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Showing posts with label new york city. Show all posts
Showing posts with label new york city. Show all posts

Thursday, August 13, 2020

Evictions Resume, But New Eviction Rules Stay Residential Evictions Until October 1, 2020

On August 12, 2020, Judge Lawrence K. Marks published a memorandum and an Administrative Order on the filing and prosecution of residential and commercial evictions in New York State. Landlords and property managers should take note of the following, effective August 13, 2020:

1.      Evictions commenced prior to March 17, 2020 may continue but it is subject to the following rules:
a.   Proceedings continue to be governed by the suspension of filing deadlines as per Executive Order 202.8 as extended to September 4, 2020 by Executive Order 202.55. This means that the deadline to file an Answer to the Landlord-Tenant Petition or appear, among others, is suspended until September 4, 2020.
b.   Commercial Matters:
  • Commencement and enforcement against tenants facing financial hardship due to the COVID-19 pandemic is stayed until August 19, 2020 pursuant to Executive Order 202.28.
  • Commercial eviction matters may otherwise proceed in the normal course, subject to the tolling of statutory deadlines by Executive Order 202.8, as extended by Executive Order 202.55, as explained above.
c.   Residential Matters:
  • For all eviction matters commenced prior to March 17, 2020, including those with a warrant of eviction that has been issued but not yet executed, courts must hold a status or settlement conference to address a range of subjects related to the case and COVID-19 concerns.
  • After such conference, the court may take whatever steps it deems appropriate, such as deciding pending motions, entertaining new applications, or allowing the matter to move forward in its normal course.
  • No residential eviction may take place prior to October 1, 2020 or such later date or dates set by law.

2.      Evictions commenced on or after March 17, 2020 are suspended, regardless of whether it is commercial, residential, nonpayment, or a holdover. They may be commenced but will remain suspended until further order of the court. Nonetheless, eviction matters in which all parties are represented by counsel shall be eligible for virtual settlement conferences.

3.      Filing and service in eviction proceedings requires represented parties to commence new matters electronically through NYSCEF, if available, and by mail if not. Unrepresented parties may file papers in person. See AO/121/20

4.      Eviction proceedings should be conducted remotely whenever appropriate.


5.      Commencement papers in commercial and residential evictions proceedings must continue to include the form notice indicating that respondent-tenants may be eligible for an extension of time to respond to the complaint. You can find the notice HERE

6.      New York City eviction matters shall be governed by AO/160/20 and DRP 213


7.      Administrative Order AO/127/20 is superseded and is no longer in effect. Thus, the form affidavit / affirmation from the landlord / landlord’s counsel regarding the tenant’s COVID-19 hardship is no longer required, among others.







Thursday, July 09, 2020

NYC Reporting Requirements for Airbnb Rentals Amended

On July 7, 2020, Mayor DeBlasio signed into Law Int. No. 1976 which modified the requirement for booking services, like Airbnb, to report short-term housing rental transactions. Essentially, beginning on January 3, 2021, the new law exempts booking services from reporting listings for rooms only, and for up to two (2) guests. They are also exempted from reporting if their property is rented for less than four (4) days in one quarterly reporting period.

Specifically, Section 26-2101 of the Administrative Code of the City of New York is amended to add a new definition for “qualifying listing”:

Qualifying Listing. The term “qualifying listing” means a listing or advertisement that offers a short-term rental via a booking service, and:
1. such listing or advertisement offers or appears to offer the short-term rental of an entire dwelling unit or housing accommodation, or
2. such listing or advertisement offers or appears to offer a short-term rental for three or more individuals at the same time.

Further, Section 26-2102 is amended to exempt booking services from the quarterly reporting of information for transactions associate with a qualifying listing when all such transactions within a reporting period result in the rental of a dwelling unit or housing accommodation for an aggregate of four (4) days or less. The reports must include the address of the rental listing, name address, and contact information from the host, total rent received, among others, and must be submitted to the Office of Special Enforcement.

Failure to comply with the reporting requirements under the Administrative Code of the City of New York may result in penalties not more than the greater of $1,500 or the total fees collected during the preceding year by the booking service for transactions related to the qualifying listing.


Thursday, June 18, 2020

NYC Civil Court COVID-19 Directives on Evictions Based on Non-Payment of Rent

Beginning June 20, 2020, any petitioner seeking to commence a summary proceeding for nonpayment of rent shall file with the petition an affidavit by a person with knowledge of the facts, stating the following:
  • Petitioner has made a good faith effort to ascertain whether the respondent is a person eligible for unemployment insurance or benefits under state or federal law or otherwise facing financial hardship due to the COVID-19 pandemic;
  • Respondent is not such a person; and
  • Facts upon which the petitioner / individual signing the affidavit based such conclusion. See DRP 209.
Similarly, any individual seeking to obtain a default judgment for the respondent’s failure to answer in a summary proceeding based on the non-payment of rent must attach to the application, an affidavit with the above information. See DRP 210.

Lastly, the affidavit is also required to enforce a warrant of eviction that was awarded prior to March 20, 2020 based upon the nonpayment of rent. To enforce the warrant, the petitioner must seek leave of court to enforce the warrant and such motion must include the affidavit. See DRP 211.

The above directives were published in light of Executive Order 202.28 which extended the eviction moratorium to August 20, 2020 for eviction proceedings or enforcement based on nonpayment of rent or foreclosure of a mortgage, owned or rented, “by someone that is eligible for unemployment insurance or benefits under state or federal law or otherwise facing financial hardship due to the COVID-19 pandemic.”

The above directives apply to both residential and commercial properties and proceedings in all five boroughs and are all effective June 20, 2020, however, it is advised that the above affidavit also be prepared for eviction proceedings in Nassau and Suffolk County as Executive Order 202.28 applies statewide.

While Executive Order 202.28 and the Courts are well-intentioned, gathering the information required to complete the affidavit may be problematic for landlords. Often, a tenant who has not paid rent, has not reached out to the landlord to renegotiate their rent during the coronavirus pandemic, and is being evicted is unlikely to cooperate with a landlord’s attempt to get information. Nonetheless, landlords are advised to consult counsel in order to ensure that they follow the correct court procedures as one small mistake in filing may cause further delay, or even dismissal, of their court proceedings.



Thursday, May 21, 2020

Commercial Personal Guaranties Deemed Unenforceable in NYC Council’s COVID-19 Relief Bill – Litigation to Follow if Enacted


On May 13, 2020, the NYC Council approved Int. No. 1932-A, which makes substantial changes to personal guaranties in commercial leases. The bill is on the Mayor’s desk to be enacted.

The bill’s purpose is to provide relief to NYC commercial tenants impacted by COVID-19. It temporarily prohibits the enforcement of personal liability provisions in commercial leases or rental agreements. It would amend the Administrative Code of the City of New York by adding Section 22-1005 and adding Paragraph 14 to Subdivision a of section 22-902 of the NYC Administrative Code.

If enacted, the bill would render guarantee provisions unenforceable against natural persons who are not a tenant in commercial leases or other rental real property. The law would only impact liability for the payment of rent and other charges caused by an occurrence of default, and subject to the following conditions:
1. The tenant must satisfy at least one of the following:
a)     The tenant was required to cease serving patrons food or beverage for on-premises consumption or to cease operation under EO 202.3;
b)     The tenant was a non-essential retail establishment subject to in-person limitations under guidance issued by the NYS Department of Economic Development pursuant to EO 202.6; or
c)     The tenant was required to close to members of the public under EO 202.7; and

2. The default or other event which caused the natural person to become personally liable for such obligation occurred between March 7, 2020 and September 30, 2020, inclusive.

Under the bill, an attempt to enforce a personal liability provision that the landlord knows or reasonably should know is unenforceable, pursuant to the above, shall be deemed commercial tenant harassment, which could result in compensatory and punitive damages and attorneys’ fees and court costs. See N.Y.C. Admin. Code § 22-903.

Sounds too good to be true for many tenants and often when it’s too good to be true, it’s untrue. Expect this law to be challenged on constitutional grounds should it be enacted. Specifically, the bill seems to impair the Contracts Clause of the United States Constitution because it retroactively affects personal guaranties entered into prior to the bill’s passing. For such a claim to succeed, the initial inquiry under the impairment of contracts clause contains three components:
  1. Whether there is a contractual relationship;
  2. Whether a change in law impairs that contractual relationship; and
  3. Whether the impairment is substantial. U.S.C.A. Const. Art. 1, § 10, cl. 1; American Economy Ins. Co. v. State, 30 N.Y.3d 136 (2017).
While tenants will surely argue that the bill doesn’t substantially impair the parties’ contractual relationship, as the bill only covers rent and payments for the period of March 7, 2020 to September 30, 2020, landlords will counter that the personal guarantee was a material term of the lease and a substantial reason that the landlord agreed to enter into the contract.

For analogy, the Court of Appeals has previously struck down similar government interference in contacts. In Patterson v. Carey, the Court of Appeals struck down a law which curtailed toll authority bondholders’ ability to increase their tolls for Jones Beach State Parkway on constitutional grounds. 41 N.Y.2d 714 (1977). 

If the NYC bill passes, it would likely undergo similar challenges and review as the law in Patterson and be deemed unconstitutional. The bill’s impairment to contractual rights agreed upon by landlords and guarantors would be substantial, especially considering that the bill does not merely delay a landlord’s right to enforce the guarantee during the period stated in the bill, it extinguishes it altogether.

Mayor DeBlasio has until June 12, 2020 to either sign, veto, or do nothing. If the Mayor signs the bill or does nothing, the bill will automatically become law. If the Mayor vetoes the bill, it is sent back to the Council. The Council can then override the Mayor’s veto with a 2/3 vote.

In the meantime, both landlords and tenants should contact their attorneys to ensure that their interests are protected and to prepare for expected lawsuits to follow. For ideas on how to creatively resolve lease issues due to coronavirus and for tips on important lease provisions when renegotiating, listen to our podcasts HERE and HERE.



Friday, March 13, 2020

NYC Housing Court on Eviction Moratorium Due to Coronavirus

Effective March 13, 2020, the New York City Housing Courts are on a one-week moratorium on evictions in New York City, subject to further extension upon review. Further, New York City Housing Court is also directed to decline to issue new eviction warrants when a party has not appeared in court, until further notice.

This moratorium is imposed through a memorandum on the coronavirus from the Chief Administrative Judge of the State of New York Unified Court System. You can read the memorandum here.