NYC Tenant Screening Guide: Fair Housing Rules, Background Checks, and Application Fees (LL63)
10 min read · Updated 2025-01-15
NYC tenant screening requirements: federal and state Fair Housing Act rules, source of income protections, permissible background checks, NYC application fee limits under LL63, and adverse action notices.
NYC Tenant Screening Rules
What fair housing rules apply to NYC landlords during tenant screening?
NYC landlords are subject to multiple layers of fair housing law: (1) Federal Fair Housing Act — prohibits discrimination based on race, color, national origin, religion, sex, familial status, and disability; (2) New York State Human Rights Law — adds protections for age, marital status, and other classes; (3) NYC Human Rights Law — the broadest protection, adding source of income (lawful income including Section 8), sexual orientation, gender identity/expression, citizenship status, credit history (for some applications), domestic violence victim status, and more. NYC's list of protected classes is among the most extensive in the country.
What is source of income discrimination and why does it matter in NYC?
Source of income discrimination means refusing to rent to a tenant because their rent is paid in whole or in part by a government program (Section 8 Housing Choice Voucher), Social Security, disability benefits, child support, or other lawful income sources. NYC prohibits this under the NYC Human Rights Law. A landlord cannot refuse to accept a Section 8 voucher, charge different terms to voucher holders, or steer them to specific units. Violations can result in complaints to the NYC Commission on Human Rights and significant monetary awards.
What is the NYC application fee rule (Local Law 63)?
Local Law 63 of 2018 limits the application fee a landlord can charge for a residential rental unit to no more than $20. This $20 limit applies per application regardless of the actual cost of the credit or background check. Charging more than $20 is a violation of the NYC Administrative Code. Free-market landlords who previously charged $50-$200+ in application fees must comply. The $20 fee must be waived entirely if the applicant provides their own background check report from a recognized screening company.
What criminal history can I consider in NYC tenant screening?
NYC Human Rights Law imposes significant restrictions on using criminal history in housing decisions. Landlords must consider the nature and gravity of the offense, the time since the conviction, and the nature of the housing and its relevance to the offense. Blanket "no criminal history" policies are prohibited. The law requires an individualized assessment. Arrests without conviction cannot be considered at all. NYC is not the only jurisdiction with these rules — New York State also has Article 23-A protections for people with criminal records seeking housing.
What is an adverse action notice and when must I provide one?
Under federal Fair Credit Reporting Act (FCRA), when you take an adverse action based in whole or in part on a credit or background report (declining an application, offering less favorable terms), you must provide the applicant with an "adverse action notice." The notice must include the name and contact information of the reporting agency, the applicant's right to a free copy of the report, and the right to dispute inaccurate information. Failure to provide adverse action notices can result in FCRA liability.
What income requirements can I legally set for tenants?
The traditional 40x rent rule (monthly income = 40x monthly rent) is common but must be applied consistently and may be problematic if used to screen out Section 8 voucher holders (since the voucher covers a portion of rent). If you use income requirements, apply them uniformly and document your policy. Be careful with requirements that, even if facially neutral, have a disparate impact on a protected class. For example, a very high income requirement in a diverse neighborhood might screen out protected groups at higher rates.
Can I reject an applicant based on rental history?
You can consider rental history — prior evictions, non-payment, or negative landlord references — but must do so carefully. Eviction records are a gray area: some evictions were dismissed or resulted in no judgment, and using them inappropriately can raise fair housing concerns. Some NYC landlords limit their review to eviction judgments rather than mere filings. Always document your screening criteria and apply them consistently to avoid discrimination claims.
What documentation can I require from applicants?
Standard documentation includes: photo ID, Social Security number or ITIN (for credit check purposes), employment verification (pay stubs, offer letter, employer contact), bank statements, tax returns for self-employed applicants, and references from prior landlords. For Section 8 applicants, the voucher and housing authority contact information are relevant. You cannot require documentation that disproportionately burdens protected classes (e.g., requiring certain types of ID that non-citizens cannot obtain).