That's because private companies are buying housing court records and selling them to landlords and management companies. The practice is similar to a credit check, except instead of the three credit rating agencies, there are hundreds of tenant screening companies, which makes it nearly impossible for tenants to clear their name on every list. Affordable housing advocates call it the “tenant blacklist” – a roster affecting hundreds of thousands of New Yorkers.
Each year 300,000 cases are filed in housing court. About 125,000 of them are put on the court calendar for formal action, according to Louise Seeley, executive director of Housing Court Answers, a program of the Citywide Taskforce on Housing Court. All those cases go into the databases of tenant screening companies, which rate prospective tenants for landlords. Seeley doesn't have data on just how many people are denied apartments each year because their prospective landlord doesn't want to rent to someone who was involved in court action – but she's seen enough instances to consider it a problem.
That's why she cheers a law recently adopted by City Council that makes it easier for tenants to find out who is selling their information. The Tenant Fair Chance Act is just one step, but Seeley hopes it will at least empower tenants to know what landlords are hearing about them – and enable them to correct any mistakes. Under the new law, which was signed by Mayor Bloomberg on March 2, landlords are required to tell prospective tenants whether they are using a tenant screening service, and to provide contact information for the tenant screening company so that tenants can clear records that are erroneous.
Manhattan City Councilman Daniel Garodnick introduced the legislation last year. “We want renters to know that there are reports out there that are being used to assess their chances of being a successful tenant,” said Garodnick. “Unfortunately, in too many occasions there is either bad information or people are denied apartments because they exercised their rights in court. We want renters to know that these reports are being used and how to correct them if necessary.”
Council doesn't have jurisdiction over what housing court does with its records, but Seeley said she would like to see legislation go even further. “I would like the court to stop selling the data. It won't stop the problem, but it would make it much more expensive" for landlords to screen tenants, she said. "The data is so misleading that it's very difficult to get a clear picture of the tenant's history."
But tenant screening has become a big business. As many as 500 companies operate throughout the country, said Jake Harrington, chief revenue officer of On-Site.com, one of the largest such firms. Last year On-Site provided 120,000 tenant screening reports to New York City landlords.
