a landlord, owner, broker, or other appropriate entity, must first determine if a prospective tenant meets the landlord's initial tenant applicant criteria. Only after that, may the landlord now review the appropriate criminal history. If they decide to reject the prospective tenant, they must provide a written explanation as to why the rejection was due to a legitimate business interest. Prospective tenants will then have the opportunity to respond and to correct information. Of significant importance is that the bill provides clear indemnification language for property owners, managers, brokers, and agents who comply with the provisions of the bill.

This bill does not apply to one or two-family, owner-occupied housing or where federal, state or local laws, including laws protecting victims of domestic violence, sex offenses or stalking, require or permit exclusion based on criminal history.

In the end, the bill finds a balance. It prohibits housing discrimination on the basis of criminal history, with limited exceptions, but it continues to allow property owners to perform appropriate criminal background checks. This protects the landlord and the current tenants and promotes housing opportunities for individuals with criminal records who are deemed to pose no threat to others.

Conclusion

In recent months, Realtors have been painted in a bad light. They are portrayed as pariahs and swindlers of the public. The reality is that Realtors care about property rights. They care about people, buyers, sellers, landlords and tenants. They pay attention to real estate issues and speak up for communities. Realtor Associations work to advocate for balanced legislation and to find an equilibrium that benefits everyone in society. The world is better off with Realtors.