Tenant Blacklists, Credit Reports and Debt Collection

TENANT BLACKLIST AND TENANT SCREENING COMPANIES
Tenant blacklisting is the term applied to the practice of landlords who screen prospective tenants and refuse to rent to those who have been brought to Housing Court in the past. Hundreds of thousands of tenants are brought to Housing Court in NYC by landlords in eviction cases every year. The information that a case was filed against a tenant is in the court’s records. The Office of Court Administration compiles and sells these court records to tenant screening agencies, who then sell the data on the open market. The data is purchased by management companies and owners to screen out undesirable tenants – tenants who are on the “tenant blacklist.” The reason for the eviction case does not matter. These reports from the tenant screening companies are not the same as a traditional credit report. A traditional credit report is one which is produced by TransUnion, Equifax or Experien and lists a credit score.  See our organization’s brief information sheet on the topic here.

Changes and Reforms
Since the practice started years ago, a couple of reforms have been won. As a result of pressure from advocates and public officials, the Office of Court Administration no longer sells information on cases that were never calendared — these are cases for which the landlord purchased an index number but then never filed the papers to get the case on the calendar. OCA has also stopped including the addresses with the names of the respondents in court cases. This means that tenant screening companies only get the names of the tenants in the cases and must look up each case to determine where the tenant lived when the case was brought.

Class Action Lawsuit
In 2007, there was a settlement in a class action suit (White v First American Registry/Safe Rent) brought by tenants against a screening company. In the settlement, the screening company agreed to provide money to those who were harmed and agreed to stop sloppy practices that had lead to tenants’ screening reports being inaccurate. In the White case, the report indicated that the case was pending, when it had in fact been dismissed.

Tenant Fair Chance Act

As of February 2010, the City Council passed legislation that requires management companies, broker’s offices or Landlords who are renting an apartment in a building with more than 5 units are required to notify prospective tenants of whether or not they use tenant screening reports.  The law mandates that these companies or groups post visibly in their officesthe name of the tenant screening bureau used and the address of that company.  If the management company/ landlord or brokers use written applications, they must include in writing 1) whether or not they use a tenant screening report, 2) if so, what company they use, and 3) how to contact that office so that a tenant can request a free annual copy of their report.  With this information, a tenant can obtain a copy of their report and attempt to clear up any erroneous information on their record before applying for future housing.  You can find a copy of the Tenant Fair Chance Act here.

What to do
If a prospective landlord denies you an apartment based on information from tenant screening companies, that landlord is required to give you a letter (called an adverse action letter) stating the reason for the denial and the name of the company used. You can then contact that company and ask for a copy of your report – the company is required by the federal Fair Credit Reporting Act to supply you with a copy.

Once you get the copy of the screening report, look at it to see if the listing is a mistake (for example, you are John Doe who used to live at 560 Ditmars Blvd and they have listed a John Doe at 506 Flatbush Ave). If so you must write to the screening company and ask that they correct the mistake. If the report is not complete or accurate, you can also write and ask that the report reflect what happened in the case. The screening company has 30 days to comply under the federal law. Housing Court cases can appear for seven years after the case was filed.

You can use the model stipulation if you want to settle a Housing Court case (a current case or an old case that is still in the system) in a way that allows you to avoid the blacklist. You must have the landlord’s agreement. Once you have this stipulation signed and filed with the court, you can notify the tenant screening bureaus of its existence and ask that they remove your name from their lists. Use this sample letter to notify the companies of your stipulation.

Where to go for help
If you need help with a tenant screening report because you have been “blacklisted” and can’t get a new apartment, or you want to avoid it in the future and you have a current or upcoming Housing Court case, you should talk to an attorney. If you plan to hire a private attorney, chose one with experience and success on blacklisting issues. You can also contact us for information about the blacklist or a referral to free assistance.

JUDGMENTS & CREDIT REPORTS
Judgments and Credit Reporting
If you are a tenant and your landlord has sued you for back rent in Housing Court, and you had a judgment entered against you, chances are that judgment is on your credit report. By credit report we mean the reports created by the big credit reporting companies, Transunion, Equifax or Experien. Most Housing Court eviction cases are settled by stipulation and in most stipulations, the tenant consents to a judgment. Those judgments are immediately entered into the court’s records where it can be retrieved by credit reporting agencies. Having a judgment on your credit report will lower your credit score and can make it difficult and more expensive to borrow money for a car, a house or for education. Most eviction cases do not result in the actual removal of the tenant. In most cases, the tenant pays the back rent owed and gets to stay in the apartment. By law, landlords must file a satisfaction of judgment within 10 days of receiving the money from the tenant. However, most landlords do not do this.

If you want to get a judgment removed from your credit report, you must get it vacated in Housing Court. To do this, you must go to Housing Court, do an order to show cause to restore the case to the calendar, and ask the judge to vacate the judgment. If you no longer live in the apartment your case will be heard in Civil Court. However, you still file the order to show cause in the clerk’s office of Housing Court.

To avoid judgments appearing on credit reports in the future, tenants should try to get one of the following:

  1. A stipulation that does not include a judgment. The stipulation can state that the tenant will pay the rent by a certain date, and that the case will be restored to the calendar if the payment is not made.
  2. If the landlord won’t do a stipulation without a judgment, tenants should get the following language written into their stipulations: upon payment, judgment will be vacated. This way, if the money is paid and the judgment is not vacated, the tenant can restore the case to the calendar by order to show cause, and using the stipulation as evidence, ask the judge to vacate the judgment.

DEBT COLLECTION

Many tenants and landlords get behind on rent or mortgage payments because they pay off other debts after being pursued by aggressive debt collectors. Be aware that when applying for assistance with rent or mortgage arrears from charities or government sources, you must have a good reason for getting behind and the payment of credit card or other consumer debt is not usually considered a good reason. Tenants and mortgage holders are expected to use income to pay rent, mortgage payments and utilities first before paying other expenses like credit card bills.

For help in coping with debt collectors, visit the website of the Neighborhood Economic Development and Advocacy Project, or NEDAP. Or call their Financial Justice Hotline at 212-925-4929.