As of January 1, 2025, New York’s Fair Chance for Housing Act (FCHA) is in effect, significantly limiting how criminal history can be considered when selling or renting housing. Sellers, brokers, development boards, and their representatives need to be aware of the following implications.
What Does the Law Do?
The FCHA prohibits discrimination based on an applicant’s criminal record when selling or renting a home. Sellers and landlords cannot reject an applicant or offer them different terms due to their past convictions—unless the record falls under the law’s strict “reviewable criminal history” guidelines.
What Criminal Records Can Be Considered?
Housing providers can only consider the following:
- Convictions on a sex offender registry regardless of when they occurred.
- Felony convictions from the past five years from the date of release from prison, or from the date of sentencing if no prison sentence was imposed.
- Misdemeanor convictions from the past three years from the date of release from prison, or from date of sentencing if no prison sentence was imposed.
However, sellers cannot consider:
- Arrests that did not lead to a conviction.
- Cases dismissed or resolved in favor of the defendant.
- Certain out-of-state convictions that conflict with New York law.
Background Checks: Strict Rules Apply
A background check cannot be conducted until after a conditional offer is made. A seller may not even make statements or questions relating to a purchaser’s potential criminal history until after a contract or conditional offer is signed. If the seller wishes to review an applicant’s criminal history after a conditional offer is made, they must:
- Provide written notice to the applicant about their rights.
- Promise in writing that the offer will not be revoked unless the criminal record falls within the FCHA’s “reviewable” category. If a decision is made against the applicant due to their criminal record, the seller must:
1. Conduct an individualized assessment of the applicant’s situation.
2. Provide a written explanation detailing how the criminal record directly impacts a legitimate business interest in the sale.
3. Give the applicant five business days to correct errors or provide additional information that would strengthen their application.
What Sort of Convictions May Housing Providers Rely on When Denying an Application for Housing?
If a seller wishes to deny an application based on the applicant’s reviewable history, they must identify an objective, specific, and non-discriminatory business interest, and explain the connection between the applicant’s reviewable criminal history and the stated business interest. The existence of a conviction alone never creates that link. Seller preferences or the preferences of existing tenants are also not permissible bases for a legitimate business interest. If the provider fails to provide relevant and credible evidence that directly relates to its proffered business interest, that interest will be considered speculative, and therefore not legitimate, and cannot be relied on to deny housing to an applicant.
What If You Violate the Law?
Failure to follow the FCHA’s process could lead to discrimination claims and legal liability. Even if a third-party background check provider is used, the seller is responsible for ensuring compliance. Applicants may file a complaint with the NYC Commission on Human Rights within one year of their application being denied. Violations may incur civil penalties of up to $125,000 per violation, or double for willful, wanton, or malicious violations. The Commission may also impose training and compliance programs on managers and employees.
Are There Any Exceptions?
Yes. The law does not apply if you are selling or renting part of your personal residence. Additionally, background checks are allowed when federal, state, or local laws require them, though sellers must still follow the FCHA’s notice and review procedures.
Can Sellers Deny an Application for Reasons Unrelated to Criminal History?
Yes, sellers and boards may still deny a housing application for reasons not related to criminal history without engaging in the Fair Chance Housing process. Thus, for example, an application may be denied for failure to meet standard contract conditions, such as mortgage contingencies and credit requirements, without requiring a review and correction process. Additionally, sellers may consider the violent history of an applicant or resident if such acts would adversely affect the health, safety, or welfare of other residents.
Bottom Line
If you are selling an apartment, you must follow strict procedures before considering an applicant’s criminal history. Sellers and their legal representatives should ensure full compliance with the FCHA to avoid potential legal consequences.