New law says NY landlords cannot reject you for being on the 'tenant blacklist'—but they might try anyway
If landlords use housing court information to deny you an apartment they can now face fines of up to $1,000.
Let's say that years ago, you withheld rent in order to force your landlord to do provide heat to a freezing apartment and wound up in housing court. You may have found that you have had trouble renting ever since because that trip to housing court landed you on the "tenant blacklist."
It's easier to get on the so-called tenant blacklist than you might expect—either through non-payment of rent or breaching the lease—and it has given landlords lots of power. Now, as a result of landmark rent reforms, landlords can no longer deny you an apartment based solely on this information. This is a reform designed to give extra protection to tenants who have asserted their rights and fought a landlord in housing court.
Some landlords take issue with the term ‘tenant blacklist’ because it’s not an actual list. You could think of it as a result of searching court documents, so if you’ve been involved in disputes in NYC Housing Court, regardless of the outcome and even if you had legitimate claims, your name will be on court records that can come up in searches that a landlord can pay a tenant screening office to provide. Steve Micheal White, the owner of Rent Prep, a national screening company that provides data for landlords, says this is the number one piece of information they are usually looking for.
The law now says if a landlord refuses to offer you an apartment based on information garnered from housing court records, they face a fine of up to $1,000. But whether that fine is a big enough deterrent for leasing agents who want to weed out tenants this way remains to be seen. Landlords say the penalty is unenforceable and that they will get the information through other means.
Ellen Davidson, a staff attorney with the Legal Aid Society of NYC, says the new law is a "first attempt" to have state legislation on the issue and it will be a matter of seeing how it pans out in practice.
You can't ban public information
Adam Frisch, a leasing agent, and managing principal at Lee & Associates Residential NYC, says he is sympathetic to people who live in buildings with a lack of services or no heat, where there are legitimate claims for a lawsuit but he says preventing a landlord from using public information to vet tenants is “unenforceable.” He says the rule about the tenant blacklist is “one of the most pointless laws to come out of this whole debacle.”
Tenants activists wanted the reforms to go further but it's impossible to ban the use of information that's already in the public domain. Sam Himmelstein, a partner at Himmelstein, McConnell, Gribben Donaghue & Joseph (and a Brick Underground sponsor) says, "anyone has a right to see a court filing unless it’s been sealed. There will never be an outright ban of the blacklist."
So, the law changes nothing, says Frisch. "Landlords will find this information out and they will reject people based on this and tenants will not know and there will be no way for the attorney general’s office to enforce this,” he says.
The fine may be no deterrent
A fine of up to $1,000 is the penalty for landlords if they are caught rejecting a tenant solely for being on the so-called tenant blacklist. And that's a big "if." Landlords may decide the penalty for weeding out tenants this way is worth the fine they'll receive if the attorney general investigates and catches them. This may just be the "the cost of doing business," says Himmelstein.
There's less opportunity for correcting mistakes
If landlords can no longer be transparent about finding your name on the NYC housing court records, they will be less invested in clearing up any confusion. Frisch says he would, in the past, take a look at the specifics of a case.
“I have put people in buildings who have had legal issues, who have had a bankruptcy, even lawsuits with other landlords—because they could prove that the landlord was crazy and they were perfectly reasonable. I don’t have the ability to do that anymore so I won’t,” he says. Add this to the fact that landlords can no longer take more than one month’s rent as security and Frisch says more people will be rejected.
“I’ve now turned down three people in the past two weeks for shady credit because I couldn’t take extra security,” he says.
It could create a bigger headache for other tenants
The way smaller landlords and larger institutional landlords adapt to the new law may be different. Smaller landlords may indeed find ways around the rule change. White says larger NYC landlords who manage thousands of units have already asked his company to remove any housing court data from the screening info they pay for, but he says that could backfire.
"You're losing a lot of data that's super important, not just for landlords to mitigate their risk, but also to tenants who want to be sure they are living in safe places," he says.
White believes a better approach would have been to improve the efficiency of the housing court and the information that comes out of it.
Tenant activists want additional protections
The reforms did not create a Private Cause of Action for tenants and this is "the law's biggest weakness," says Himmelstein. The Private Cause of Action is when one party is allowed to sue another party based on a given law. So in this case, it means tenants cannot sue a landlord for rejecting them based solely on the use of housing court information.
"All that can happen is the attorney general can investigate it and fine the landlord," says Himmelstein. He anticipates tenant activists will be busy in the next legislative session, fighting for the right to sue a landlord if they feel they’ve been denied housing based solely on the tenant blacklist.
The takeaway
What started off sounding like a major win for tenants feels decidedly less so when you delve into the finer points.
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