How to Comply with TFCA's Sign-Posting Requirements
On March 2, 2010, New York City enacted the Tenant Fair Chance Act (TFCA). It places new disclosure requirements in connection with applications for renting apartments on owners and managers of buildings with six or more apartments.
According to the law, if an owner or manager uses a tenant screening service, he or she must disclose to a prospective tenant that: a tenant screening report will be obtained from a named screening service; there is a right to obtain a free copy of credit reports annually from each credit reporting agency; and there is a right to dispute any inaccuracies or incorrect information in the report with the agency issuing the report.
In the June 2010 Special Issue of the Insider, we discussed the “blacklisting” practices and the 2004 class-action lawsuit that led to this tenant protection law (“How to Comply with Federal and Local Disclosure Rules When Screening Applicants,” Special Issue, June 2010; available online at www.apartmentlawinsider.com). We also provided the required disclosure notice that is to be given to a prospective tenant. The notice is to be included in the application form immediately adjacent to the part of the application where personal information is requested. Or, if the application information is taken orally, the owner or manager has to give written copies of the required statement to the applicant.
The new law also requires owners to post a sign with the disclosure notices in their rental offices. At the time of the Special Issue, the city had not finalized the office sign requirements. Now, after conducting a public hearing and waiting a period to gather public comments, the Department of Consumer Affairs recently issued the final rule specifying the details of the sign. We will discuss the requirements of the tenant screening report signs and provide general tips on avoiding tenant screening problems.
The final rule specifies the information required to be listed on the sign, the order in which the information is presented, and the type size of the text. The final rule requires that clearly contrasting colors be used for the background and text to ensure that prospective tenants conducting transactions at your rental office will know the purpose of the sign. Also, the sign is to be hung at a place where it is visible to a prospective tenant who is seated while the transaction is conducted at your rental office.
Title. The words “NOTICE ABOUT TENANT SCREENING REPORTS” must be printed at the top of the sign in two-inch high capital letters. Also, the color of the title is to be different from the rest of the text in the sign.
List screening agencies. If a prospective tenant's application information will or may be used to obtain a tenant screening report, the sign must state in 24-point type as follows:
Tenant screening reports from consumer reporting agencies are sometimes used to assist owners in making rental decisions.
In regard to such reports (check the applicable box):
[ ] We do not use such reports.
[ ] We may use such reports by contacting the following: [Insert name and address of each consumer reporting agency
that may be contacted, and identify any that are a nationwide specialty consumer reporting agency here.]
Right to dispute accuracy. The last portion of the sign reminds the prospective tenant of his right to dispute any inaccuracies found in the tenant screening or credit report. The following is the exact language required by law:
The law requires us to notify you if we do not lease or rent to you based on information in that report. You also have the right to dispute the accuracy of the information in the report directly with the reporting agency and to obtain a free report from such agency if we do not lease or rent to you based on such report.
You also are entitled to receive one free report every 12 months from any nationwide specialty consumer reporting agency used by us, as well as a free credit report every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion. You can request this free credit report through the website www.annualcreditreport.com. You may dispute the accuracy of any information about you that is contained in such report directly with the credit reporting agency.
Employ Good Screening Principles
An owner should not use the TFCA as a cover for denying prospective residents for discriminatory reasons. “The new law does not take away common sense or good, nondiscriminatory tenant screening procedures,” says New York attorney Richard Walsh of Horing Welikson & Rosen P.C.
You are legally free to choose among prospective tenants as long as your decisions are based on legitimate business criteria. However, you should not make choices based on personal or discriminatory reasons or you may make yourself susceptible to a discrimination claim. In New York City, either federal or local fair housing laws prohibit discrimination on the basis of race, religion, national origin, gender, age, familial status, physical or mental disability, marital status, or sexual orientation.
You are entitled to reject applicants with bad credit histories, income that you reasonably regard as insufficient to pay the rent, or past behavior such as property damage or consistent late-rent payments that makes someone a bad risk. And you may legally refuse to rent to someone who can't come up with the security deposit or meet some other condition of the tenancy.
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