Weekly Real Estate News
Summary
New York’s attorney general reached a $352,250 settlement with Brooklyn High Rise after finding the firm illegally used housing-court records to deny 203 rental applicants and failed to return deposits to hundreds of others. The agreement changes the firm’s screening practices and highlights state-specific compliance risks for landlords, brokers and property managers.
New York’s attorney general has reached a $352,250 settlement with a Brooklyn real estate firm after an investigation found the company illegally used housing-court histories to reject rental applicants and failed to return apartment deposits to hundreds of prospective tenants.
The Sept. 18 agreement with Brooklyn High Rise LLC is a pointed compliance warning for landlords, property managers and leasing brokers operating in New York. The state says the firm denied housing to 203 applicants based on prior landlord-tenant court records even though New York law has prohibited that practice since 2019.
Brooklyn High Rise must pay $202,250 in penalties and another $150,000 in restitution, according to the New York Attorney General’s Office.
Investigation focused on screening records
The attorney general opened its investigation in May 2025 after learning that Brooklyn High Rise continued requesting screening reports from a third-party vendor that included landlord-tenant court histories.
According to the state, the firm obtained court records for some prospective tenants between July 15, 2019, and Sept. 5, 2025. Investigators concluded that 203 applicants were unlawfully denied housing based on court history during that period.
New York’s Housing Stability and Tenant Protection Act changed the rules in 2019. Under the law, a landlord or property owner cannot deny a rental application because an applicant was previously involved in a landlord-tenant court case. When there is documented evidence that an owner obtained an applicant’s housing-court records and then rejected the application, the law creates a presumption that the denial was based on those records unless the owner can show otherwise.
The settlement goes beyond the conduct of one brokerage. The attorney general specifically advised landlords, owners, brokers and leasing agents to avoid requesting landlord-tenant court records and rental histories and to stop using screening bureaus that continue supplying those records.
‘Good faith’ deposits also drew scrutiny
The investigation also examined deposits Brooklyn High Rise charged applicants to hold apartments while applications were processed.
The state said applicants were charged between $500 and $750. Brooklyn High Rise represented that the money would be credited toward the first month’s rent if an applicant was approved or returned if the application was denied, but its website terms identified circumstances in which deposits might not be refunded.
According to the attorney general, an estimated 300 applicants who withdrew or were denied housing between January 2020 and December 2025 did not receive their deposits back.
The $150,000 restitution fund is intended for applicants who paid those deposits and either withdrew their applications or were denied without receiving a refund. Eligible applicants will be contacted by Brooklyn High Rise and may file claims for $500 or, in some cases, $750, the state said.
Settlement changes the company’s screening process
Brooklyn High Rise agreed to stop seeking applicants’ prior landlord-tenant court records. If an applicant voluntarily submits court-history paperwork, the company must direct the applicant to resubmit without it and assign a different leasing agent who has not seen the information.
The company must also remove questions involving court history and criminal background from its rental applications, publicly affirm compliance with New York tenant-blacklisting and anti-discrimination protections on its leasing platforms, and train staff on the applicable rules.
The attorney general reserved the right to pursue additional enforcement, including litigation, if Brooklyn High Rise violates the agreement or engages in tenant blacklisting again.
Why the case matters to housing professionals
Tenant-screening technology gives owners and brokers access to increasingly broad sets of applicant information. That makes the legal boundaries around what can be collected and used more consequential, particularly in jurisdictions where state or local law goes beyond federal screening requirements.
The New York action illustrates the risk of treating a third-party screening report as automatically permissible simply because the information is available. For landlords and brokers, the compliance question is not only whether a screening vendor can retrieve a record, but whether state law permits that record to influence a housing decision.
The deposit issue presents a separate operational risk. Holding fees and application deposits can trigger state-specific restrictions governing what may be charged, when money must be returned and how the terms are disclosed.
For real estate firms operating across multiple jurisdictions, the practical takeaway is that a uniform national screening workflow can create legal exposure when local rules differ. Applicant-screening criteria, third-party data feeds and deposit policies need to be reviewed against the law where the property is located, not simply against a companywide standard.
