On November 20, 2024, the Honorable Angel Kelley of the United States District Court of Massachusetts issued a Final Approval Order for a $2.275 million settlement involving SafeRent Solutions, LLC ("SafeRent"). In the lawsuit, it was alleged that SafeRent's tenant-screening algorithm was used to evaluate rental applicants where it disproportionately disadvantaged housing voucher recipients, particularly Black and Hispanic applicants. 

Under the settlement, SafeRent committed to:

• No longer use unvalidated scoring models for applicants with housing vouchers unless validated by organizations like the National Fair Housing Alliance.
• Educate landlords on the differences between its scoring models and the implications for housing voucher applicants.

In addition, SafeRent will pay $1.175 million into a settlement fund for affected applicants and $1.1 million for attorneys’ fees. Moreover, landlords using SafeRent’s screening products must certify whether applicants are housing voucher recipients. If certification isn’t provided, tenant-screening scores will be excluded.

For those using tenant-screening services, this case highlights the risks of relying on AI-driven tools without thoroughly understanding or auditing the impact of these tools. Algorithms that inadvertently reinforce biases, whether based on income, race, or other protected characteristics, could lead to significant legal and financial liabilities under the Fair Housing Act and state and local anti-discrimination laws.

Landlords and PropTech should conduct regular audits by trusted third-party validators to avoid discrimination as technology rapidly emerges in this field.

Landlords and PropTech should take this case as motivation to review your screening process, including:

• Do your tools account for biases in their data or design?
• Are they validated for compliance with anti-discrimination laws?
• Are you confident they don’t inadvertently exclude protected groups?

As SafeRent’s case demonstrates, the stakes are high. It’s not just about avoiding lawsuits, it’s about ensuring equitable access to housing and fostering trust in the rental process. Invest in a third-party audit of the AI tools you use, update your policies, and ensure your practices align with Federal, State, and Local fair housing laws. 

Additional protections in Housing Court are being enforced in order to aid self-represented parties. When opposing parties come to an agreement during a proceeding, they sign a Stipulation of Settlement ("Stipulation"), which is a binding agreement, so it is the judge's responsibility to ensure that the parties understand the Stipulation. 

Bill A3320A relates to stipulations in summary proceedings to recover possession of real property. Moving forward, a stipulation will not be approved by the court unless the court first verifies the following:

• All parties have been accurately and appropriately named;
• The authority of the signatory if a named party is not present;
• The unrepresented party understands he may try the case if he does not agree with the stipulation;
• An opposing party's attorney did not inappropriately give advice to the unrepresented party;
• Whether or not the unrepresented party agrees or contests any allegations in the petition or predicate notices;
• The unrepresented party understands the claims and defenses available to him and what his options may be in light of the claims and defenses, and, that the claims and defenses are adequately addressed in the stipulation;
• The unrepresented party agrees to the terms in the stipulation;
• The unrepresented party understands the consequences of either party's non-compliance with the stipulation; and
• An appropriate rent breakdown is included, if applicable. 

Starting on October 12, 2021, discrimination cases before the New York State Division of Human Rights (DHR) are no longer permitted to conclude with a private settlement. 

Instead, if settlement is achieved, DHR is now requiring "complainant’s attorney [] to state in writing why they are seeking a discontinuance and, if the reason is private settlement, the discontinuance will not be granted." Rather, "the matter [will be resolved] through an Order after stipulation that indicates the terms of the settlement or to proceed through the agency’s public hearing process." 

The purpose of this new rule, according to DHR, is "to ensure that the terms of any settlement comply with our basic standards and do not violate public policy."

Further, given that three-quarters of discrimination cases result in settlement, DHR will be able to collect better data of what is happening in resolving these disputes by monitoring settlements. Hopefully, DHR will actively compile this data and inform the public of their findings so that litigants can make smart, informed decisions, when settling cases into the future. 

According to the EEOC, they pay $45,466 to settle cases in conciliation before lawsuit (it only goes up from there).