Comply with Disclosure Rules When Screening Applicants

Choosing the right tenant is one of the most important decisions an owner can make. The right tenants pay their rent on time, don’t cause any legal problems, and keep their apartments in good condition. To choose the best tenant among applicants, an owner should rely on a thorough screening process that includes checking references, verifying employment, and obtaining credit and background reports.

Many owners gain access to this information by ordering screening reports. A tenant screening report is a type of consumer report that includes a person's housing court history. Screening companies will search housing court dockets to see if an applicant has been sued by a prior owner for nonpayment of rent, damage, or other issues.

This practice is the focus of a law called the Tenant Fair Chance Act (TFCA) that was signed by Mayor Bloomberg in 2010. The law imposes new requirements on top of those already required by the Federal Fair Credit Reporting Act (FCRA) on owners who use these screening services. The law requires any owner or manager who requests lease application information from a prospective tenant to disclose certain information. If the application information is requested in writing with an application form, for example, the disclosure notice must also be in writing. For an example of such a notice, click here.