As 2024 draws to a close, boards and managers should be aware of new legislation which profoundly impacts admissions practices in community associations in New York City.
The legislation, popularly known as the Fair Chance for Housing Act, becomes effective on January 1, 2025. The provision primarily applies to cooperative boards, as they are directly involved in interviewing candidates for admission to their communities. However, it also applies to condominium and HOA boards that use applications and interviews as part of the Right of First Refusal process.
As of January 1, 2025:
- Boards in New York City must change any existing written admissions application or must omit from any newly created application forms any printed or digital text which alludes to any inquiry into a candidate’s criminal history.
- Boards must refrain in any interview from inquiring into a candidate's criminal history.
- Criminal background checks are not per se prohibited. However, there are several procedural hoops through which a board must jump if it elects to pursue a background check on a candidate. Before undertaking the check, a board must review all other factors and render a provisional approval or rejection without regard to criminal history. If the board thereafter opts to perform a background check, the lookback period from the date of the search is three years for a misdemeanor charge, and five years for a felony charge.
- If the board proceeds with its background check, the candidate needs to be informed of the search, be provided with a copy of the report, and needs to be given a five-day notice period to rebut or explain any content.
- If the board decides to reject based upon the content of a background check it must (a) provide reasons; (b) show how its rationale for the rejection is related to the legitimate business interests of the community; and (c) show how the information submitted in support of the candidate's application was considered in the decision.
- The ordinance relieves boards of liability to their owners for malfeasance if they elect to forfeit the background check in light of these restrictions and criminal harm ultimately befalls the community.
We strongly urge boards to consult with counsel before deciding to reject a candidate based upon the content of a criminal background report, and to seek counsel’s assistance in preparing the requisite written statement accompanying the rejection.
Bruce A. Cholst and Andrew B. Freedland are partners with New York City-based law firm Herrick Feinstein LLP. They may be reached at bcholst@herrick.com and afreedland@herrick.com.
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