When Adam White first moved into his studio on the top floor of an Upper East Side walkup in 1993, he was a newly minted lawyer and thrilled to have found an affordable bachelor pad. It wasn’t until the rainy season that White realized his apartment had a serious defect. Often after rain or snow, his entire ceiling would become saturated with sour, yellowish water that would stream into his living room, stain the walls and cause the plaster to buckle.
For four years, White complained to his landlord and begged to have the roof repaired. Occasionally the landlord would send workers to do cheap patch-and-paint jobs, but the problem persisted. White finally decided to withhold his rent.
The landlord responded by quickly filing a nonpayment suit, but then just as quickly agreed to negotiate a settlement. White’s roof was repaired, he won a small rent abatement and the case was dismissed without his ever going to court. Little did White know, five years later this victory would cost him his dream home.
In 2001, after their son Jonah was born, White and his longtime girlfriend, Judy, started hunting for a larger home. After nearly nine months on waiting lists, a rent-stabilized two-bedroom on Eastern Parkway opened up that could be theirs if they passed the screening. A few days later, the management company called to say the application had been rejected.
“I have stellar credit,” said White recently, “but they said my name was on a list showing that my landlord sued me in 1997.” White barely even remembered a suit had been filed. “I was blindsided. I tried to explain that we resolved it without going to court. I begged and pleaded, but it was done.”
White’s name had appeared on a list of New York City Housing Court defendants, one of many lists now sold by private tenant screening companies across the country. In addition to performing credit and criminal checks on prospective renters, it is increasingly common for companies to report if someone was named in an eviction proceeding.
Around 300,000 nonpayment cases are filed in New York City every year, and screening companies can report cases going back seven years, so a register of local eviction cases could contain as many as two million names, less the duplicates. Most people on these lists have no idea that such registries even exist and only find out when a landlord refuses to rent to them.
Many aren’t actually problem tenants. Some, like White, withheld rent for legitimate reasons. Some are listed by clerical error. Some are victims of owners trying to harass them out of valuable units.
White is now one of two named plaintiffs in a class-action lawsuit expected to be filed at the end of January against First American Registry, the screening company that performed White’s background check. James Fishman, the attorney filing the suit, says the lists violate provisions in the Fair Credit Reporting Act requiring personal credit information to be accurate and complete.
“The crux of what’s wrong with this picture is that companies only sell the fact that a case was filed,” says Fishman. “We claim it is illegal that they are not reporting the outcome of these cases.”
First American Registry, a Maryland-based company, is the largest tenant screener in the nation, according to Senior Vice President Nevel DeHart, with 20,000 users and more than 33 million names in its eviction database. Since First American started collecting tenant records 20 years ago, an estimated two dozen big players and a thousand small local companies have emerged, turning tenant screening into a multimillion-dollar industry.
Companies gather the records–usually by buying them from state courts or hiring runners to comb through the actual records and watch court proceedings–and create a database of names. Landlords then pay $5 to $25 to check a prospective tenant, depending on how comprehensive a search they order.
No one knows how many landlords are using this service, but there is no question that the market is growing. Owners “are under competitive pressure to increase profit,” explains Barton Taylor, former president of the National Credit Reporting Association, a trade group. “Screening can help you make a property more profitable.”
Fishman acknowledges the business aspect. “If I were a landlord, I’d want to know something about the person I’m renting to,” he says. “But there’s a big difference between people who have been evicted properly and people who are swept up into this humongous system of court proceedings whether or not they did anything wrong.”
Many tenant advocates and attorneys share Fishman’s belief that if tenants are branded as undesirable simply for being named in a housing court case, then screening registries are in effect blacklists. Some fear that such lists will discourage tenants from reasonably withholding rent or organizing strikes against unscrupulous landlords.
Michael McKee, the assistant director of Tenants & Neighbors, a local nonprofit housing group, has already noticed greater reluctance by some tenants to push their cases aggressively. “I can tell you anecdotally that blacklisting is having a chilling effect on Housing Court claims,” McKee asserts. “We hear frequently: ‘If I do something I might end up on one of those lists.'”
To help tenants avoid such risks, some of their lawyers have switched tactics. Fishman, for instance, advises his clients to file in Small Claims Court rather than Housing Court, if possible, to keep their tenant records clean.
For tenant advocacy groups, however, telling tenants to avoid Housing Court doesn’t just limit immediate options, but also undermines their broader work. Rent holds and strikes are historically effective forms of protest; organizers fear losing the collective bargaining power needed to affect change. “Tenants have to be able to enforce their rights,” said Sandy Russo of Legal Services of New York, who helps trains hundreds of tenant lawyers each year. “I can’t tell them not to go to Housing Court because of something that might be held against them four years from now.”
Fishman hopes a class-action suit will force companies to provide more information about each case. But he worries that even with more complete data available, landlords may still opt to reject anyone on the list.
“The rental market is such that there’s 30 people for every vacancy for a decent apartment,” Fishman says, “so no landlord is going to waste their time listening to explanations.”
Landlord groups and reporting associations dispute that claim. Frank Ricci, director of governmental affairs for the Rent Stabilization Association, says the landlords he knows are far more forgiving. “I’ve spoken to plenty of landlords who get the report and if a tenant’s name is there, they go back and ask the tenant to explain what happened.”
Adam White is still waiting to find a landlord with a quality property who will listen to his explanation. Despite his excellent credit rating and stable job, he continues to carry a tainted tenant history into every real estate office and open house.
“I think I deserve to be compensated,” White says, “but that’s not why I’m in this lawsuit. I just don’t think you should have to either live in uninhabitable conditions or get blackballed down the road. You shouldn’t have to think twice about exerting your basic, fundamental right to a habitable living situation.”