Low Credit Score May Not Be A Bar To The Housing Market
The fall out of the pandemic is that many New Yorkers are left with bad credit due to increased debt, loss of employment and/or medical expenses etc. So many have been put behind the eight ball financially. As such, a bill has been proposed, A10676, before the New York Assembly to ensure that debt and bad credit scores resulting from certain specific situations do not hinder a person’s ability to rent a residential unit in New York.
The bill seeks to amend the Real Property Law to add section 227-g that will provide the following proposed language: “No landlord of a residential premises shall refuse to rent or offer a lease to a potential tenant due to a potential tenant’s consumer credit history or score, or lack thereof, if the potential tenant….”
a. Made full rent payments within 5 days of the date rent was due for 12 months before the rental application (excluding the Covid period)
b. Receives government subsidy or program that pays monthly rent in its entirety directly to the landlord.
c. Has negative Credit history due to medical or student loan debts.
d. Has negative Credit history due to domestic violence sexual assault and the like.
A landlord will be required to inform the tenant that he is being denied the apartment as a result of his poor credit, providing the tenant with an opportunity to explain the reason for the low score. There will be a rebuttable presumption that a person is in violation if the lessor refused to rent or lease to such person after the tenant demonstrated he fell under an exception.
The bill also proposes that the Attorney General may bring proceedings against the person, corporation, agent or employee enjoining the continuance of such violation and for civil penalties of between $500 to a $1000 for each violation. In addition to this new proposed section, the Human Rights Commission already has in place law against discriminating against prospective tenants based upon their income source, i.e. voucher and/or subsidy.
Landlords beware; you are liable for your agent’s actions and words uttered when renting apartments. Indemnity agreements should be considered.
SDK HEIBERGER TEAM