Industry Update: Commons West LLC – Anti-Discrimination Section 8 Decision - Third Judicial Department

On March 5, 2026, the Appellate Division, Third Judicial Department affirmed a declaration by the Supreme Court (entered in Tompkins County) that Executive Law § 296(5)(a)(1) — the New York State Human Rights Law’s “source-of-income” antidiscrimination law — is unconstitutional on its face because it, in effect, requires landlords to take part in the section 8 program, which in turn obligates landlords to consent to warrantless searches of their premises and records, in violation of the Fourth and Fourteenth Amendment of the United States Constitution (Matter of People of the State of N.Y. v Commons West, LLC, 2026 NY Slip Op 01253 [3d Dept 2026]).

 

Executive Law § 296(5)(a)(1), prohibits “an owner, landlord, managing agent, or other person having the right to sell, rent, or lease a housing accommodation…[t]o refuse to sell, rent, lease or otherwise to deny to or withhold from any person or group of persons such a housing accommodation because…of the race, creed, color, national origin, citizenship or immigration status, sexual orientation, gender identity or expression, military status, sex, age, disability, marital status, status as a victim of domestic violence, lawful source of income or familial status of such person or persons, or to represent that any housing accommodation or land is not available for inspection, sale, rental or lease when in fact it is so available” (emphasis supplied).

 

Executive Law § 292(36) defines “lawful source of income” to “include, but not be limited to, child support, alimony, foster care subsidies, income derived from social security, or any form of federal, state, or local public assistance or housing assistance including, but not limited to, section 8 vouchers, or any other form of housing assistance payment or credit whether or not such income or credit is paid or attributed directly to a landlord, and any other forms of lawful income” (emphasis supplied).

 

The decision in Commons West only applies to the constitutionality of the Executive Law’s inclusion of refusal to participate in the section 8 program as a discriminatory housing practice. The Third Department agreed that, “although the source-of-income discrimination law does not, itself, require any searches, they are indirectly compelled through the terms of the Section 8 program and the HAP contract, which obligate landlords to make their premises and records available for searches.” The HAP contract required by the Section 8 program states that the owner “must” provide pertinent information, “must” grant access to electronic records and “shall” afford the PHA and other entities “full and free access” to its premises and records.

 

As such, the Third Department held that:

 

“Supreme Court properly…declared the source-of-income provision in Executive Law § 296(5)(a)(1) facially unconstitutional to the extent that it makes it an unlawful discriminatory practice to refuse to rent or lease housing accommodations to any person, or group of persons, because their source of income includes Section 8 vouchers”

 

(Matter of People of the State of N.Y. v Commons West, LLC, 2026 NY Slip Op 01253 [3d Dept 2026]).

 

While, generally, a decision in the Third Department is only persuasive authority in the First and Second Departments, the State and its Attorney General were parties to the Commons West case. Arguably, the decision may have the effect of invalidating Executive Law § 296(5)(a)(1) on constitutional grounds, as it pertains to section 8 subsidies statewide. However, the decision did not rule on the constitutionality of Executive Law § 296(5)(a)(1) to the extent that it makes it an unlawful discriminatory practice to refuse to rent or lease a housing accommodation to an individual because their income includes a “lawful source of income” other than a section 8 subsidy.

 

The New York City Human Rights Law (NYC Admin Code § 8-107) creates an independent cause of action for source of income discrimination applicable to New York City and its outer boroughs. The City law, nearly identical in scope, was enacted pursuant to the State’s Municipal Law, and ratified by the State’s Executive Law section 8 source of income provision. It is expected that the New York City Human Rights Commission will take the position that it is not bound by the Third Department’s decision, but there may be a basis to challenge the City Law as preempted by the same.

 

If you have questions about this decision, please reach out to your trusted R&E attorney, Cori A. Rosen, the Head of the firm’s Human Rights Practice, or Ethan R. Cohen, the Head of the firm’s Appellate Litigation Department, who authored the above industry alert.