As a landlord, your choice starting January 1, 2022 will be to either not use Criminal Background Checks (“CBC”s) as part of your new tenant screening, or you face a significant liability exposure if you attempt to deny applicants in compliance with the new denial protocol. This law does not apply to dwelling units offered for rent in an owner occupied premises of not more than four dwelling units. By its terms it also does not apply to someone applying for your approval as an occupant only. (This is probably a mistake – there are many drafting mistakes in the law – but until it is amended, you retain that discretion.)
Here’s what’s involved: your screening process must now be in two phases. You can apply your normal “economic” screening protocol (e.g. scoring (which does not take into consideration criminal records) income measurement, income verification, credit worthiness analysis). (I’m not aware of anyone using “references” but that is still an option). But, until you complete that you cannot perform a CBC. There are two exceptions for all landlords-you can initially inquire about whether or not the applicant is subject to a lifetime registration requirement under a state sex offender registration program, and you can initially consider conviction for production of methamphetamine on the premises of federally assisted housing. This “exception” seems useless as it would be very cumbersome for the application process to conduct two CBCs. Why? Any denial requires analysis of the facts relied upon and justification for a denial (described below). It makes no sense to have to do it twice.
Before accepting an application fee, you must disclose in writing whether your eligibility requirements include consideration of criminal history. You must also give them a written statement that they can provide evidence demonstrating inaccuracies within any criminal record search for evidence of rehabilitation or other mitigating factors, once you decide to pursue that inquiry. The State Division of Civil Rights is charged with drafting these two forms which you must use once they are available.
After completing the consideration of economic factors you do not make a rejection on that basis, and if you still want to perform a CBC, you must then make a “conditional offer”. That is an offer to rent that is contingent upon a subsequent inquiry into their “criminal record”.
If you conduct the search, at no point in time can you consider:
- arrests or charges that have not resulted in a conviction (logically that would include an Indictment);
- Expunged convictions;
- Convictions erased through executive pardon;
- Vacated and otherwise legally nullified convictions;
- Convictions being appealed;
- Juvenile adjudications of delinquency;
- Records that have been sealed.
Prior to making a “conditional offer” you may not make any oral or written inquiry regarding the criminal record – other than the two categories that fit within the exception. (Lifetime sex offender and production of Meth on federally subsidized property. It makes no sense to conduct two CBCs).
Once you make a “conditional offer”, if you obtain a search, you may only make a denial based upon consideration of a criminal record that resulted in a conviction for murder, aggravated sexual assault, kidnapping, arson, human trafficking, sexual assault, causing or permitting a child to engage in a limited sexual act or in the simulation of such an act or any crime that resulted lifetime registration in a state sex offender registry, or production of Meth on a federally subsidized property. On its face the law also allows you to deny based on consideration of an indictable offense for a crime of the 1st degree that was issued, or if the conviction resulted in a prison sentence, where the sentence concluded, within the six years immediately preceding the issuance of the “conditional offer”. It gives similar treatment to an indictable offense of the 2nd or 3rd degree that was issued, or if the conviction resulted in a prison sentence, where the sentence concluded within four years immediately preceding the issuance of the “conditional offer, as well as an indictment for an indictable offense of the fourth degree that was issued, or if the conviction resulted in a prison sentence, the sentence concluded within one year of the issuance of the “conditional offer”. However, in another section of the law it prohibits you from relying on “…charges that have not resulted in a criminal conviction…”. That would include indictments not resulting (yet) in a conviction. In my opinion you should not use indictments that have not resulted in a conviction.
After receiving information relating to a qualifying basis for denial, you are limited in withdrawing the “conditional offer” to cases where you can determine, “by a preponderance of the evidence”, that the withdrawal is “necessary to fulfill the substantial, legitimate nondiscriminatory interest”.
If you withdraw the offer you must provide the applicant with written notification that includes specific reasons for the withdrawal. You must advise them of their opportunity appeal the denial (State form to be provided) by giving you with evidence demonstrating inaccuracy, evidence of rehabilitation or other mitigating factors.
Your written justification for the denial must include an individualized assessment of the applicant’s record and must reference:
- The nature and severity of the criminal offense;
- Age of the applicant at the time of the occurrence of the criminal offense;
- The time which has elapsed since the occurrence of the criminal offense;
- Any information produced by the applicant, or produced on the applicant’s behalf in regard to the applicant’s rehabilitation and good conduct since the occurrence of the terminal offense;
- The degree to which the criminal offense, if it reoccurred, would negatively impact the safety of the housing providers’ other tenants of; and
- Whether the criminal offense occurred on or was connected to property that was rented or leased by the applicant.
If you withdraw the offer the applicant can request a copy of all information you relied on in withdrawing the “conditional offer” including the criminal records. They have 30 days to make this request. You must supply it free of charge. You must do so within ten days of receipt of the request.
As indicated, the director of the Division of Civil Rights must prepare a model disclosure statement which you must use to advise applicants you intend to review criminal records. The Division of Civil Rights is also going to prepare a model notice that you must use to notify applicants that you are withdrawing a “conditional offer”.
The new law prohibits advertising regarding the availability of housing inconsistent with these requirements. You cannot communicate in any fashion the idea that any requirements for housing will be employed, directly or indirectly, that are inconsistent these requirements. You may not distribute or disseminate an applicant’s criminal record to any person not expected to use that information for purposes of evaluating the applicant in a manner consistent with this law.
The law purports to provide a Landlord with immunity if you follow its provisions by using CBC screening and approving convicts or if you choose not to screen, but drafting issues in this immunity provision significantly undermine its scope.
You may not require an applicant to submit to a drug or alcohol test or make them consent to release of information from a drug abuse treatment facility.
Violations of this law by you are violations Law Against Discrimination. If you are alleged to be violating the law the Division of Civil Rights must notify you of the claim and give you the opportunity to address the complaint within 14 days.
$1000 for first offense (no priors within seating five-year period).
$5000 for the second
$10,000 for third or more.
While these penalties are relatively low (compared with other violation so the Law Against Discrimination), all violations of that law provide complainants with the remedies of compensation for unverified claims of emotional distress, punitive damages and counsel fee awards.
There will be more: the act authorizes the adoption of regulations related to its enforcement.
There is real concern here because it is hard to imagine drafting a CBC denial justification report which complies with the requirements of this law leading to the conclusion that it is “necessary” to deny a particular applicant except in extraordinary circumstances. That is such a subjective determination that if you had to rely upon a judge or jury agreeing with your assessment, many risks are apparent. It is unclear how to avoid them.
Alternatively, it is also disconcerting to abandon all criminal background screening. To be of some use (as experience with this law evolves) it may make sense to continue to do the screening, yet refrain from denials unless there appears to be overwhelming justification for doing so consistent with these guidelines. If you are forced to house convicts (which appears to be the intent of this law) at least you will have more information than less. That can’t hurt. You also will be reserving the opportunity to deal with the applicant representing the worst-case scenario (which would appear to be the only justification for denial.)
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