NEW RESTRICTIONS ON TENANT BACKGROUND CHECKS IN NEW JERSEY

By Jennifer L. Alexander, Esq. June 25, 2021 Posted in Landlord/Tenant Law Share

On June 3, 2021, the New Jersey Legislature passed, and, on June 18, 2021, the Governor Phil Murphy signed, NJ S.B. 250 / A.B 1919 (2020), known as the Fair Chance in Housing Act (the “Act”). The purpose of the Act is to reduce the amount of recidivism amongst ex-convicts in the State of New Jersey. Statistics show that recidivism rates increase (and public safety decreases) when ex-convicts are unable to find stable housing. Consequently, the Act aims to reduce obstacles which may prevent ex-convicts from finding such housing by significantly altering how landlords may conduct background checks.

Under the Fair Chance in Housing Act, a landlord cannot require a prospective tenant to complete an application that includes any inquiries into the prospective tenant’s criminal record until after extending a conditional offer (i.e., an approval to the applicant providing the applicant first passes a criminal background check). Put another way, applications should no longer have any questions about a tenant’s criminal record (except for a few exceptions), and landlords should not perform criminal background checks on tenants until after approving the rest of the application. The landlord must approve a prospective tenant’s application and then give the prospective tenant a conditional offer before performing a background check.

With that said, there are two exceptions to this rule. At this first application stage, a landlord may consider if the applicant has ever been convicted of for the manufacture or production of methamphetamine on the premises of federally-assisted housing. A landlord may also consider if the applicant is subject to a lifetime registration requirement under the New Jersey sex offender registry.

After the conditional offer stage, when the landlord does perform a criminal background check, the prospective tenant must be provided with an opportunity to demonstrate any inaccuracies with the criminal record or any evidence of rehabilitation or other mitigating factors.

Additionally, before the landlord can accept any application fee, the landlord must tell the applicant in writing: (1) whether the landlord will review and consider criminal history and (2) that the applicant will have an opportunity to demonstrate inaccuracies or show rehabilitation or mitigating factors.

Then, after issuing a conditional offer to the prospective tenant, a landlord may only consider certain types of criminal history. The only types of criminal history the landlord may consider are:

1. convictions for certain very serious crimes: murder, aggravated sexual assault, kidnapping, arson, human trafficking, certain other sexual assault violations (i.e., those in violation of N.J.S.A. § 2C:14-1), causing a child to engage in certain sexual acts (i.e., those in violation of N.J.S.A. § 2C:24-4(b)(3)); or any crime that resulted in a lifetime registration on a State sex offender registry;
2. indictable offenses of the first degree that were either issued in the past six (6) years, or that resulted in a conviction that concluded within the past six (6) years;
3. indictable offenses of the second or third degrees that were either issued in the past four (4) years, or that resulted in a conviction that concluded within the past four (4) years;
4. indictable offenses of the fourth degree that were either issued in the past one (1) year, or that resulted in a conviction that concluded within the past one (1) year.

If an applicant’s criminal history contains any of the above considerations, the landlord may withdraw the conditional offer. However, in doing so, the landlord must provide the applicant with written notification specifying the reasons the conditional offer was withdrawn along with an opportunity for the applicant to demonstrate any inaccuracies with the criminal record or any evidence of rehabilitation or other mitigating factors.

When making the ultimate decision to approve or disapprove an applicant with a criminal history, the landlord is required to take a number of factors into consideration. Among these factors:

1. the nature and severity of the criminal offense,
2. the age of the applicant at the time of the criminal offense,
3. the time that has elapsed since the criminal offense,
4. any information produced by the applicant regarding good conduct since the criminal offense,
5. the degree to which the criminal offense would negatively impact the safety of the community if it reoccurred, and
6. whether the criminal offense occurred on or was connected with the property leased or rented by the applicant.

Importantly, landlords are immune from liability for any civil action arising out of a decision to rent to someone with a criminal record, or from the landlord’s decision to not perform a criminal background screening, with one exception: A landlord can still be held liable for renting an apartment to someone who was convicted of a serious crime (i.e., murder, aggravated sexual assault, kidnapping, arson, human trafficking, certain other sexual assault violations (i.e., those in violation of N.J.S.A. § 2C:14-1), causing a child to engage in certain sexual acts (i.e., those in violation of N.J.S.A. § 2C:24-4(b)(3)); or any crime that resulted in a lifetime registration on a State sex offender registry).

In addition to all of the above, a landlord cannot require an applicant to submit to a drug or alcohol test, or consent to the landlord obtaining information from a drug abuse treatment facility.

If a landlord violates the act, the landlord may be fined anywhere from $1,000.00 to $10,000.00, depending on the amount and frequency of those violations.

As should be evident, there are a lot of caveats that are part of the Fair Chance in Housing Act. So, for ease and brevity, below is a summary of how the new application procedure will unfold:

Step 1:  The prospective tenant submits an application.

This application cannot ask about the applicant’s criminal history except for the manufacture or production of methamphetamine on the premises of federally-assisted housing. or any lifetime registration requirement under the New Jersey sex offender registry. The landlord cannot perform a criminal background check at this time.

If the landlord wants to collect an application fee, then the landlord must inform the applicant in writing:

• whether the landlord will eventually conduct a criminal background check; and
• that the applicant will have an opportunity contest the results of any criminal background check.

Step 2:  Assuming the applicant otherwise qualifies for the apartment, the landlord provides a conditional offer to the Tenant.

Step 3:  If the landlord provided a conditional offer to the Tenant, the landlord may now perform a criminal background check.

Step 4:  The landlord may rescind the conditional offer if the criminal background check shows:

1. convictions for certain very serious crimes: murder, aggravated sexual assault, kidnapping, arson, human trafficking, certain other sexual assault violations (i.e., those in violation of N.J.S.A. § 2C:14-1), causing a child to engage in certain sexual acts (i.e., those in violation of N.J.S.A. § 2C:24-4(b)(3)); or any crime that resulted in a lifetime registration on a State sex offender registry;
2. indictable offenses of the first degree that were either issued in the past six (6) years, or that resulted in a conviction that concluded within the past six (6) years;
3. indictable offenses of the second or third degrees that were either issued in the past four (4) years, or that resulted in a conviction that concluded within the past four (4) years;
4. indictable offenses of the fourth degree that were either issued in the past one (1) year, or that resulted in a conviction that concluded within the past one (1) year.

Step 5:  If the landlord rescinds the conditional offer based on the results of the criminal background check, the tenant may provide context for the criminal offense in question.

Step 6:  Before making any final decision, the landlord must take into account:

1. the nature and severity of the criminal offense,
2. the age of the applicant at the time of the criminal offense,
3. the time that has elapsed since the criminal offense,
4. any information produced by the applicant regarding good conduct since the criminal offense,
5. the degree to which the criminal offense would negatively impact the safety of the community if it reoccurred, and
6. whether the criminal offense occurred on or was connected with the property leased or rented by the applicant.

Step 7:  As long as the tenant was not convicted of any of the criminal offenses listed under Step 4(a), then the landlord is immune from any suits related to the decision to rent to the applicant.

The Act takes effect “on the first day of the seventh month next following the date of enactment.” As the Act was on June 18, 2021, seven (7) months from that date is January 18, 2022. The first (1^st) day of the month following those seven (7) months is February 1, 2022. Importantly, the Act provides that that the Division on Civil Rights in the Department of Law and Public Safety “may take any anticipatory administrative action in advance as shall be necessary for the implementation of this act.” In other words, while the act itself won’t officially be in effect until February 1, 2022, the state may start making administrative rule changes before that date in preparation—those rule changes may come into effect before February 1, 2022.

Ultimately, this new law will significantly the change way a landlord’s business operates. A landlord must now be careful that it provides the proper notices during the application procedures, and only denies an applicant for approved reasons. However, a landlord will be immune from liability should a tenant have committed certain criminal offenses.

There are a lot of facets to this law, and it will affect the way you screen prospective tenants going forward. Because the Fair Chance Housing Act will change so much of the way the landlord-tenant business is currently performed in New Jersey, we recommend you develop new procedures to ensure you are in compliance. Please call us, and we can assist you by helping to develop  new protocols or by scheduling a seminar for your staff.

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 on particular circumstances.  Each legal matter is unique, and prior results do not guarantee a similar outcome.

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