Legislative Update - Fair Chance in Housing Act

July 15, 2020 Posted in Landlord/Tenant Law Share

This Thursday, July 16, 2020, the Senate Community and Urban Affairs Committee will be considering the bill with a Senate Number of S250.  This bill establishes the “Fair Chance in Housing Act.”

The goal of the bill is to restrict a housing provider from requiring an applicant for housing to complete any housing application that includes any inquiries regarding the applicant’s criminal records prior to a conditional offer. 

The bill defines a “conditional offer” as “an offer to rent or lease a dwelling unit to an applicant that is contingent on a subsequent inquiry into the applicant’s criminal records, or any other eligibility criteria that may be lawfully utilized.”

Prior to accepting any application fee, a landlord must disclose, in writing, (1) whether eligibility criteria for an application includes the review and consideration of criminal history, and (2) supply the applicant with a statement that the applicant may provide evidence demonstrating inaccuracies within a criminal record, evidence of rehabilitation, or other mitigating factors.

Once a conditional offer is made, a landlord may consider a criminal record in an applicant’s history that:

• has occurred within the last 10 years; and
• consists of a pending criminal accusation or a non-expungable criminal conviction.

A landlord may withdraw a conditional offer based on an applicant's criminal record only if the housing provider determines, on balance, that the withdrawal “achieves a substantial, legitimate, nondiscriminatory interest.” The landlord's determination of a nondiscriminatory interest shall be reasonable in:

• The nature and severity of the offense;
• The age of the applicant at the time of the offense;
• The time elapsed since the offense;
• Any information produced regarding rehabilitation and good conduct since the occurrence of the offense;
• The degree to which the offense, if it reoccurred, would negatively impact the safety of other tenants or property; and
• Whether the offense occurred on or was connected to property that was rented or leased by the applicant.

Upon the withdrawal of an application, a landlord must provide the applicant with written notification that includes the reason for the withdrawal and a notice that advises the applicant of the right to file a complaint with the Attorney General. The applicant may request that the housing provider afford the applicant a copy of all information relied on in considering the applicant, within 20 days after the housing provider's notice of the withdrawal. The landlord must provide this information free of charge, within l0 days after receipt of a timely request.     

The applicant may file a complaint or action with the Division on Civil Rights or in the Superior Court of New Jersey alleging a violation of the "Law Against Discrimination," P.L.1945, c.169 (C.10:5-1 et seq.).  A landlord in violation of its provisions liable for a civil penalty in an amount not to exceed $1,000 for the first violation, $5,000 for the second violation, and $10,000 for each subsequent violation collectible by the Attorney General in a summary proceeding pursuant to the “Penalty Enforcement Law of 1999,” P.L.1999, c.274 (C.2A:58-10 et seq.).

The bill would not apply if a federal law or regulation requires the landlord to consider an applicant’s criminal records for the purposes of leasing a residential dwelling unit, or if a federal law regulation otherwise allows for the denial of an applicant due to certain criminal convictions.

This bill is was introduced on January 14, 2020. Previously, the Department of Housing provided guidance on criminal background checks in 2016. The guidance explained that there was a correlation between criminal records and protected classes. You can read about our prior blog on this guidance here.

This guidance is ambiguous, leaving landlords with inadequate guidance. In general terms, the guidance encouraged landlords not to discriminate based on criminal background statistics, but it provided no specific recommendations. For example, a landlord is unable to determine whether to reject or accept an applicant with certain criminal behavior from five years ago, ten years ago or thirty years ago.

As a general principle, the guidance provided by this bill is a benefit to landlords. However, the specific terms of the bill are intrusive and over-restrictive on landlords. The bill should be revised so as not to require the landlord to provide a statement that they may be sued, as it encourages applicants to bring lawsuits against landlords. The bill should also allow landlords to consider certain crimes in proportion to the year in which the crime was committed.

The information in this Client Alert is provided solely for information purposes. It should not be construed as legal advice on any specific matter and is not intended to create an attorney-client relationship. The information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based upon particular circumstances.  Each legal matter is unique, and prior results do not guarantee a similar outcome.

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