Angela M. Sekerka

Beginning on January 1, 2025, amendments to the New York City Human Rights Law (HRL) will go into effect, making it unlawful for all New York City housing owners, lessors, managing agents, and others who have the right to sell, rent, or lease housing accommodations to:

• Refuse to rent, lease, approve the sale, rental, or lease or otherwise deny or withhold a housing accommodation from an individual.
   
• Provide different terms, conditions, or privileges of the sale, rental, or lease of a housing accommodation or an interest therein or in the furnishing of facilities or services in connection therewith.
   
• Represent to any individual that any housing accommodation or interest therein is not available for inspection, sale, rental, or lease. 
   
• Declare, print, or circulate or cause to be declared, printed, or circulated any statement, advertisement, or publication, or use any form of application for the purchase, rental, or lease of a housing accommodation which expresses, either directly or indirectly, any limitation, specification, or discrimination in housing…based upon an individual’s criminal history, other than an individual’s “reviewable criminal history” obtained and considered in conformity with the HRL. The amendments to the HRL are also known as the Fair Chance for Housing Act (FCHA) or Local Law Number 24.

Prior to this HRL amendment, the protected classes for New York City residents included disability, age, citizenship status, color, creed, familial status, gender, lawful occupation, lawful source of income, marital status, national origin, partnership status, race, religion, sexual orientation, and status as a veteran or victim of domestic violence. NYC Admin. Code §8-107(5).  For years, the New York City Department of Housing Preservation and Development (HPD) and other local, city, and state agencies have argued for the inclusion of criminal background status in the HRL’s protections, taking the position that blanket denials of applicants based on their criminal histories has a disparate impact on people of color. The NYC Commission on Human Rights, as of July 29, 2021, amended Local Law 4 to include employment discrimination based on criminal history, so the implementation of a similar ban on housing discrimination based on criminal history is in line with that prerogative. 

Of particular significance to housing providers will be the clarification of what is considered “reviewable criminal history.” According to the FCHA, “reviewable criminal history” includes only criminal histories involving (1) registered sex offenses (with no temporal lookback restrictions); (2) convictions or pending arrests for misdemeanors where less than three (3) years have elapsed since the date of release from incarceration, or the date of sentencing if no incarceration occurred; or (3) convictions or pending arrests for felonies where less than five (5) years have passed from the date of release from incarceration, or the date of sentencing if no incarceration occurred.

Expressly excluded from “reviewable criminal history” are the following: (1) convictions that have been sealed, expunged, pardoned, relieved, nullified, or vacated; (2) convictions in jurisdictions outside of New York for health, reproductive, or gender-affirming care or cannabis possession, which would not be a conviction had they occurred within the State; (3) convictions resolved in favor of the accused that were terminated or sealed; (4) pending cases adjourned in contemplation of dismissal; and (5) crimes disposed of in outside jurisdictions that are comparable to the crimes excluded in New York.

It is also significant that the FCHA’s definition of “unlawful discriminatory practices” includes failing to strictly conform to HRL requirements when conducting a criminal background check. These requirements specify when a criminal background check may be run, the type of criminal history that may be considered, and whether and how a covered housing provider might take adverse action against a prospective resident based on the screening results. The HRL-mandated background check process:

• First, applicants must be given advance notice of intent to run a criminal background check and be provided with a copy of a document referenced in the HRL as the “Fair Chance Notice,” pursuant to NYC Admin. Code §8-107(o)(4)(c). 
   
• Next, criminal background checks may be conducted, but only after an applicant is otherwise approved for the housing accommodation sought and has been provided with a purchase, rental, or lease agreement committing the same to them. The rationale for this provision is to ensure that the criminal background check is the sole reason for the applicant’s rejection. 
   
• If the background check reveals a “reviewable criminal history,” the housing provider may only revoke the tendered lease or purchase commitment after engaging in the “Fair Chance Housing Process,” which requires providing applicants with all information received in connection with the criminal background check, regardless of whether such information was relied upon or considered.
   
• Thereafter, the housing provider must give the applicant no less than five (5) business days to submit information identifying errors in the criminal history returned and provide supplemental or mitigating information supporting the application. NYC Admin. Code §8-107(o)(5)(a)(i-iii).  
   
• If no such information is received after five (5) business days, or upon receiving such information, a housing provider is then required to conduct an individualized assessment of the reviewable criminal history, along with any supplemental information provided.  
   
• If the provider takes an adverse action after this individualized assessment, it must notify the applicant in writing, demonstrating in detail how the reviewable criminal history is relevant to a legitimate business interest and how the information submitted supporting the application was considered. The notification must also include copies of any documentation reviewed or relied upon in the individualized assessment. NYC Admin. Code §8-107(o)(6).

The practical implications of the FCHA are that beginning in 2025, housing providers may be found liable for discrimination for improperly rejecting applicants based on their criminal histories, as well as for failing to follow the proper procedures when considering such applications.

Even more significant, in an era when many housing providers utilize third-party contractors to conduct applicant background screening, the FCHA holds that covered housing providers are liable for violations committed by third-party screening companies conducting criminal background checks on their behalf. If a housing provider receives information from a screening company that includes anything other than “reviewable criminal history,” it will be presumed the provider relied on such information. This presumption may only be rebutted by showing that the “Fair Chance Housing Process” was strictly followed and that the housing provider did not rely on the wrongly received information to revoke the lease offer. NYC Admin. Code §8-107(5)(o)(7).

NYC Housing providers are advised to carefully consider the costs associated with revoking lease offers based on criminal background checks considering the FCHA. Many such rejections may result in civil proceedings or administrative investigations. Further, housing providers must realize that even when respondents successfully defend against such administrative complaints before the New York City Commission on Human Rights, they are without recourse to recoup legal fees and expenses under the HRL. Compensatory and punitive damages, as well as injunctive relief, may also be awarded. Adverse findings by the New York City Commission on Human Rights (the Commission) would likely also serve as a magnet for fair housing tester agencies and plaintiffs’ attorneys to establish a “pattern or practice” of discrimination under the HRL for which they have the right to recover attorney’s fees. Indeed, we predict that the implementation of the FCHA will be followed by a flurry of activity by fair housing testing organizations, for which housing providers must be prepared.

Housing providers should expect to be the subject of administrative complaints filed with the Commission and civil actions alleging failure to abide by these rigid requirements, whether or not an applicant was denied the housing in question. We advise all housing providers to ensure that their employees are promptly and thoroughly trained on the FCHA and its requirements and take other proactive measures, such as creating policies and procedures for assessing applicants’ criminal backgrounds. We further recommend that housing providers who utilize third-party screening agencies take reasonable steps to ensure that the screening companies conduct their background checks in conformance with the FCHA. While specific enforcement by the Commission of the FCHA in 2025 is unknown, NYC housing providers need to be prepared.