As of January 1, 2025, the New York City Fair Chance in Housing Act makes it illegal for most NYC housing providers (including Co-ops and Condominiums) to discriminate against buyers and renters because of arrest records, convictions, or other criminal history.

This amendment to the New York Human Rights Law limits what types of records housing providers can consider (permitting a review of only limited types of convictions); as well as when such review can take place during the review process.

The Law does NOT require covered housing providers to run criminal background checks, but does require covered housing providers to take several steps if they choose to use a criminal background check as part of the approval process.

Covered Housing Providers:

• Most housing in New York City is covered by the law except for the following:
  A housing accommodation for not more than two families living independently of each other, if the owner or members of the owner's family reside in one of such housing accommodations.
• A room or rooms in a housing accommodation if such rental is by the occupant of the housing accommodation or by the owner of the housing accommodation and the owner or members of the owner's family reside in such housing accommodation.
• State or federally funded housing providers, including public housing authorities, that are required or authorized to take specific actions related to criminal history can take such specific actions without violating the NYC Fair Chance Housing Law.  However, these types of providers must comply with all other parts and required processes of the Fair Chance Housing Law.

Timing of Criminal Review:

Covered housing providers that choose to use criminal background checks can only do so AFTER reviewing a buyer’s or renter’s eligibility and making a conditional offer of approval.  In essence, the applicant’s criminal history cannot be considered prior to first determining eligibility.

Scope of Criminal Review:

Covered housing providers can only review the following limited convictions as part of a criminal background check:

• Convictions that require registration on a sex offense registry at the time of the background check, regardless of when such offense took place.
• Felony convictions where the actual release date or sentencing date (if the sentence does not include jail or prison time) was within the last 5 years; and

• Misdemeanor convictions where the actual release date or sentencing date (if the sentence does not include jail or prison time) was within the last 3 years.

  The 3- and 5-year time periods are measured from the release or sentencing date (if the sentence does not include jail or prison time), regardless of probation or parole status.

  A covered housing provider can NEVER consider the following:
   

• Convictions that were sealed, expunged, are under an executive pardon or certificate of relief from disabilities, or legally nullified or vacated.
• Convictions for violations, which are non-criminal offenses such as disorderly conduct.
• Convictions under federal law or another state’s law for conduct related to reproductive or gender affirming care that is lawful in New York State.
• Convictions under federal law or another state’s law for cannabis possession that does not constitute a felony in New York State.
• Adjournments in Contemplation of Dismissal (ACDs).
• Adjudications as a youthful offender or for juvenile delinquency.
• Terminations in favor of an individual, including, but not limited to, acquittals, reversals upon appeal, and exonerations.
• Dispositions of criminal matters under federal law or another state’s law that are comparable to those listed here.

What is considered a Criminal Review:

• Asking a person whether they have a criminal history orally or in writing.
• Searching for criminal history information about the person in publicly available records, including:
  • Websites.
  • Consumer reporting agencies.
  • Private databases.
• Using third parties to find criminal history information about the person.

• Any other form of gathering records or information about the person’s criminal history.

  If using a third-party provider, the vendor must be instructed to limit their report to only permitted reviewable criminal history.  If a covered housing provider knowingly receives criminal history information other than permitted reviewable criminal history information, there is a rebuttable presumption that the covered housing provider relied on that information in violation of the Law.

Covered Housing Provider Exculpation from Liability: 

The Law provides that covered housing providers shall be immune from liability in any civil action resulting from an alleged act of an individual with a criminal history based on the claim that the covered housing provider should not have sold, rented, leased or otherwise granted a housing accommodation or an interest therein, to such individual or as a result of a covered housing provider’s decision not to perform a criminal background check.

If Opting for a Criminal Review:

For those covered housing providers wanting to run a criminal background check, we advise the following:

• Make a conditional offer of housing in writing.
• Wait to run a criminal background check until AFTER reviewing housing eligibility and making a conditional offer of housing.
• Give the applicant the Fair Chance Housing Notice of Rights BEFORE running the criminal background check. If the covered housing provider makes it a practice to run criminal background checks, we would advise including this notice in the application. 
• A covered housing provider that considers revoking their conditional offer after asking about or considering criminal history information must give to the buyer or renter the following:
  • A copy of all the criminal history information they have received and/or reviewed.
  • Notice that the buyer or renter has five (5) business days to:
    • Identify errors or inaccuracies in the criminal history information received or reviewed;
    • Identify any information that should not have been considered (any information outside of the lawfully reviewable convictions); and
    • Share any additional information in support of their application, including, but not limited to, personal and professional references, certificates earned, evidence of rehabilitation, classes taken, and any other contributions.

Action taken after Criminal Review:

If after conducting a criminal review, a covered housing provider decides to revoke their conditional offer, the housing provider must inform the buyer or renter in writing, showing:

• a legitimate business interest;
• how that legitimate business interest is linked to the buyer’s or renter’s reviewable conviction(s); and
• how the buyer’s or renter’s individual information and circumstances were considered in the individualized assessment.
  
  The notification must also include copies of any documentation reviewed or relied upon in the individualized assessment.

What is a Legitimate Business Interest: 

A covered housing provider’s legitimate business interest must be specific, objective and non-discriminatory. Compliance with the terms and conditions of a proprietary lease or rental agreement is a permissible legitimate business interest of a housing provider.  Purely discriminatory motives, stigma, stereotypes, or assumptions are not considered a legitimate business interest.

A covered housing provider that has a legitimate business interest must also explain the link between that interest and a buyer’s or renter’s particular reviewable conviction(s) considering the individual information and circumstances to justify a decision to revoke the conditional offer of housing.  The existence of a conviction alone never creates that link.

The general fact that an individual has a conviction is not a lawful basis for an adverse action and does not create a link between a person’s conviction and a legitimate business interest.  Covered housing provider preferences or the preferences of existing renters are also not permissible bases for a legitimate business interest.

The following are not legitimate business interests and do not establish a sufficient link to justify the decision of a covered housing provider to revoke an offer:

• “I don’t want the building to be a hot spot for law enforcement”
• “The applicant seems likely to commit another crime and I want tenant safety”
• “This is a family building”
• “We don’t want bad guys hanging around”
• “My tenants don’t want criminals”
• “My insurance rates will go up”

• “This will impact my property value”

  A legitimate business interest proffered on behalf of a covered housing provider is considered speculative if it is not based directly on relevant and credible evidence.

Revoking a Conditional Offer (for a non-Criminal Review Basis):

A covered housing provider can revoke the conditional offer after an individualized assessment if they show a material misrepresentation, material omission, or material change in qualifications for purchase or rental unrelated to criminal history and which was not known when the conditional offer of housing was made.

Can applications reference a Criminal History:

Any housing application for, or advertisement by, a covered housing provider which expresses, directly or indirectly, any limitation, specification, or discrimination in housing because of an individual’s criminal history is prohibited.  The only exception is for covered housing providers that are required or specifically authorized by law to include such language.  Where language about criminal history or criminal background checks is required or specifically authorized by law, a covered housing provider must include a citation to the law or rule in the advertisement and application.

If a covered housing provider adopts a policy not to run criminal background checks, all references to such a check should be scrubbed from all advertisements and applications.  Alternatively, if a criminal background check is still desired by a covered housing provider, we would recommend that a simple disclosure be listed in all advertisements and applications notifying applicants that all criminal background checks will be performed in accordance with the New York City Fair Chance in Housing Act.

What if the Law is violated:

The New York City Commission on Human Rights can order a respondent to cease and desist from engaging in unlawful conduct; mandate policy change; and order a respondent to pay for emotional distress damages, among other remedies.  The Commissioner may also assess civil penalties (paid to the City of New York) of up to $125,000 for violations, and up to $250,000 for violations that are the result of willful, wanton or malicious conduct, as well as require respondents to take other actions such as training for managers and employees.

If you have questions, please contact me at sms@gdblaw.com, 212-935-3131.