The onslaught of the coronavirus on the New York economy has been devastating for everyone. Nonessential businesses have closed in most states, and new unemployment application numbers are soaring. These economic situations may make it difficult for tenants to pay rent, but it also places a heavy burden on the landlords who rely on rental payments as a crucial source of income. In this article, the effect of the pandemic on the eviction of tenants will be outlined and the options at one’s disposal will be understood
The Background and The Eviction Procedure
Ordinarily, a landlord can evict a tenant for a variety of reasons, provided that the termination of the tenancy occurs before the eviction. However, cause is an essential requirement for a landlord who wants an early termination for a tenancy or who wants a tenant to move out before the rental term has expired.
The tenant can be evicted early for a couple of different reasons, including not paying rent or violating the lease or rental agreement The termination happens by way of a written notice given to the tenant by the landlord. Failure to comply leads to the landlord filing an eviction lawsuit with a court.
New York is a tenant-friendly state and requires the culmination of a tenancy to comply with highly specific regulations that are aimed at particular situations that arise. Depending upon the circumstances, different types of notices and procedures may be provided. Additionally, eviction regulations in New York depend upon whether the rental property is located within the boundaries of New York City or whether the property is rent-regulated as well. These factors are necessary to consider before entering into a tenant-landlord relationship.
So, What Exactly Happened?
The timeline of the changing laws implemented in the wake of COVID-19 can be tracked from March 16th, where the NY Chief Administrative Judge Lawrence Marks announced in a memo that eviction proceedings and pending orders in housing court were to be suspended statewide. Governor Andrew Cuomo later enacted a moratorium on eviction services that was initially supposed to last up to June 2020 but was then extended to August 20th, 2020. This extension came with a tapering of the categories of individuals who qualified under the order while also rescinding a part of the mandate.
Additionally, the federal CARES Act was signed into law on March 27, 2020. The Act provided enhanced Unemployment Insurance (UI) benefits and Pandemic Unemployment Assistance (PUA) for New Yorkers. This formed the overarching safety net that powers the Tenant Safe Harbour act, sponsored by Manhattan Sen. Brad Hoylman and Bronx Assemblymember, Jeffrey Dinowitz.
What the Safe Harbour Act is responsible for is to ensure that tenants cannot be evicted for neglecting to provide rent payments during the COVID-19 crisis. Initiated on March 7th, the Safe Harbour Act is held fast until all safety restrictions are lifted in the tenant county as long as the tenant can demonstrate they suffered from financial hardship.
How do the new rules apply to me?
The unemployment assistance offered to tenants is increased under the CARE Act. This includes but is not limited to the allotted cash payment as offered by the government. Temporary rent assistance or even one-time rent assistance may also be provided under the local governments. As of right now, the 120-day eviction moratorium and cessation of late fees under the CARE act provide the main relief for concerned tenants.
On a fundamental level, the Tenant Safe Harbour Act prohibits the courts from [A.] issuing a warrant of eviction or [B.] issuing a judgment of possession against a residential tenant or a lawful occupant. However, a condition that has to be fulfilled remains the sufferance of financial hardship by this tenant for the COVID-19 period.
Eviction thus is not an option during the COVID-19 period. However, landlords may still seek and be awarded money judgments for owed [and due] rent. Summary proceedings may be continued to seek these reparations so landlords can recuperate costs as per article 7 of the RPA law. While the Safe Harbour Act itself limits a significant number of tenants who may be considered eligible, landlords thus have a certain modicum of protection, even if it may not be absolutely effective.
Additionally, the modification to the General Obligations Law now provides that the money deposited as security or advanced on contract or license agreement is to be used to pay off the rent owed to the landlord as long as they both enter into a written agreement denoting consent for the same. Alongside, relief is to be provided to tenants or licensees in financial hardship upon request.
The corollary protection afforded to the landlords is the replenishment of the security deposit. This replenishment is to be done at a rate that is one-twelfth of the amount used as rent per month and the payment is to be done 90 days from the date of using the deposit.
What This Means
One of the hardest groups hit economically are the landlords who own individual or small units. Consequently, the provision of financial assistance to tenants is important, as the economic burden of the pandemic is felt across the divide. A significant portion of effort needs to be directed toward ensuring tenants can pay their rent in order to make certain that mortgage costs and traditional maintenance costs can be borne by the landlords.
Additionally, the CARE Act moratorium neither applies to every residential landlord nor decrees that tenants need not pay their rent. The CARES Act merely accrues the rent to be paid during the pandemic, and the stoppered rent once accumulated cannot be enough to prevent a full-blown eviction crisis.
Maintaining affordable housing seems almost impossible in the wake of unemployment and layoffs while also requiring landlords to draw on their own savings. The eviction moratoriums imposed by their local governments will have an issue in recouping the losses upon restoration to normalcy.
The eviction moratorium provided blanket protection until the changes enacted by Cuomo provided some relief to the individual landlord. However, holdover cases have not been addressed within this directive. Considering that a holdover case is brought to evict a tenant or a person in the apartment who is not a tenant for reasons other than simple non-payment of rent, often for endangering tenants or fostering more individuals than in the lease agreement, the lack of address in the extension is worrying. Furthermore, the impact of the changes may also be felt on individuals who struggle with documenting their income adequately.
Clearly, if New York is to bounce back from this pandemic without spiraling into uncertainty and further housing misunderstanding, the issues in the current safety net need to be addressed. The balance struck between tenant and landlord at this point is fragile and needs all the protection it can get on both sides.
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1. NY Governor Executive Order 202.48 (2020)
2. Coronavirus Aid, Relief, and Economic Security Act Pub.L. 116–136
3. Tenant Safe Harbor Act (S. 8192B (Hoylman)/A. 10290B (Dinowitz))
4. NY Real Prop Actions L § 711 (2015)
5. NY GEN OBLIG § 7-103; NY GEN OBLIG § 7-107; NY GEN OBLIG § 7-108.
6. The detailed provisions of executive order No. 202.28 was released by Andrew Cuomo on May 7th, 2020