The state of New York has passed a law that would effectively ban the use of an eviction database scan when screening rental applicants. Signed into law on June 14th as part of The Housing Stability and Tenant Protection Act of 2019, Real Property Law section 227-F would penalize rental property owners who deny an applicant based on a pending or prior landlord-tenant litigation. This law, in addition to two other provisions, has been met with widespread criticism from the rental housing industry… and is one legislative trend we hope will not spread.
When it comes to dissecting this law, Real Property Law Section 227-F pretty clearly bans the use of eviction records. This section is split into two parts
- Rental property owners and managers cannot refuse to rent or offer a lease on the basis of the applicant’s prior or pending landlord-tenant action. This provision also establishes a “rebuttable presumption” that an owner is in violation of this section if they request eviction records from a tenant screening company or inspects related court records and the rental applicant is denied.
- The attorney general may bring an action or special proceeding in the supreme court if they believe they have satisfactory evidence that “any person, firm, corporation or association or agent or employee thereof” has violated the provision above. Violations could cost between $500 – $1,000 for each violation.
You can see why rental owners in New York are in an uproar. Beyond the ability to refuse candidates with an eviction record, Section 227-F essentially bars landlords and property managers from even knowing that information in fear that they’ll be fined if they deny an applicant (even if the applicant didn’t meet their rental requirements like credit or income standards).
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Alongside this new section, there are two other sections within this act that rental owners in the state of New York should be aware of:
- Real Property Law Section 238-A bars a “landlord, lessor, sublessor or grantor” from enforcing any late fee above $50 or 5% of the monthly rent (whichever is less). It also prohibits demanding any fee or payment in excess of $20 for processing a rental application. This fee must be waived unless a copy of the background report is supplied.
- The amendments to General Obligations Section 7-108 limit the amount of the security deposit to no more than one month’s rent.