Lawmakers Propose Change to Homeowner Credit Checks | News, Sports, Jobs
A Long Island lawmaker wants to limit what can be considered a landlord’s credit check when considering new tenants.
Deputy Michaelle Solages, D-Valley Stream, wants to prohibit landlords from refusing to rent or rent a property to a potential tenant based on the tenant’s credit score or consumer credit history as long as the tenant can fulfill one of the conditions. Owners who break the law would be liable for a civil judgment between $500 and $1,000.
“As New Yorkers continue to struggle with the effects of the COVID-19 pandemic, finding and maintaining affordable housing has been a difficult challenge. A low credit score, perhaps due to the difficulties of the pandemic, is a barrier for many tenants to access new housing,” Solages wrote in his legislative rationale.
Solages wrote that the number of tenants in arrears had doubled between 2017 and 2021. In 2021, the amount of tenants in debt increased from 12% in May to 21% in June, an increase of 9% in one month. She pointed to medical debt and credit card debt as issues for many renters, especially black and Hispanic families.
A. 10676 would prohibit denying a tenant based on a credit check if a tenant could prove that they had made full payment of rent within five days of the due date for one year prior to submission of rent. a rental request. Credit checks would also not be a reason to turn a tenant away if the tenant’s rent is paid through a government grant given directly to the landlord, if the tenant’s credit history shows defaults or collections due solely to medical or student debt, or if credit problems are the result of domestic violence, dating violence, sexual assault, or harassment.
Landlords who refuse a tenant based on their history or credit score would be required to notify the potential tenant in writing and give the applicant tenant the opportunity to show that they meet one of the conditions for triggering the invoice.
“With so many marginalized communities struggling to make ends meet during unprecedented times, a poor credit score is not uncommon and is not a clear indicator of a potential tenant’s financial health. Instead, credit checks that prevent potential tenants from accessing housing, especially affordable housing, only serve as an obstacle to a basic human right,” writes Solages.
A similar bill had been proposed in California by Congresswoman Sharon Quirk-Silva, D-Fullerton. This bill would have prohibited landlords from asking questions about anything included in a report, such as payment history or evictions. The legislation faced opposition from the California Apartment Association and was withdrawn from consideration earlier this year.
The association wrote that credit reports are used for home loans, car loans, bank loans, utilities, cell phone providers and credit card providers to qualify individuals for services or a funding.
“The analysis of a credit report is not about determining whether a person has a high income or a low income”, Debra Carlson, CAA’s executive vice president of public affairs and compliance, wrote in a letter to Quirk-Silva. “It shows how an individual has managed their debt in the past. It demonstrates the level of risk the individual poses to a borrower or rental property owner. If a person is accustomed to making payments on time and managing debt responsibly, they are likely to have good credit. A rental landlord must rely on rent money to pay for their own mortgage, insurance, taxes, maintenance, etc., and many small landlords rely on rental payments as part of their retirement income. You are putting these landlords at risk with AB 2527. With the COVID-19 pandemic, the past two years have been extremely difficult, and AB 2527 will serve as the final “straw” for many landlords to get their rental units off the market. .”