As of January 1, 2025, the NYC Fair Chance Housing Act is officially in effect, requiring co-op and condo boards to update their purchase application processes to comply with new restrictions on criminal background checks. This law limits when and how boards can consider criminal records and introduces strict procedures that must be followed when evaluating applicants.
At Total Management NYC, we help co-op and condo boards navigate NYC’s evolving housing laws while ensuring compliance and protecting their buildings. Below is a breakdown of what boards need to know and the steps they must take to comply with the law.
Key Requirements Under the Fair Chance Housing Act
What Co-op & Condo Boards Cannot Do:
Ask about criminal records in the initial purchase application.
Conduct a background check before conditionally approving a purchaser.
Deny an applicant based on non-reviewable criminal history (see below).
Include any reference to a criminal background check in the credit check or application.
What Boards Must Do Instead:
Review and conditionally approve the application based on financials, references, and other standard criteria.
Only after conditional approval may the board conduct a criminal background check.
Provide the NYC Fair Chance Housing Notice with the application.
Follow a strict process if revoking a conditional approval based on a background check.
For further details, visit NYC Fair Chance Housing Act.
What Criminal History Can Be Considered?
Under the law, only certain convictions—called "Reviewable Criminal History"—may be considered when deciding whether to reject an applicant.
Reviewable Criminal History (May Be Considered for Rejection):
Sex offense convictions requiring registration (no time limit).
Felony convictions within the last 5 years, measured from the date of release from incarceration or sentencing (if no incarceration occurred).
Misdemeanor convictions within the last 3 years, measured from the date of release from incarceration or sentencing (if no incarceration occurred).
Non-Reviewable Criminal History (Cannot Be Considered):
Boards cannot reject an applicant based on:
Arrests, pending cases, or accusations without a conviction.
Dismissed or non-prosecuted cases.
Sealed, expunged, or pardoned convictions.
Youthful offender adjudications or juvenile records.
Convictions related to:
Reproductive or gender-affirming care (if lawful in NY).
Cannabis possession (if not a felony in NY).
Minor offenses such as disorderly conduct.
For more details, visit NYC Human Rights.
Step-by-Step Compliance Guide for Co-op & Condo Boards
1. Update Application & Screening Policies
Remove all references to criminal background checks from applications and credit checks.
Include the NYC Fair Chance Housing Notice in all purchase applications.
2. Conditional Approval Process
Boards must first:
Review all financial, personal, and reference checks.
Interview and conditionally approve the purchaser before conducting a background check.
3. If a Reviewable Criminal History is Found…
Boards may only revoke conditional approval if:
There is a legitimate business interest, and
There is a specific, objective link between that interest and the conviction.
Invalid reasons for rejection include:
Stating that the building is a “family-oriented” property.
Rejecting an applicant due to concerns about "tenant safety" based on assumption rather than facts.
Denying an applicant based on pressure from existing shareholders.
A valid reason for rejection might include:
A direct conflict with a specific lease requirement, such as a history of financial fraud in a building with strict financial disclosure obligations.
4. Give Applicants a Chance to Respond
If the board intends to revoke an approval, it must provide the applicant with:
A copy of the criminal history report.
At least five business days to correct errors or provide additional information, such as:
Proof of rehabilitation.
Personal or professional references.
Certifications or employment history.
5. Issue a Final Written Decision
If the board still decides to reject an applicant, they must provide a written explanation that includes:
The legitimate business reason for the rejection.
How the applicant’s personal information was considered.
Why Co-op & Condo Boards Must Take This Seriously
The NYC Commission on Human Rights (CCHR) is actively enforcing the Fair Chance Housing Act. Boards that violate the law could face:
Lawsuits from rejected applicants.
Significant fines.
Reputational damage to the building and board members.
How Total Management NYC Can Help
With over 30 years of experience in NYC property management, we help co-op and condo boards:
Update admissions policies to comply with the new law.
Train board members and managing agents on the Fair Chance Housing Act.
Oversee compliant and legal applicant screenings.
Avoid costly legal battles.
Final Takeaway
The NYC Fair Chance Housing Act is now in effect, and co-op and condo boards must take action to ensure compliance. Boards should:
Update the purchase application process.
Train board members on the new law.
Ensure all decisions comply with Fair Chance Housing rules.
To protect your building and avoid legal risks, consult with an attorney for legal guidance. Additionally, schedule a consultation with Total Management NYC at Schedule a Consultation for expert property management assistance.