Legally Speaking: Don’t Check Your Prospective Tenant’s Eviction History
A new residential rental law exposes landlords to suit for checking their prospective tenant’s eviction history. This new law provides, at Real Property Law §227-f, that “[n]o landlord of a residential premises shall refuse to rent or offer a lease to a potential tenant on the basis that the potential tenant was involved in a past or pending landlord tenant action or summary proceeding…” In fact, the law contains a rebuttable presumption that a violation has occurred, which presumption arises when a landlord requests such “information from a tenant screening bureau… or otherwise inspect[s] court records.” Furthermore, the law expressly authorizes the attorney general to prosecute landlords for violations of the law and provides for statutory penalties to be recovered against violating landlords. Landlords—don’t check your prospective tenant’s eviction history if you don’t want to get sued by the attorney general.
While it is clear that landlords shouldn’t check their prospective tenant’s eviction history if they don’t want to get sued under the new law, can a landlord outsource the screening job and require their real estate broker to check the history for them? Yes, it’s true that the law doesn’t expressly include the term “real estate broker.” A quick reading of the law may lead a clever landlord to think that they can circumvent the law by directing their real estate broker to screen the tenant for them. This is a terrible idea. In fact, the law expressly authorizes the attorney general to prosecute a landlord if their “agent or employee” violates the law. A real estate broker is an agent of the landlord, as expressly set forth throughout Article 12-A of the Real Property Law.
Directing a real estate broker to screen the tenant creates exposure beyond the inclusion of the term “agent” in the authorization of the attorney general to prosecute under the new law. A landlord is also exposed for the acts of their real estate broker in checking a prospective tenant’s eviction history under basic agency law. In agency law, a landlord who hires a real estate broker is categorized as the principal whereas the real estate broker is categorized as the agent. Under agency law, and more specifically, the Doctrine of Respondeat Superior, when an agent violates the law, the principal is exposed to suit for such violation. So when a real estate broker violates the law on screening for evictions, the landlord becomes exposed to a lawsuit. Therefore, a landlord should not ask their real estate broker to screen prospective tenants for them. In fact, a landlord should do just the opposite and confirm that their real estate broker will not be checking the tenant’s eviction history via a letter expressly prohibiting the screening.
The reason that a landlord should utilize a written CYA letter goes back to the term “agent.” Under the Doctrine of Respondeat Superior, an agent only causes their principal to be liable for their acts when such agent acts within the scope of their agency. By expressly limiting the scope of the agency, the landlord is protecting themselves from an overzealous or ill-informed real estate broker.
Overzealous or ill-informed real estate brokers should get up to speed with the new law quickly. Regardless of the landlord limiting the scope of the agency, if a real estate broker screens the tenant and therefore exposes the landlord to suit, the landlord can, in turn, sue the real estate broker for a breach of fiduciary duties. Additionally, the landlord can report the real estate broker to the police and district attorney because screening for prior evictions may rise to the level of unlicensed engagement in the business of a private investigator, which is a misdemeanor pursuant to Article 7 of the General Business Law. As you can see, it’s a good thing to know a little something called the law.
Andrew M. Lieb, Esq., MPH, is the managing attorney of Lieb at Law P.C. and a contributing writer for Behind the Hedges.