ADA M LEITM A N BAILEY, P.C.WE GET R ESULTS

Tenant Fair Chance Act:What Property Owners and Managers Need to Know to

Comply

Avoiding Getting Sued: Check Out Your Rental Application Under Tenant

Screening Act

By Adam Leitman Bailey, Dov Treiman, and Blair Parsont

The recent New York City legislation requiring certain features to appear on

rental applications led us to spot check our clients’ rental applications.

We were shocked. Every rental application we checked included features

that were an expensive lawsuit against the landlord waiting to happen. We have

identified roughly twenty forbidden grounds for discrimination in rental housing

in New York City. Every rental application we examined revealed questions

designed at eliciting information that would set up the landlord for a complaint

about discrimination on at least one of these forbidden grounds.

The laws in question prohibit discrimination based on age; alienage or

citizenship status; any lawful source of income; color; creed or religion; disability

or handicap; familial status; gender; marital status; military status; national

origin; occupation; partnership status; race; sexual orientation; status as a victim

of domestic violence or status as a victim of sex offenses or stalking; or whether

children are, may be or would be residing with a person. While many of these

grounds appear in several different laws simultaneously, the entire collection of

grounds can be found spread out over the Federal Fair Housing Act §3604, the NY

Executive Law §296, the NYC Administrative Code §8-107, the NY Real Property

Law §§ 237 and 237-a, and 24 CFR §100.202.

For many of these categories, it does not matter whether or not you have

absolute knowledge that the person belongs to such category; the discrimination is

prohibited even against those who are not actually in that category but whom you

might think are in such category. These could include, for example, European

people with a tan so heavy you believe them to be from India or a so-called

“metrosexual” whom you believe to be gay. You should therefore avoid the

practice of having the person who makes rental decisions having access to a

photograph of the applicant. You should avoid any kind of chitchat with an

applicant at all as such chatting can lead to questions or comments that could be

perceived as stumbling into at least half a dozen of these categories. Keep in mind

that even if you accept this person as a renter, later conflicts with the person

might find you defending a charge of unlawful discrimination. The prohibition is

not merely against refusing to rent to the persons protected by these laws; it

applies equally to refusing to continue to rent to such persons. You could find

yourself bringing a proceeding against a tenant for having a portable dishwasher

in the apartment and facing a defense that you are only going after the

dishwasher because you don’t want to rent to people with children! Therefore,

when it comes to these categories, odd as it seems, actually the less you know

about your tenants, the better.

Attached to this article is a generic apartment rental application we have

prepared for our client’s readership, designed to give you as much information as

you can legally request and designed to avoid getting you sued for asking too

much.

The application also conforms with New York City’s new Tenant Fair Chance

Act, targeted at your disclosing to your prospective tenants just what your

screening process entails. The Act also calls for your putting up posters in your

rental offices, for which the Department of Consumer Affairs has released the

specification that appear at the end of this article. The deadline for putting up

these posters is September 18, 2010, with specific sizes and colors. You will

therefore want to get them designed and off to your printer as soon as possible. If

you don’t, the fines can be devastating.

As to the application form, you should notice that it has two critical features

in order to comply with the new law: that it is in two columns on the first page

and that while the first column must be in black, the second column, the one

containing the statutorily required language, must not be in black. Therefore,

when you have your tenant applicants fill it out, if you are not having the forms

professionally printed in color, you absolutely must run off additional forms on a

color copier. Once the tenant makes out the form, we strongly recommend that

you make color copies of the fully filled out form and give one of those color copies

to the tenant. Less expensively, you can have the tenant fill out duplicate forms

by using old fashioned carbon paper.

Do not use a black and white copier, black and white scanner, or fax machine under any circumstances in anything involving these forms. You are only asking

for trouble. If you email copies of these forms, you must email them in color,

preferably in the form of a pdf. Do not even circulate them in your own

organization or to your attorneys in anything but color.

Finally, while you do not have to fill out the right hand column of the form in

red ink, you must not use black ink or a pencil. While we recommend using red

ink, almost any non-black color is acceptable, although we would strongly advise

against dark blue that could be mistaken for black.

There was a time, a generation ago, when the prohibited grounds for

discrimination were “race, color, or creed” and nearly every school child would

have that list memorized. Now, however, the list is so long and so complicated, we

urge you to laminate a copy of this article and keep it handy in your rental office.

It could save you tens of thousands of dollars in needless fines.

These are the rules for the rental office posters:

(1) The words “NOTICE ABOUT TENANT SCREENING REPORTS” shall be

printed at the top of the sign in one and one half-inch high capital letters.

(2) If application information is or may be used to screen tenants through a report

from a consumer reporting agency, the sign shall state in 24-point type as follows:

“Tenant screening reports from consumer reporting agencies are sometimes used

to assist landlords in making rental decisions. In regard to such reports (Check

the applicable box):

[ ] We do not use such reports.

[ ] We may use such reports by contacting the following:

(Insert name and address of each consumer reporting agency that may be

contacted, and identify any that are a nationwide specialty consumer reporting

agency).

(Use additional lines for each listed agency).

“The law requires us to notify you if we do not lease or rent to you based on

information in that report. You also have the right to dispute the accuracy of the

information in the report directly with the reporting agency and to obtain a free

report from such agency if we do not lease or rent to you based on such report.

“You also are entitled to receive one free report every 12 months from any

nationwide specialty consumer reporting agency used by us, as well as a free

credit report every 12 months from each of the nationwide consumer credit

reporting companies: Equifax, Experian and TransUnion. You can request this

free credit report through the website www.annualcreditreport.com. You may

dispute the accuracy of any information about you that is contained in such report

directly with the credit reporting agency.”

(3) The color of the text of the notice required in paragraph (1) of subdivision (a)

shall contrast sharply with the color of the remaining text, and the colors of the

printed text shall contrast sharply with the background color of the sign.

(4) All the required information shall be included on one sign that shall be posted

at the location at a place where it is conspicuously visible to a consumer who is

seated while the transaction is conducted at such location.

Application for Apartment Rental Page 1 of 4 Please print all information. All questions must be answered for our company to consider your application.

Applicant Information Name: __________________________________________ Present Address: ____________________________________________________________________________________ Present Landlord’s Name and Address: ____________________________________________________________________________________ Years at Present Address: ____________________ Telephone: ________________________________ Prior Address: ____________________________________________________________________________________ SS #: _____________________________________ Date of Birth: ______________________________ Driver’s License # __________________________ Current Member of Military Service: Yes No Emergency Contact Name & Telephone: ____________________________________________________________________________________ Present Employer/Business: ____________________________________________________________________________________ Present Employer/Business Address: ____________________________________________________________________________________ Years at Employer/Business: __________________ Telephone: ________________________________ Gross Weekly Income: _______________________ Position: __________________________________ Other Weekly Income: _______________________ Source of Other Income: _____________________ Total Court Ordered Income per Month (provide proof):____________________________________ Total Court Ordered Payments per Month (provide proof):____________________________________ Previous Employer/Business: ____________________________________________________________________________________

PLEASE NOTE:

Application information provided by you and all other persons on this application may be used to obtain a tenant screening report. Such report shall be obtained from First Advantage SafeRent, Inc.. First Advantage SafeRent Inc. can be reached at: Consumer Relations 7300 Westmore Road, Suite 3, Rockville, Maryland 20850-5223. By phone: (888) 333-2413 Pursuant to federal and state law: (1) if a user takes adverse action against a prospective tenant on the basis of information contained in a tenant screening report, such user must notify the tenant that such action was taken and supply the name and address of the consumer reporting agency that provided the tenant screening report on the basis of which such action was taken; (2) any prospective tenant against whom adverse action was taken based on information contained in a tenant screening report has the right to inspect and receive a free copy of such report by contacting the consumer reporting agency; (3) every tenant or prospective tenant is entitled to one free tenant screening report from each national consumer reporting agency annually, in addition to a credit report that should be obtained from www.annualcreditreport.com; and (4) every tenant or prospective tenant may dispute inaccurate or incorrect information contained in a tenant screening report directly with the consumer reporting agency.

Application for Apartment Rental

Page 2 of 4 Previous Employer/Business Address: ____________________________________________________________________________________ Years at Previous Employer/Business: __________________________________________ Telephone: ________________________________ Bank Account # __________________________ Amount: _________________________________ Bank Name & Location: ______________________________________________________________ Total of Outstanding Loans: ________________ Total Monthly Loan Payment: ________________ Name & Address of Creditor(s): ________________________________________________________ Loan Account Numbers: ______________________________________________________________ E-mail Address____________________________ How did you hear about us? _________________ Co-Tenant/Guarantor Information Name: ____________________________________________________________________________ Present Address: ____________________________________________________________________ Years at Present Address: ________________ Telephone: _________________________________ SS #: ___________________________________ Date of Birth: _____________________________ Driver’s License # ________________________ Current Member of Military Service: Yes No Relationship to Applicant: Co-occupant without independent rights Co-Tenant Guarantor Emergency Contact Name and Telephone: _______________________________________________ Present Employer/Business: ___________________________________________________________ Present Employer/Business Address: ____________________________________________________ Years at Employer/Business: ________________ Telephone: ________________________________ Gross Weekly Income: _____________________ Position: __________________________________ Previous Employer/Business: ___________________________________________________________ Previous Employer/Business Address: ____________________________________________________ Years at Previous Employer/Business: ________________ Telephone: _________________________ E-mail Address ___________________________ How did you hear about us? __________________ Others to Reside in Apartment (Do not furnish ages of adults.)

Name Age Relationship to tenant or other occupant

Applicant acknowledges that they have been advised that NO PETS are allowed on the premises under any circumstances. Applicant initial _________ Co-Applicant initial ________ Apartment Information Address and Apartment Being Applied for: _______________________________________________ Monthly Rent: _____________________________ Desired Start Date: ________________________

Application for Apartment Rental Page 3 of 4 Additional Information Needed to Process This Application: Please provide copies of the following items and attach to this application. All applications must all include Copy of Driver’s License/ID and Social Security Card. Failure to provide all information requested will result in immediate denial of application. A. If you work for a company: Employment letter on employer’s letterhead verifying: Length of employment Annual income for past two years Copy of most recent 3 pay stubs Copy of your complete Federal Income Tax Return (including all schedules, W2, & 1099 forms) 3 most recent complete bank statements Letter of reference from your prior landlord and cancelled rent checks for the past 3 months B. If you are self employed or commission based: Letter from your accountant verifying: Length of employment, type of business Annual income for past two years Copy of your complete Federal Income Tax Return for the past 2 years (including all schedules,

W2 & 1099 forms) 3 most recent complete bank statements Letter of reference from your prior landlord and cancelled rent checks for the past 2 months C. Guarantor Requirements: All items listed in A or B above, as applicable Applicants’ additional comments, if any: Office use:

Application for Apartment Rental Page 4 of 4 Landlord will require one money order in the total amount of $200.00. Please pay by Money Order ONLY, made payable to Landlord. This fee is a non-refundable processing fee. If you require a guarantor, please include an additional $150.00 non-refundable processing fee. Guarantor must fill out application and provide all information required. Payment must be made via Money Order ONLY. Acceptance of said fees is not to be construed as acceptance of tenancy application. Applicant will sign an authorization allowing the Landlord to obtain credit information. Landlord will obtain a credit and income verification, and based upon that will determine the amount of security applicable. All applicants are required to have a yearly income of at least 45x the monthly rent and a minimum credit score of 725 (using the FICO classic 95 scoring system*). There are no EXCEPTIONS!! Guarantors are required to have a minimum credit score of 725* and have sufficient income to cover their own bills in addition to the person for whom they are providing the guarantee. Guarantor must have their primary residence in NY. The Landlord will in no event be bound, nor will possession be given, unless and until a lease executed by the landlord has been delivered to tenant. The applicant and his/her references must be satisfactory to the Landlord. No representations or agreement by agents, brokers, or others are binding on the Landlord unless included in the executed lease. It is understood that security is NON-TRANSFERABLE. Security on current apartment will be refunded provided there are no damages or extra work required in the unit, tenant remains until end of the lease and fulfills all lease obligations. I hereby warrant that all my representations set forth herein are true. I recognize that the truth of the information contained herein is essential. I further represent that I am not renting a room or an apartment under any other name, nor have I ever been dispossessed from any apartment, nor am I now being dispossessed and that I am over 18 years of age. I have been advised that I have the right to make a written request, directed to the appropriate credit reporting agency, within a reasonable time for a complete and accurate disclosure of the nature and scope of any credit investigation. I understand that upon submission, this application and all documents become the property of the Landlord, or Agent, and will not be returned to me under any circumstances. I hereby authorize the Landlord to conduct a background investigation, which will be necessary to qualify me as a tenant. I authorize credit bureaus, financial institutions, employers, or other persons having personal knowledge about me, to furnish bearer with any and all information in their possession regarding me in connection with a rental agreement. I will present any other information required by the Landlord in connection with the lease contemplated herein. ___________________________________ ________________________ _______________ Applicant’s Name (Print) Signature Date ___________________________________ ________________________ _______________ Spouse, Co-Tenant, Guarantor Name (Print) Signature Date If this is a joint application, both parties must sign this form.