Understanding Tenant Screening Laws in New York

Understanding New York tenant screening laws is important for landlords and prospective tenants to ensure a fair and compliant rental process. These laws outline what landlords can and cannot do when evaluating prospective tenants, covering everything from the rental application process to background checks and tenant rights.

Tenant screening laws in New York go beyond standard checks like credit and criminal history, imposing specific guidelines that landlords must follow to prevent discrimination and maintain transparency. By learning these regulations, landlords can protect themselves from legal risks, while prospective tenants can ensure they receive fair treatment.

This article provides a comprehensive overview of tenant screening laws in New York, including rental application requirements, tenant rights, and specific rules for conducting background checks and handling criminal history.

Let’s explore the key aspects of these regulations to help you navigate the complexities of the New York rental market as a landlord or a prospective tenant.

Overview of New York tenant screening laws

New York law provides specific protections for the tenant screening process. Using a tenant screening service can help landlords adhere to these regulations.

Here are the key rules and rights every landlord and applicant should know.

Application forms and fees

In New York, landlords can charge an application fee up to the actual cost of the background screening report and credit checks or $20 — whichever is less. This regulation prevents unreasonably high application fees and ensures that they accurately reflect the actual screening costs incurred by the landlord.

Also, landlords must provide applicants with an itemized receipt detailing the background check costs and credit report if the fee exceeds $20. This ensures that applicants only pay for the expenses associated with their screening and that landlords are not profiting from the application process.

Landlords are also prohibited from charging additional fees related to the application process, such as administrative or processing fees, which could otherwise inflate the applicant's cost beyond the legal limit. This protects tenants from being overcharged and ensures that the application process remains fair and accessible to all prospective tenants.

Source of income protections

New York law strictly prohibits landlords from rejecting prospective tenants based on their source of income, including income from government assistance, disability benefits, unemployment insurance, child support, or any other lawful sources. These protections are particularly stringent in New York City.

Landlords must evaluate income based on its stability and sufficiency, not its source. For example, income from a Section 8 voucher must be treated like income from employment. Refusing to rent to someone because a subsidy pays their rent or imposing additional requirements on such applicants is illegal and can lead to severe penalties.

Rent control and stabilization

Rent control and rent stabilization laws in New York both affect tenant screening. These laws limit landlords' ability to increase rent, and they affect the criteria for tenant selection, particularly in rent-controlled or rent-stabilized units.

For example, in New York City, rent-stabilized apartments are subject to the Rent Guidelines Board (RGB), which sets the maximum allowable rent increases annually.

In 2023, the RGB approved rent increases of 3% for one-year leases and 5% for two-year leases on rent-stabilized apartments. This means landlords cannot increase the rent beyond these percentages, even when screening new tenants, which directly affects landlords' tpotential rental income decisions.

Also, landlords must assess whether a prospective tenant's income can cover the rent under these regulated increases when considering income during tenant screening. Since rent-stabilized units are typically more affordable, the income thresholds required for tenants may be lower than those for market-rate apartments.

Source: New York City Rent Guidelines Board.

However, landlords must ensure they do not unfairly discriminate based on income sources, such as government assistance or other lawful sources, in compliance with New York's source of income protections. This ensures that the screening process remains equitable and compliant with rent stabilization and anti-discrimination laws.

Right to lease renewal

Tenants in New York City rent-stabilized units have the right to renew their lease, which limits a landlord's ability to arbitrarily reject a renewal.

For instance, if a tenant has fulfilled their obligations under the current lease, the landlord must offer a renewal under the same terms, including rent limits set by the RGB.

Protection against unreasonable rent increases

New York City's many rent control and stabilization laws prevent landlords from implementing substantial rent hikes. For example, if a tenant lives in a building constructed before 1974 with six or more units, the apartment is likely rent-stabilized, and the rent can only be increased according to the RGB's guidelines.

Source: New York City Rent Guidelines Board.

Landlords must be mindful of these regulations when screening tenants to avoid potential violations, such as improperly rejecting applicants based on their protected status or attempting to bypass rent stabilization laws by screening for tenants willing to pay above the regulated rent limits.

This ensures rental property managers comply with city and state laws while fostering a fair rental process.

Adverse action procedures and notices

When a landlord decides not to rent to an applicant based on information obtained during the tenant screening, they must follow specific adverse action procedures as required by New York law and the federal law, the Fair Credit Reporting Act (FCRA).

When to take adverse action

Adverse action refers to any decision that negatively affects an applicant, such as denial of a rental application or offering less favorable terms based on the results of a background check or credit report.

Providing notice to applicants

Landlords must issue an adverse action notice if the decision is influenced by information from a consumer report. This notice must include the following:

• The specific reasons for the denial or adverse action.
• Contact details of the consumer reporting agency that provided the report.
• A statement that the agency did not make the decision and cannot provide reasons for the action.
• Notice that thee applicant can obtain a free copy of the agency's report and dispute any inaccuracies.

Compliance and transparency

Handling adverse action notices appropriately maintains transparency and compliance with legal obligations.

By issuing a clear and detailed adverse action notice, landlords ensure that applicants know their rights and can take appropriate steps if they believe the information used to make the decision is incorrect.

Privacy and consent in tenant screening

Protecting applicant privacy and securing consent are important responsibilities for landlords conducting tenant screenings.

Whether the screening involves a credit check, a criminal record, a background check, or any other type of consumer report, landlords must adhere to strict legal requirements to ensure the process is fair and transparent.

Obtaining written consent

Under the FCRA, landlords must obtain explicit written consent from applicants before accessing consumer reports, including credit histories and criminal background checks. This legal requirement ensures that applicants are fully informed about how their personal information will be used during the tenant screening.

The written consent form must specify the types of consumer reports that will be accessed. For instance, landlords should outline whether they will review credit histories, rental histories, criminal background checks, or other pertinent information.

It’s important that the consent form is easy to understand and includes the name of the screening service provider and a detailed description of the data being reviewed.

In addition, the consent form should inform applicants of their rights under the FCRA.

Securing personal information

In addition to obtaining consent, landlords are responsible for safeguarding any personal information collected during the screening process. This includes sensitive social security numbers, financial information, and background check results.

All collected data must be stored securely to prevent unauthorized use or data breaches, and access must be limited to authorized personnel only.

Applicability across all background checks

These privacy and consent requirements apply universally across all types of background checks.

By consolidating these legal obligations into one comprehensive section, landlords and property managers can understand their responsibilities, ensure compliance with legal standards, and build trust with potential tenants and property managers through transparent and secure practices.

Criminal background checks and the Fair Chance for Housing Act

Passed on December 20, 2023, New York City's Fair Chance for Housing Act is important for landlords' handling of criminal background checks during tenant screening.

Under this law, landlords are prohibited from inquiring about an applicant’s criminal history until a conditional housing offer has been made. This ensures that applicants are not prematurely disqualified based on their past criminal convictions or records.

Source: Fair Chance for Housing.

Once a conditional offer is made, landlords must conduct an individualized assessment of the criminal record, considering factors such as the nature and severity of the offense, the time that has elapsed since the conviction, and any evidence of rehabilitation.

By adhering to these guidelines, landlords can navigate the complexities of New York tenant screening laws while upholding legal and ethical standards.

Eviction history

When screening tenants, a landlord may consider eviction history. However, New York law encourages a careful and contextual review of public records rather than automatically disqualifying an applicant based solely on past evictions.

For instance, landlords should evaluate the circumstances surrounding the eviction. Was it due to a non-payment issue that has since been resolved? Has the tenant demonstrated consistent and timely rent payments in subsequent rentals? These factors provide a more complete picture of the applicant's current reliability as a tenant.

Since the onset of the COVID-19 pandemic, eviction rates in New York have significantly decreased due to various moratoria and tenant protections. As a result, the context of evictions during this period is particularly important. Many tenants faced eviction due to temporary financial hardships related to the pandemic, and this context deserves consideration when evaluating an applicant's eviction history.

Source: Columbia Journalism School.

Additionally, New York law protects tenants from being unfairly judged based on sealed eviction records, which cannot be used against tenants during the screening process.

Landlords should also be aware of legislative changes, such as the Housing Stability and Tenant Protection Act of 2019, which limits the amount landlords can charge for late fees, and mandates a five-day grace period for rent payments before initiating eviction proceedings. This law reflects a broader effort to protect tenants from unfair eviction practices and ensures that past evictions do not unduly harm tenants' ability to secure housing.

By approaching eviction history with a nuanced and informed perspective, landlords can make fairer decisions that comply with New York's legal standards and contribute to a more equitable rental market.

Non-discrimination in tenant screening

New York and federal laws provide robust protections against discrimination in tenant screening, ensuring that all applicants are treated fairly and equitably.

Federal Fair Housing Act protections

Under federal law, specifically the Fair Housing Act, landlords are strictly prohibited from discriminating against tenants based on race, color, religion, national origin, sex, disability, and familial status.

Expanded protections under New York law

New York law expands these protections to include additional categories such as the following:

• Sexual orientation
• Gender identity
• Marital status
• Military status
• Source of income

Consistently apply screening criteria

To comply with these non-discrimination laws, landlords must apply screening criteria consistently across all applications, ensuring fairness in every decision.

Avoidance of invasive questions

Landlords should avoid direct or indirect questions that could reveal a person’s protected class, focusing instead on objective criteria like creditworthiness or rental history.

Transparency in screening criteria

Landlords and property managers must be transparent about their screening criteria and clearly communicate them to all applicants. Providing this information upfront helps prevent misunderstandings and ensures all applicants know what is expected.

Disclosure of screening criteria

Landlords are encouraged to disclose their screening criteria upfront and in writing. This includes any requirements or benchmarks applicants must meet, such as credit scores, income ratios, or rental history standards. Transparent disclosure helps prevent discrimination and misunderstandings.

Penalties for non-compliance

Landlords who fail to comply with these screening regulations may face fines and legal consequences. Adhering to these rules protects landlords legally and ensures a fair and equitable housing process for all applicants.

How Azibo can help with tenant screening in New York

Navigating the complexities of tenant screening laws in New York is important for landlords to ensure compliance and avoid potential legal pitfalls.

Azibo offers a comprehensive platform to simplify tenant screening. This makes it easier for landlords to adhere to New York's specific regulations while ensuring a fair and transparent process for all applicants.

Azibo's tenant screening features:

• Comprehensive background checks: Azibo provides in-depth background checks, including credit reports, criminal records, and eviction histories. These checks are critical for identifying potential risks, making informed decisions, and complying with New York tenant screening laws.
• Automated adverse action notices: Should a landlord decide not to rent to an applicant based on the screening process results, Azibo offers automated tools for generating adverse action notices. This feature helps landlords comply with the FCRA by properly informing applicants of adverse decisions.
• Customizable screening criteria: Azibo allows landlords to customize their screening criteria based on specific needs and property requirements. This flexibility ensures that landlords can apply consistent and non-discriminatory standards across all applicants, in alignment with New York’s tenant screening laws.
• Secure document management: Azibo’s platform provides secure storage and management of all tenant-related documents, including rental applications and signed consent forms. This ensures that landlords can easily access necessary documentation while complying with privacy laws and data protection regulations.

By using Azibo's tenant screening services, landlords in New York can streamline their screening processes, comply with state and federal laws, and foster positive landlord-tenant relationships.

Sign up for Azibo today!

Next steps after an application is approved

The typical next steps in the rental process after approving an application include the following:

• Security deposit: Landlords usually require a security deposit equivalent to one month's rent. The landlord holds this upfront cost as protection against potential damages or unpaid rent.
• First month's rent: Tenants often need to pay the first month's rent when they sign the lease agreement.
• Signing the lease agreement: The rental agreement outlines the landlord's and tenant's rights and responsibilities. It should include details such as the duration of the lease, the monthly rent amount, and conditions for renewal or termination.

Tenant rights and protections in New York

Tenants in New York enjoy a broad range of rights and protections that ensure fair treatment and safe living conditions. The state’s laws are designed to prevent discrimination, uphold tenants' rights to habitable housing, and provide clear guidelines for rent stabilization and lease agreements.

These protections empower tenants to live without fear of unjust treatment and give them recourse if their rights are violated.

Right to safe and habitable housing

Landlords are legally required to maintain rental properties in a condition that meets health and safety standards. This includes ensuring that all essential utilities, such as heating, plumbing, and electricity, are functioning properly, and addressing pest control issues.

If a landlord fails to uphold these standards, tenants have several recourse options. They can file a complaint with local housing authorities, withhold rent until repairs are made, or even make necessary repairs and deduct the cost from their rent.

The New York State Attorney General’s office also provides guidelines on how tenants can pursue legal action if their housing conditions remain inadequate.

Rent stabilization and lease protections

In New York, particularly New York City, tenants living in rent-stabilized apartments are protected from unreasonable rent increases and have the right to lease renewals, as detailed above.

These laws also limit the reasons a landlord can evict a tenant, adding an extra layer of protection for long-term renters. Tenants in rent-stabilized apartments should know their rights regarding lease renewals, allowable rent increases, and the process for contesting illegal rent hikes or evictions.

Right to information and transparency

Landlords must provide tenants with clear and comprehensive information about their rights, including the procedures for filing complaints if those rights are violated. This includes disclosures about rent stabilization status and any screening criteria used during tenant selection.

Tenants also have the right to request and receive a written copy of their lease, which should clearly outline the terms of their tenancy, rent amount, and any other conditions.

Furthermore, tenants have the right to receive notice of any changes to their lease terms, including rent increases, well before the effective date, giving them time to consider their options or seek legal advice.

These protections ensure that tenants in New York can live in secure, fair, and well-maintained housing. Tenants should know these rights and use available resources if they believe their rights have been violated.

For more detailed information and assistance, consult resources like New York City's Fair Housing page and the New York Attorney General’s Tenant’s Rights Guide.

Structuring a legally compliant tenant screening process in New York

Managing rental properties in New York presents unique challenges, particularly tenant screening. The legal landscape is complex, requiring landlords to carefully navigate state and federal regulations.

Adherence to these regulations and local laws is necessary for legal compliance and vital for establishing a tenant screening process that is fair, effective, and transparent.

By building a solid legal foundation and adhering to best practices, landlords can develop a tenant screening process that minimizes risk, avoids discrimination, and fosters a positive landlord-tenant relationship.

Implementing best practices to comply with tenant screening laws in New York

With the legal framework established, landlords can implement a few best practices to ensure their tenant screening process is not only compliant but also fair:

Standardizing application forms

Consistency is key to fairness. Landlords should develop standardized application forms that gather all necessary information without overstepping legal boundaries.

This includes collecting information about employment, income, rental property history, and references while avoiding questions that could lead to discrimination based on protected characteristics.

Applying uniform screening criteria

Landlords should evaluate all applicants using the same criteria to ensure fairness and avoid discrimination claims — this means applying the criteria consistently when assessing credit scores, income levels, or rental history.

Clear communication

Transparency is vital in the New York tenant screening process. Landlords should communicate with applicants about the screening process, including any fees, the criteria used, and the applicant’s rights under the law.

Providing applicants with this information upfront helps to build trust and reduces the likelihood of misunderstandings or disputes later on.

Maintaining proper documentation

Landlords should maintain detailed records of all communications, screening results, and decisions. This documentation can serve as evidence of compliance in the case of a legal challenge.

Reviewing and updating these records and the screening process regularly ensures that practices comply with current laws and regulations.

Ongoing compliance and education

Given the complexity and frequent changes in New York’s tenant screening laws, landlords need to stay informed about any updates or new regulations.

Engaging in ongoing education, such as attending legal seminars or consulting with legal professionals, will help landlords manage their rental properties legally.

Staying current with legal requirements protects landlords from potential legal issues and fosters a fair and equitable rental market.

Building successful landlord-tenant relationships

By following legal guidelines and implementing these best practices, landlords can protect themselves from legal risks while fostering trust and respect with their tenants.

A transparent, fair, and legally compliant New York tenant screening process lays the groundwork for positive landlord-tenant relationships.

When tenants feel that they have been treated fairly and their rights are respected, they are more likely to stay on the property and maintain it. This contributes to tenant satisfaction and the retention of quality tenants, and it helps create a stable and successful rental property environment for both landlords and tenants.

Structuring a legally compliant tenant screening process in New York goes beyond avoiding legal pitfalls — it’s about creating a foundation for long-term success in the rental business.

Key considerations for New York tenant screening

Landlords and tenants should know New York tenant screening laws to ensure a fair and transparent rental experience.

Landlords should implement a consistent, objective, and legally compliant approach to evaluating prospective tenants. They should focus on verifying reliability and the ability to pay rent on time, ensuring tenants have a stable financial history.

A reliable tenant screening platform, like Azibo, can help landlords conduct necessary criminal background checks and other assessments while adhering to state regulations.

Adhering to New York tenant screening laws helps landlords stay compliant, and it promotes strong, stable, mutually beneficial relationships between landlords and tenants. Both parties can achieve better outcomes and foster a positive rental environment by staying informed and adhering to these regulations.

Tenant screening laws in New York FAQs

Can a landlord conduct credit checks under tenant screening laws in New York?

Yes, landlords in New York can conduct credit checks on potential tenants under New York tenant screening laws, provided they have the prospective tenant's consent.

What are the red flags when screening a tenant under tenant screening laws in New York?

Tenant screening laws in New York outline red flags, including poor credit history, previous evictions, inconsistent employment history, criminal history records, negative references from previous employers or past landlords, and providing false information on an application.

A tenant screening service is important for conducting thorough background checks to identify red flags. This helps ensure tenants are reliable, financially stable, and able to pay rent on time.

What is the new rent law in New York regarding rent stabilization and tenant screening laws in New York?

New York's new rent law, signed by Governor Kathy Hochul in December 2023, boosts protections for tenants in rent-stabilized apartments under New York tenant screening laws. It aims to prevent unfair rent hikes and apartment deregulation.

Under New York tenant screening laws, landlords need the approval of the Homes and Community Renewal (HCR) to deregulate an apartment. They also face fines for failing to register apartments. The law also clarifies how rents in residential buildings should be calculated after changes and gives HCR more authority to enforce these rules.