The Fair Chance in Housing Law-What Landlords and Realtors Should Know.
Edward W. Purcell, Esq.
On June 18, 2021 Governor Murphy signed P.L. 2021, c. 110 (“Chapter 110”), also known as the “Fair Chance in Housing Law.” Chapter 110 gives rights to certain persons with criminal backgrounds with respect to their housing opportunities. Put simply, the law was enacted to help secure better housing for New Jersey residents with criminal backgrounds that may otherwise not be able to obtain adequate housing. While the intent of the law is laudable, it greatly changes the landscape for realtors and landlords with respect to how they evaluate tenants for residential rental units. Chapter 110 puts strict procedural and substantive limits regarding the types of information that “housing providers” can request of applicants with respect to their criminal backgrounds. The law also provides some limited immunity provisions to help encourage landlords to rent apartments to people with criminal backgrounds. The law goes into effect on January 1, 2022, and all realtors and residential landlords must understand its requirements to avoid potential penalties.
As an initial matter, the law defines “housing provider” as:
a landlord, an owner, lessor, sublessor, assignee, or their agent, or other persons receiving or entitled to receive rents or benefits for the use or occupancy of any rental dwelling unit.
Thus, the Chapter 110 will apply to traditional landlords, as well as realtors. However, the law specifically does not apply to the renting of owner-occupied premises of not more than four dwelling units.
The law calls for a two-step analysis with respect to residential leasing. First, a housing provider is prohibited from requesting any type of criminal background information prior to issuing a “provisional offer.” However, inquiries at this stage are permitted with respect to whether or not the applicant has “ever been convicted of drug related criminal activity for the manufacture or production of methamphetamine on the premises of federally assisted housing and whether the applicant is subject to a lifetime registration requirement under a state sex offender registration program.” Second, after a provisional offer has been transmitted to an applicant—it can only be revoked for certain limited reasons.
After a provisional offer has been issued, only then can a housing provider evaluate the applicant with respect to criminal records that:
1) resulted in the conviction of murder, aggravated sexual assault, kidnapping, arson, human trafficking, sexual assault in violation of N.J.S.2C:14-2, causing or permitting a child to engage in a prohibited sexual act or in any simulation of such an act in violation of paragraph (3) of subsection (b) N.J.S.C.2C:24-4 or any crime that resulted in lifetime registration in a state sex offender registry;
2) is for an indictable offense of the second or third degree, or if the conviction resulted in a prison sentence, that sentence concluded within the six years immediately preceding the issuance of a conditional offer
3) is for an indictable offense of the first degree that was issued, or if the conviction resulted in a prison sentence, that sentence concluded within the four years immediately preceding the issuance of the conditional offer; or
(4) is for an indictable offense of the fourth degree that was issued, or if the conviction resulted in a prison sentence, that sentence concluded within one year immediately preceding the issuance of the conditional offer.
While a housing provider can only review and consider the above records subsequent to providing a provisional offer, such an offer can only be withdrawn “if the housing provider determines, by preponderance of the evidence, that the withdrawal is necessary to fulfill a substantial, legitimate and non-discriminatory interest.” Chapter 110 requires that housing providers conduct an individual assessment for each applicant – weighing various statutory factors having to do with the nature of the offense, the applicant’s age at the time of same and the “degree to which the criminal offense, if it reoccurred, would negatively impact the safety of the housing provider’s other tenants or property.” A provisional offer withdrawal must be communicated to the applicant in writing and specifically state the basis for same. Chapter 100 also provides that an applicant can request, within thirty (30) days of the withdrawal of the provisional offer, that the housing provider provide a copy of “all information relied upon… in considering the applicant, including criminal records.”
There are some other important requirements in Chapter 110. The law prohibits a housing provider from requiring a “drug or alcohol test, or request[ing] information from a drug abuse treatment facility.” It also prohibits a housing provider from publishing an advertisement explicitly stating that those who have been arrested or convicted of criminal offenses will not be considered as tenants. Having said that, the law does permit a housing provider to publish an advertisement stating applicants will not be considered if they have been “convicted of drug related criminal activity for the manufacture or production of methamphetamine on the premises of federally assisted housing and whether the applicant is subject to a lifetime registration requirement under a state sex offender registration program.”
Chapter 110 is not all sticks—there is at least one carrot for landlords who rent their apartments to persons with criminal backgrounds. The law grants immunity to residential landlords “from liability in any civil action arising as a result of the landlord’s decision to rent to individuals with a criminal record or who were otherwise convicted of a criminal offense, or as a result of the landlord’s decision to not engage in a criminal background check.” However, the law explicitly does not shield residential landlords from civil liability where:
a landlord … rents an apartment to a person with a conviction for murder, aggravated sexual assault, kidnapping, arson, human trafficking, sexual assault in violation of N.J.S.2C:14-2, causing or permitting a child to engage in a prohibited sexual act or in the simulation of such an act in violation of paragraph (3) of subsection 33 b. of N.J.S.2C:24-4, or any crime that resulted in lifetime registration in a state sex offender registry.
Thus, while the law does provide some immunity to residential landlords, there are limits with respect to certain types of individuals with criminal backgrounds. This provision of Chapter 110 also uses different terms from the balance of the law. With respect to immunity, for instance, same is granted to “residential landlords” and not the broader category of “housing providers.” Furthermore, immunity appears to only apply to the renting of “apartments” and not other types of residential housing. It may be that this section of the law was poorly drafted. However, it is more likely that these words were used intentionally to narrow the scope of who would receive civil immunity.
Chapter 110 is enforced by the Director of the Division of Civil Rights. Fines for violating the law vary from $1,000.00 to 10,000.00 – depending on the number of violations over certain spans of time. The Division may also require a housing provider to provide compliance reports to the Director for up to two (2) years following a violation. A housing provider may appeal an adverse decision to the Appellate Division of the Superior Court.
Prior to January 1, 2022, real estate agents and landlords should become aware of what this law does and how their operations must change. If they don’t—they may find themselves looking down the barrel of an enforcement action by the Division of Civil Rights—not something to be taken lightly.
Edward Purcell is an Associate of the Firm and can be emailed by clicking EPurcell@pricemeese.com.
