On June 30, 2020 Governor Cuomo signed into law Senate bill S8192B and expanded the protections granted to struggling residential tenants during the coronavirus pandemic. The Tenant Safe Harbor Act provides protection from eviction for renters who have experienced financial hardship during the COVID-19 emergency. The bill prohibits courts from evicting residential tenants who experienced financial hardship for non-payment of rent that accrues or becomes due during the pandemic.
Under previous Executive Orders issued by Governor Cuomo [1], tenants were afforded a 90-day moratorium where landlords could not evict tenants for non-payment of rent due to COVID-19 related financial hardship. Although the orders provided tenants with protection, it did not shield them from the risk of eviction after the restricted period. The fallout would include court dockets flooded with several hundred eviction orders once the moratorium ended in August. Without any assistance, residential tenants— recovering from job losses in a down market along with the related financial issues—would be confronted with the prospect of losing their homes. The Tenant Safe Harbor Act would prevent a court from using unpaid rent that accrued during the COVID-19 period as the basis for eviction of a financially burdened tenant; however, a court could impose a money judgment against the tenant.
However, the bill only applies to tenants who are facing financial hardship due to the pandemic and the renter must show that their failure to pay rent is directly related to COVID-19. A tenant who fails to pay rent for some other reason is not protected and may be subject to any legal remedies available to the landlord. This is a critical distinction that tenants should be aware of, as the new law does not constitute a rent waiver for those outside of the defined class or who withhold rent in bad-faith.
The law applies to any unpaid rent accrued between March 7 and the yet-to-be-determined date on which all COVID-19 related restrictions on non-essential gatherings and businesses are lifted. The new bill can be found here: https://www.nysenate.gov//legislation/bills/2019/S8192
In the coming months, it will be interesting to see how state lawmakers address the issue of evictions once COVID-19 protections have expired. Tenants and related supporters have been vocal about the need of some type of reform related to the rights of renters. Throughout the pandemic, tenant and rent reform advocacy groups have demanded the cancellation [2] of any accrued rents during the pandemic and any rent currently due until the crisis is over.
On the opposite side of the issue, landlords have argued that laws granting eviction moratoriums place them in a vulnerable position. The freeze on evictions leaves landlords without an equitable remedy previously available to them. Additionally, due to significant pandemic related job losses, it may be unlikely that the past due rents will be recouped once the moratorium is lifted. Landlords have also made the argument that many of the properties are mortgaged, and despite the existing halts on foreclosure actions, banks have offered no similar relief. A significant number of landlords are individual investors with income properties, not large corporations, and rely on the rental payments to pay their mortgage and property taxes.
In response to those concerns, potential legislation has been proposed by state lawmakers. In March, State Senator Brian Kavanaugh proposed Senate bill S8140A, which establishes a COVID-19 emergency rental assistance program [3]. Under the bill, assistance would come in the form of emergency rental vouchers that eligible individuals (and families) could use to pay housing costs. The vouchers would enable landlords to receive payments while pausing, at least temporarily, the risk of eviction for tenants struggling with income loss due to the pandemic. As of July 7, 2020, Senator Kavanaugh’s proposed bill is in committee.
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This Legal Briefing is intended for general informational and educational purposes only and should not be considered legal advice or counsel. The substance of this Legal Briefing is not intended to cover all legal issues or developments regarding the matter. Please consult with an attorney to ascertain how these new developments may relate to you or your business. © 2020 Law Offices of Pullano & Farrow PLLC
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[1] https://www.governor.ny.gov/news/no-20228-continuing-temporary-suspension-and-modification-laws-relating-disaster-emergency [2] https://www.cnbc.com/2020/06/01/why-activists-are-pushing-for-rent-forgiveness-during-the-pandemic.html [3] https://www.nysenate.gov/legislation/bills/2019/s8140/amendment/a
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