New Philadelphia Law Aims to Increase Transparency in Rental Screening Process

On July 15, Mayor James Kenney signed into law Bill No. 210329 and Bill No. 210330, collectively known as The Renters’ Access Act (the act). The bills were introduced by Councilmember Kendra Brooks and co-sponsored by Councilmembers Bobby Henon, Jamie Gauthier, Helen Gym and Isaiah Thomas.

The new law is intended to increase transparency in the rental screening process and increase renters’ ability to access housing by regulating the criteria that landlords use when evaluating tenants and giving renters the ability to correct or clarify application information.

Bill No. 210329 amends Section 9-1108 of the Philadelphia Code titled “Fair Practices Ordinance: Protections Against Unlawful Discrimination.”

Section 9-1108(3) now requires landlords to provide a uniform written rental screening criteria before accepting applications for rental housing.

Under the new law, the uniform written rental screening must be provided in a manner that makes it readily available to all potential applicants, such as on a conspicuous place on a rental website or on the leased premises, if available.

The uniform written rental screening criteria must also specify all objective and subjective criteria that will be used to review rental applications, which may include the specific financial, criminal, rental history and any other criteria used in deciding whether to rent or lease to a prospective tenant.

The failure of landlords in Philadelphia to provide uniform written rental screening criteria may be considered evidence of an unlawful housing practice under the new law.

In addition, under the new law, landlords in Philadelphia may not reject an application for rental housing without providing the applicant a written or electronic document setting forth a plain statement of all reasons for the denial of the application, and which, to the extent permitted by the Fair Credit Reporting Act, 15 U.S.C. Section 1681, et. seq., includes a copy of any documents obtained from a third party for the purpose of establishing the applicant’s eligibility or otherwise deciding whether to rent the leased premises to the applicant, within three business days of the rejection. Failure to do so may be considered evidence of an unlawful housing practice under the new law.

However, the new law does provide some exceptions.

First, an application for rental housing will not be considered “rejected” under the new law unless the applicant was denied after consideration of the applicant’s specific eligibility and suitability for the rental housing or an applicable application fee was collected.

Second, any rental housing that is owned, operated, subsidized, or financed by a program of the federal, state, or local government, or which is otherwise governed by a deed restriction or indenture related to affordability of the rental housing, is exempt, provided that the rental of a particular rental housing unit will not be excluded from the new law because of a tenant-based subsidy.

Bill No. 210329 amends Chapter 9-800 of The Philadelphia Code, titled “Landlord and Tenant,” by adding a new Section 9-810, entitled “Prospective Tenant Screening Practices,” to regulate the application and selection process for rental housing and make technical changes to it.

Section 9-810(2) prohibits blanket eviction and credit exclusions.

Landlords in Philadelphia may not automatically decline to rent a housing unit to a prospective tenant solely because the prospective tenant has an eviction record or the prospective tenant’s credit score or tenant screening score derived, in whole or in part, from a tenant screening report falls below a specific numerical threshold.

In response to the detrimental impact of the pandemic on renters, the new law prohibits landlords in Philadelphia from denying an applicant based in whole, or in part, on credit information or credit report, tenant screening report, or any other consumer report demonstrating a failure to pay rent or utility bills during COVID-19 emergency periods.

In addition, landlords in Philadelphia are not permitted to reject an applicant as a result of the following events in an eviction history or eviction record:

• any eviction proceeding pursuant to Pennsylvania law or other equivalents in other states, that did not result in a judgment in favor of the plaintiff; or
• any sealed record of an eviction proceeding; or
• any eviction judgment against the applicant that has been vacated or marked satisfied pursuant to Pennsylvania law; or
• any eviction case filed, or eviction judgment that was entered, 4 or more years before the application to rent was submitted;
• an eviction proceeding brought against the applicant during the Covid-19 emergency period, other than an eviction based on violent or dangerous criminal activity that resulted in a judgment against the tenant; or
• any eviction proceeding where a judgment by agreement is currently in place, or where the judgment by agreement has been marked satisfied or vacated or is otherwise resolved.

The new law also provides eligible prospective tenants with the opportunity to dispute or request reconsideration of their application denial within 48 hours after receiving the denial.

Under the new law, if the prospective tenant provides timely notice of their intent to dispute or request reconsideration of the denial, the prospective tenant may provide within seven business days any evidence that information relied upon by the landlord was inaccurate or incorrectly attributed to the prospective tenant or was based on prohibited screening criteria.

Prospective tenants in Philadelphia may also provide any evidence of mitigating circumstances relating to the grounds for denial to establish whether the applicant shows a readiness to satisfy the obligations of tenancy.

For example, prospective tenants in Philadelphia may provide:

• a history of on-time rental payments that otherwise may not appear in a background check;
• that a prior eviction of the prospective tenant based on nonpayment of rent was based, in whole or in part, on rent not owed by the prospective tenant;
• new or increased income of the prospective tenant that is reliable and sufficient to cover rental costs;
• letters of recommendation provided on behalf of the prospective tenant by employers or former housing providers; and
• changes in circumstances that would make prior lease violations by the prospective tenant less likely to reoccur.

Under the law, if a prospective tenant in Philadelphia disputes the information or seeks reconsideration but the prospective landlord already rented the housing unit to another tenant, the landlord must offer to rent the next available comparable housing unit to the rejected prospective tenant.

This opportunity is only available to a prospective tenant if the prospective landlord owns five or more dwelling units within the city of Philadelphia and the rental application demonstrates the qualifications and ability of the prospective tenant to satisfy the obligations of the tenancy.

— Clementa Amazan, an associate at Nochumson P.C., is the co-author of this article.

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