The Fair Chance for Housing Act (FCHA) was enacted on January 1, 2025, and substantially alters how New York City Co-op and Condo boards review purchase and lease applications going forward. In short, the law places new limits on the use of criminal background checks and imposes strict procedural requirements if such checks are to be used as the basis for a denial of an application.
Boards should be aware of the following key provisions of the FCHA:
- Criminal background checks cannot be conducted until after the board has otherwise reviewed and approved the applicant. If the board chooses to run a background check then, it must first inform the applicant of the conditional approval and provide them with a Fair Chance Housing Notice—a form provided by the New York City Commission on Human Rights (the “HR Commission”).
- The board can only search for “Reviewable Criminal History,” which includes sex offender registries, felony convictions within the last five years, and misdemeanor convictions within the previous three years. The law also provides that certain categories of criminal history are not reviewable, such as youthful offender convictions or sealed, expunged, or otherwise vacated offenses. If the board uses a vendor to conduct the background check, the law mandates that it take “reasonable steps” to ensure that the check complies with the law.
- Prior to determining the approval of the applicant, the board must first provide the applicant with a copy of the background check and grant them five business days to provide additional information regarding any errors or mitigating information.
- After such period, if the Board determines to reject the applicant based upon the Reviewable Criminal History, it must first:
- Conduct an individualized assessment of the applicant’s history and information.
- Provide the applicant with a written copy of the reasons for the denial and an explanation of why the criminal history is relevant to a legitimate business interest of the property owner (along with providing all supporting documents) and how any information submitted in support of the applicant was considered.
- If a board elects to forego a criminal background check, the law provides that they are immune from any civil liability arising from an act of a person with a criminal history from a claim that the board should not have approved the applicant based upon their criminal history.
Failure to comply with the law could lead to costly legal fees in defending claims in front of the HR Commission. Accordingly, we are recommending that to the extent a co-op or condominium board uses criminal background checks in connection with their approval process, they confer with their managing agent and counsel and develop a policy/protocol to ensure compliance with the law, including adding the Fair Chance Housing Notice in all application packages. At a minimum, boards should also consult with counsel before denying any applications based on the results of a criminal background check.
For any inquiries, please contact Peter Salzler at psalzler@braverlaw.net.