Tenant Screening Rules in New York

In New York a landlord can charge an applicant only the actual cost of a background or credit check, up to $20, and must hand over a copy of the report and the receipt. You cannot reject someone for a past or pending housing court case, and if a credit or background report leads you to deny, add a co-signer or raise the deposit, federal law requires an adverse action notice.

NYC owners have further limits on criminal history and voucher holders. This guide puts the state statutes, federal credit reporting rules and NYC rules in one place, with a checklist you can use on your next vacancy. It is general information, not legal advice.

Application fees: the $20 cap

Real Property Law § 238-a bars landlords from charging any fee for processing or reviewing a rental application, or any other payment before or at the start of the tenancy, except rent, the security deposit and the screening fee. The screening fee is limited to the actual cost of the background check and credit check, or $20, whichever is less.

• Show your costs. Before you collect the fee, give the applicant a copy of the background or credit check and the receipt or invoice from the company that ran it.
• Waive it for recent reports. If the applicant gives you a background or credit check run within the past 30 days, you must waive the fee.
• No hidden fees. Holding fees, "admin" fees and move-in fees fall outside the exceptions. A lease clause that waives § 238-a is void.
• Co-ops: the statute lets cooperative corporations charge fees to cover a managing agent or transfer agent's processing of an application from a prospective owner-shareholder. That exception concerns buying shares, not renting an apartment.

Check a specific fee against the statute here:

Housing court history: the "tenant blacklist" ban

Real Property Law § 227-f says a residential landlord may not refuse to rent or offer a lease to someone because they were involved in a past or pending landlord-tenant case under Article 7 of the Real Property Actions and Proceedings Law. Article 7 is the summary proceeding law that governs both nonpayment and holdover cases, and the ban turns on involvement in a case, not its outcome.

The law includes a rebuttable presumption: if you request information from a tenant screening bureau or look up court records about an applicant and then decline to rent to them, you are presumed to have violated the law. The presumption can be rebutted, so keep a record of the actual, lawful reason for each denial. The Attorney General can sue for an injunction and civil penalties of $500 to $1,000 per violation.

Credit and background reports: federal rules

Tenant screening reports and credit reports are "consumer reports" under the federal Fair Credit Reporting Act (FCRA). The Federal Trade Commission's guidance for landlords sets out what you must do.

Permissible purpose

You may pull reports on people who apply to rent or to renew a lease. You certify to the reporting company that you will use the report only for that purpose. Written permission from the applicant is a good way to document it.

Adverse action notices

An adverse action is any decision unfavorable to the applicant. Denial is the obvious one, but the FTC also lists requiring a co-signer and charging a bigger deposit or higher rent than another applicant would pay. You must give notice even if the report was not the main reason.

The FTC allows oral notice but recommends writing, which also gives you a record. When you are done with a report, dispose of it securely: shred or burn paper, and erase electronic files so they cannot be read or reconstructed.

Keep criteria uniform and written

No New York statute hands you a single required formula, but fair housing law punishes treating applicants differently. The NYC Commission on Human Rights says applicants must be considered case by case and warns that relying only on screening scores can screen out protected groups. Writing your criteria down and applying them the same way to every applicant is the best evidence that you did. Use the tenant income ratio calculator to apply your income rule consistently.

NYC-only rules on top of state law

Details: Fair Chance Housing screening steps, source of income rules and FARE Act rules for landlords.

Money you can collect at signing

Section 238-a limits up-front payments to rent, the security deposit and the screening fee. The deposit itself is capped at one month's rent under General Obligations Law § 7-108; see NY security deposit rules for landlords. The same statute also limits late fees once the tenancy starts: no fee until rent is more than five days late, and no more than $50 or 5% of the monthly rent, whichever is less.

Tenant screening compliance checklist

Tick items off as you set up your process. Progress is saved in this browser.