The Fair Chance for Housing Act: What NYC Landlords Need to Know for 2025 🏠📜

Written by R&E's Cori A. Rosen.

With the start of the New Year comes the implementation of the Fair Chance for Housing Act, a transformative addition to the New York City Human Rights Law. Effective January 1, 2025, this law imposes significant restrictions on when and how landlords, property managers, and other housing decision-makers—called “Covered Entities”—can consider an applicant’s criminal history during the rental, lease, or sale process.

Failure to comply with the law could lead to discrimination lawsuits, civil penalties, and even mandatory corrective actions. Here’s everything you need to know about this sweeping legislation, its requirements, and how you can protect your business.

🚨 Key Requirements of the Fair Chance for Housing Act

Beginning January 1, 2025, conducting criminal background checks without strict compliance will be deemed an unlawful discriminatory practice. To comply, Covered Entities must adhere to the following rules:

🔍 When Can Criminal Background Checks Be Run?

Under the law, a criminal background check can only be conducted after an applicant:

1. Has been otherwise approved for housing and already received a signed lease, rental, or purchase agreement.
2. Is provided with advance notice and disclosures about the background check, including the Fair Chance Notice, a document (to be published by the NYC Commission on Human Rights) outlining the applicant’s rights and the restrictions on criminal history use.

🗂️ What Criminal History Can Be Considered?

The law limits reviewable criminal history to specific types of offenses within certain time frames:

• Felony convictions or releases from incarceration within the last 5 years.
• Misdemeanor convictions within the last 3 years.
• Convictions requiring registration as a sex offender in New York or comparable jurisdictions.

Certain types of criminal history are explicitly excluded from consideration, including:

• Juvenile delinquent or youthful offender adjudications.
• Sealed or pardoned convictions, or pending arrests that did not result in a conviction.
• Convictions for crimes in other jurisdictions that would not be prosecuted under New York law.

📃 Decision-Making Requirements

If criminal history falls within the “Reviewable Criminal History” category, landlords must:

1. Allow applicants to provide mitigating information, such as evidence of rehabilitation, explanations for the offense, or current character references.
2. Provide a written explanation if the lease, sale, or agreement is revoked, outlining how the Reviewable Criminal History and mitigating information were factored into the decision.

⚠️ Why This Matters for Landlords and Property Managers

The law introduces a range of potential risks for housing providers, both procedural and financial.

💼 Liability Risks

Covered Entities can face penalties for:

• Failing to follow the required process, even if the application is ultimately approved.
• Accepting information from third-party screening companies that includes non-reviewable criminal history. Landlords are presumed to have relied on this information unless they take reasonable steps to prevent its use.

🤯 Costly Litigation and Damages

Rejected applicants will often assume their criminal history was the sole reason for denial, leading to civil complaints. Defending against these claims is a costly process, and landlords cannot recover their legal fees—even if they successfully rebut the claim.

Penalties for violations can include:

• Compensatory and punitive damages.
• Civil penalties and mandatory remedies, such as:
  • Updating policies and procedures.
  • Reserving units for affected applicants.
  • Requiring staff training and regular compliance reporting.

🔓 A Floodgate for Lawsuits

Adverse discrimination findings—or even a published settlement—can expose landlords to opportunistic lawsuits from advocacy groups and testing agencies. Successful complainants under New York City’s Human Rights Law are entitled to recover their legal fees, increasing the financial stakes for Covered Entities.

✅ How Landlords Can Stay Compliant

The best way to avoid these risks is to be proactive. Here are steps every landlord and property manager should take:

🧠 1. Educate and Train Your Team

Make sure all employees involved in tenant screening understand the Fair Chance for Housing Act. Training should include:

• When and how criminal background checks may be conducted.
• How to properly review criminal history and consider mitigating information.
• Procedures for issuing written explanations of denials.

📝 2. Create Policies and Procedures

Develop written policies to ensure compliance, including:

• Delaying background checks until after housing approval.
• Providing required disclosures and using the Fair Chance Notice.
• Properly documenting decision-making and maintaining records.

🛠️ 3. Vet Third-Party Screening Companies

Screening companies must follow the law’s requirements. Take steps to confirm they:

• Exclude non-reviewable criminal history from reports.
• Provide results in compliance with NYC Human Rights Law.

⚖️ 4. Consult Legal Experts

Seek legal counsel to review your current processes and recommend adjustments. Being proactive can help avoid costly litigation and penalties.

💡 Final Thoughts

The Fair Chance for Housing Act is a landmark law that prioritizes fairness and transparency in NYC’s housing market. However, it also places significant burdens on landlords, property managers, and screening companies.

To navigate these changes effectively:

• Train your staff and implement compliant policies.
• Work closely with legal and screening experts to ensure adherence to the law.
• Take proactive steps to prevent costly litigation and penalties.

For expert guidance and customized compliance solutions, contact Rosenberg & Estis today. We’ll help you stay ahead of the curve while protecting your business in NYC’s evolving regulatory landscape.

📞 Call us now to ensure your operations are ready for 2025!

Founded in 1975, Rosenberg & Estis, P.C. is widely recognized as one of New York City’s pre-eminent real estate law firms. R&E provides full-service representation and advice in every aspect of real estate, from performing due diligence and evaluating financing, to handling joint ventures, acquisitions and leasing, construction and design team agreements, property tax exemptions and abatements, land use and zoning matters, Real Property Income & Expense (RPIE) filings, real estate tax certiorari, co-op and condo offering plan filings and board representation, distressed situations workouts, foreclosures and bankruptcies, trust and estate planning, as well as the litigations and negotiations which sometimes ensue when deal-making. R&E’s wealth of experience in New York real estate makes it the ideal thought partner for owners, developers, not-for-profit corporations, educational institutions, sponsors, equity investors and lenders in both real estate transactions and in all court venues.