Effective June 30, 2020, the Tenant Safe Harbor Act (“Act”) was signed into law by Governor Cuomo. Essentially, the Act prohibits courts from issuing a warrant of eviction or judgment of possession against a residential tenant for non-payment due to financial hardship during the COVID-19 covered period, but it allows landlords to obtain a money judgment for rent in a summary proceeding. Alternatively, landlords can simply commence a plenary action for the money judgment in district, county, or supreme court as jurisdictionally appropriate.

The Act defines “COVID-19 covered period” as March 7, 2020 until the date executive orders which closed or restricted public or private businesses, or required the postponement or cancellation of non-essential gatherings for any size for any reason expire. This means that until all businesses are allowed to be 100% open, a tenant may claim financial hardship and not be evicted.

As a result, A landlord who starts a summary proceeding to evict a tenant or lawful occupant for non-payment of rent will not be able to get a warrant of eviction or judgment of possession if the tenant or lawful occupant claims that he suffered financial hardship during the COVID-19 covered period. Tenants and lawful occupants are also allowed to raise it as a defense in the summary proceeding.

To determine whether a tenant suffered a financial hardship, courts shall consider the following, among other relevant factors:

1. Tenant’s or lawful occupant’s income prior to the COVID-19 period;
2. Tenant’s or lawful occupant’s income during the COVID-19 period;
3. Tenant's or lawful occupant's liquid assets; and
4. Tenant’s or lawful occupant's eligibility for and receipt of cash assistance, supplemental nutrition assistance program, supplemental security income, the New York State disability program, the home energy assistance program, or unemployment insurance or benefits under state or federal law.

The Act, however, does not prohibit landlords from obtaining a money judgment for rent if successful in a summary proceeding. Landlords are advised to contact counsel to discuss the best strategy to manage their tenants while complying with the various executive orders and laws in place due to the coronavirus pandemic.

If you are a NYS landlord, you MUST read the decision from the case Elmsford Apartment Associates LLC v. Cuomo if you want to be on the top of your game.

We aren't going to discuss the results, beyond saying the Court ruled that Governor Cuomo can legally suspend evictions and more during a pandemic.

We focus on these other gems given to us by the Court - Every property investor (landlord, property manager, broker, flipper, etc.) should read and accept this reality before getting into the investment game:

Evicting a tenant – especially a residential tenant – in New York is a slow, cumbersome and extremely tenant-favorable process, especially when compared to analogous procedures in other states.

Governor Cuomo did nothing to impede the commencement of holdover proceedings… Nor does EO 202.28 suspend[] the landlords’ right to initiate a common law breach of contract action in the New York State Supreme Court to redress a tenant’s failure to perform its payment obligations under his or her lease.

Tenants will continue to accrue arrearages, which the landlord will be able to collect with interest once the Order has expired.

One who chooses to engage in a publicly regulated business… by so doing surrenders his right to unfettered discretion as to how to conduct same.

The expected costs of foreseeable future regulation are already presumed to be priced into the contracts formed under the prior regulation

New York landlords do not enjoy a constitutional right to realize a profit from their rental properties – let alone all the profits contemplated in each of their individual rental agreements.

If the tenant uses the security deposit to pay a month’s rent, and the tenancy ends before the deposit is fully replenished, the landlord can obtain a judgment for the amount expended in repairs.

A special shout-out to the eviction explanation -

To secure an eviction warrant from the housing courts, a New York landlord must serve the tenant a notice of nonreceipt of payment, and give the tenant one final chance to pay by making a demand of payment within 14 days. If the landlord is still owed payment after two weeks have passed, he may commence what is known as a summary proceeding by filing a petition in the civil court, returnable by the tenant within 10 days. If the tenant does not respond in ten days, the court may (but rarely does) issue an eviction warrant immediately. However, if the tenant does respond, however, a trial is set for eight days hence. The trial may be adjourned up to ten additional days if the parties so require in order to produce their witnesses. If, after trial, a judgment is entered for the landlord and the court issues a warrant for eviction, the Sheriff must give the tenant 14 days’ notice in writing prior to execution. There are the usual provisions for appeal and stays issue routinely so that non-defaulting tenants are not evicted before their cases are fully reviewed. But even if the evidence supports a judgment for the landlord, the housing court is not required to order the tenant’s immediate eviction. A tenant may obtain a stay of the issuance of the warrant for up to one year by showing that ‘it would occasion extreme hardship to the tenant or the tenant’s family if the stay were not granted’. Such stays are far from uncommon.

Still think that being a landlord is for you?

This hasn't diminished our motivation to invest in real estate, but as the Court makes clear - we respect the rules and adjust our prices / reserves to account for more rules in the future.

Some years there are less rules and other years there are more, but we know that a keen understanding of the rules will make us profitable as property investors.

If you want profitability too, you need to increase your compliance budget immediately and respect the rules of the game because, as you can see, fighting the governor's office is a losing battle.

The Equal Employment Opportunity Commission (EEOC) published guidance concerning business practices that are both safe and compliant with anti-discrimination laws during the COVID-19 pandemic. The guidance discusses various relevant practices but most notable of which is the EEOC’s guidance on medical examinations prior to employees re-entering the workplace. According to the EEOC, antibody tests may not be required by employers for employees to re-enter the workplace, but employers may require employees to undergo a COVID-19 test to re-enter.

The EEOC advised that antibody tests should not be used to make decisions about returning to the workplace and currently does not meet the Americans with Disabilities Act (ADA)’s “job related and consistent with business necessity” standard for medical examinations for current employees. This standard applies to any mandatory medical test for employees. Thus, an antibody test may not be required for an employee to enter the workplace and employers should be aware that requiring antibody tests could be the basis of a discrimination claim.

On the other hand, tests which determine if someone has an active case of COVID-19 are permissible under the ADA and employers may use it to make decisions on whether an employee should return to the workplace. The distinction is that an employee who is currently infected with COVID-19 poses “a direct threat to the health of others.” However, employers should still be aware of the possibility of an employee testing false-positive or false-negative and employers should ensure that tests are accurate and reliable.

Nonetheless, employers are encouraged to practice social distancing, regular handwashing, and the wearing of PPE’s as there is no certainty that employees will not be infected with COVID-19 after the test is administered. In addition, employers should contact counsel to have a tailored COVID-19 safety plan compliant with federal anti-discrimination laws and regulations while ensuring a safe workplace for employees.

Everyone is in the Hamptons this summer. Tenants fled here in March. They are staying even after they were supposed to go back to the city at the end of their lease terms. Unfortunately, tenants have unilaterally elected to illegally holdover in their former rentals because it's not just more beautiful here, it's safer. This has caused major problems for buyers, sellers, and legitimate tenants alike.

• A form plaintiff’s attorney affirmation, indicating that counsel has reviewed the various state and federal restrictions and qualifications on foreclosure proceedings and believes in good faith that the proceeding is consistent with those restrictions and qualifications; and
• A form notice to defendants-tenants (in English and Spanish), informing them that they may be eligible for an extension of time to respond to the complaint in light of legal directives related to the COVID-10 pandemic, and directing them to a website link for further information.

• Foreclosure matters wherein all parties are represented by counsel may be calendared for both initial and follow-up virtual settlement conferences;
• Lenders may move for a judgment of foreclosure and sale on the ground that a property is vacant and abandoned; and
• Lenders may also move to discontinue a pending case.

Beginning June 20, 2020, courts will accept new eviction matters – statewide eviction moratorium expires (Executive Order 202.28).

To facilitate this, the Chief Administrative Judge released a memorandum setting the procedures for residential and commercial eviction proceedings in New York State.

Now, commencement documents in eviction proceedings must be filed with the court by NYSCEF or mail. Further, until further order, petitions in commercial and residential eviction proceedings based on nonpayment of rent or on other grounds must include the following:

1. Form petitioner’s attorney affirmation or petitioner’s affidavit (for self-represented petitioners), indicating that counsel / petitioner has reviewed the various state and federal restrictions and qualifications on eviction proceeding and believes in good faith that the proceeding is consistent with those restrictions and qualifications; and
2. Form notice to respondent-tenants (in both English and Spanish), informing them they may be eligible for an extension of time to respond to the petition in light of legal directives related to the COVID-10 pandemic, and directing them to a telephone number and/or website link for further information.

As a reminder, eviction proceedings based on non-payment of rent by a tenant who is eligible for unemployment insurance or benefits under federal or state law or is otherwise facing financial hardship due to COVID-19 are prohibited until August 20, 2020 per Executive Order 202.28. In addition to the above forms, NYC currently has directives requiring good faith affidavits to be filed with the petition. You can read more about it HERE. Stay tuned should the Civil Court of New York City update their directives in light of the Chief Administrative Judge’s memorandum.

The memorandum further stays the hearing of the eviction matter until the Executive Orders suspending statutory time periods for legal matters expire. However, eviction matters commenced on or before March 16, 2020 in which all parties are represented by counsel shall be eligible for calendaring for virtual settlement conferences.

Also, the New York State Courts Electronic Filing System (NYSCEF) will accept New York City Housing Court matters later this summer.

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.

On June 15, 2020, the United States Supreme Court issued a decision in three companion cases (Bostock v. Clayton County; Altitude Express, Inc. v. Zarda; R.G. & G.R. Harris Funeral Homes, Inc. v. EEOC) holding that Title VII of the Civil Rights Act of 1964 protects homosexual and transgender employees from discrimination/harassment in the workplace.

In all three (3) cases, the employer terminated the employee's employment after it was revealed that the employee was homosexual or transgender. Each employee brought suit under Title VII claiming that they were fired because of their "sex" (Title VII prohibits discrimination based on race, color, religion, sex and national origin). The Supreme Court held that "sex", pursuant to Title VII, includes sexual orientation and transgender as protected classes because, as the Court reasoned, "it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex."

The Court provided the following example to illustrate its position: An employer has two employees, a female and a male, both of whom are attracted to men. If the employer fires the  male employee for no reason other than the fact he is attracted to men, the employer discriminates against him because the employer is tolerating the same trait or behavior from the female employee. The employer, the Supreme Court held, has thus terminated the employee "because of sex" in violation of Title VII.

This decision is particularly noteworthy because Justice Gorsuch and Chief Justice Roberts, typically known as  "conservative" justices, were in the majority (Justice Gorsuch authored the Decision). This signifies the courts continued emphasis on interpreting laws to protect employees from discrimination in the workplace. Employers should, thus, take even more proactive steps (including but not limited to policies and training) to mitigate the risks of discrimination lawsuits.

The Real Estate market has reopened and investors are everywhere. We review the legal requirements to take on investors and review calculations to make sure you are making the right decisions.

Governor Cuomo has signed Executive Order 202.38, a copy of which can be found HERE. For non-legal practitioners, the big ticket items in this Executive Order deal with Phase 2 reopenings. Businesses can check for temperature and refuse entry. Restaurants and bars can serve food outdoors. Sidewalks and closed streets can be used by businesses to serve food and drink. Houses of worship can allow non-essential gatherings at less than 25% capacity. Of course all of this good news is still subject to businesses following social distancing, cleaning protocols and a reopening plan, which we outlined in our blog last week titled Are you Ready to Reopen Your Business? Here is Your 5-Step Plan.

5-Step Plan to Reopen Your Long Island Business

Major revisions to the Paycheck Protection Program are on the way. The "Paycheck Protection Program Flexibility Act" amends the portion of the CARES Act that established the PPP. The changes are intended to make forgiveness of PPP loans more achievable for a greater number of businesses. Major changes include:

Senate Bill S8192B / Assembly Bill 10290B passed both the Assembly and Senate and is currently on the Governor’s desk for signature. The legislation will prohibit the eviction of residential tenants who suffered financial hardship during the COVID-19 pandemic.

Specifically, the bill covers the period from March 7, 2020 until various Executive Orders which placed restrictions requiring closure of and restriction on businesses and establishments, or postponement or cancellation of non-essential gatherings continue to apply in the county of the tenant’s residence (“COVID-19 Covered Period”). Further, the bill allows residential tenants to raise a defense of financial hardship during such period in a summary proceeding and courts shall consider the tenant’s income prior to and during the COVID-19 Covered Period, liquid assets, and eligibility for cash assistance, disability, unemployment insurance, and state or federal programs.

This legislation expands Executive Order 202.8 which imposed a statewide eviction moratorium until June 18, 2020 and Executive Order 202.28 which extended the moratorium to August 20, 2020 for tenants facing financial hardship due to the COVID-19 pandemic. Unlike the previous Executive Orders, the legislation does not prohibit the initiation of summary eviction proceedings, it merely prohibits the courts from issuing judgments of possession and warrants of eviction. It does not prevent landlords from obtaining money judgments for unpaid rent.

While this legislation is a softer blow to landlords than a complete prohibition on the initiation of eviction proceedings, the main concern for landlords is that the COVID-19 Covered Period can last well up to 2021. Further, as landlords can only get a money judgment and not an eviction, the judgment does not stop the bleeding and would eventually require landlords to go back to court to obtain another judgment for rent prior to the tenants vacating the property.

A lawsuit has already been filed by landlords to nullify provisions of Executive Order 202.28 which prohibit landlords from pursuing eviction proceedings until August 19, 2020 and which allow tenants to use the security deposit toward rent payments. The landlords argue the Executive Order allows tenants to withhold rent without immediate repercussion and precludes landlords from utilizing security deposits as compensation for damages caused to the unit by the tenant. It is expected that if the bill is enacted into law, litigation will surely follow.

In the meantime, landlords should consult counsel for strategies on how to mitigate their risk due to tenants’ nonpayment.

• Robin Glasco, Healthcare Strategist / Consultant for Walmart and Board Member of the American Telehealth Association
• Dr. Ketan Badani, Professor of Urology and Vice Chairman of Robotic Operations at Mount Sinai Health System
• Andrew Starr, Chief Health Operations Officer of Tallahassee Memorial Healthcare

On May 28, 2020, Governor Cuomo signed Executive Order 202.34, which authorized business operators and building owners to exercise their own discretion in denying entry to individuals who fail to comply with Executive Order 202.17 requiring face-coverings when in a public place.

Specifically, EO 202.34 allows business operators and building owners to use their discretion in denying entry and requiring or compelling removal of persons not wearing a face-covering, unless they are under the age of two or are not able to medically tolerate it as per EO 202.17. More importantly, EO 202.34 exempts such business operators and building owners from a claim of violation of the covenant of quiet enjoyment or frustration of purpose. However, the directive must still adhere to the Americans with Disabilities Act or any provision of either New York State or New York City Human Rights Law, or any other provision of law.

While businesses and building owners can now restrict entry, they should contact counsel to create a policy that ensures compliance with the anti-discrimination laws and mitigate exposure to discrimination claims.

A COVID-19 property tax relief bill is on its way to Governor Cuomo's desk for signature. The bill, S8138B, empowers local taxing jurisdictions to defer property taxes for up to 120 days from their original due date. Alternatively, the taxing jurisdiction can create a payment plan with similar time restrictions. This special legislation will automatically expire with the State Disaster Emergency Declaration.

• Seg 1: Restaurant Innovation Driving the Industry of Tomorrow

• Seg 2: Alcohol To-Go Lobbying Discussed with CEO of New York State Restaurant Association

• Seg 3: Stories of How Restaurants are Changing to Thrive

• Seg 4: How Innovative Hamptons Restaurants Pivot to Awesome

On May 18, 2020 the New York State Court System resumed limited in-person operations in upstate counties. Today Chief Judge Janet DiFiore announced that in-person operations will expand to Dutchess, Orange, Putnam, Rockland and Westchester Counties on May 27, Ulster and Sullivan Counties on May 28, and Nassau and Suffolk County on May 29. 

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.

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).

Beginning May 25, 2020, litigants will finally be able to commence new actions. The acceptance of electronic filing for new non-essential matters represents the clearing of the the penultimate hurdle for the court system's remote operations. In effect, trials and hearings are the only civil court operations still on hold. Judge Marks May 20, 2020 memorandum can be found, HERE. 

The Equal Employment Opportunity Commission ("EEOC") issued a press release today announcing that it entered into a consent decree with FedEx Ground to settle a disability discrimination lawsuit brought pursuant to the Americans with Disabilities Act ("ADA"). The federal lawsuit was filed on behalf of deaf and hard-of-hearing package handlers and applicants to those positions alleging that FedEx Ground denied deaf and hard-of-hearing package handlers reasonable accommodations and denied applicants employment because of their hearing related disabilities.

The consent decree entitles the 229 aggrieved individuals to a share of the $3.3 million settlement. In addition, the settlement requires FedEx Ground to provide accommodations to deaf and hard-of-hearing package handlers including access to live and video remote sign language interpreting, closed captioning on videos and provision of non-audible cues (i.e. vibration) on scanning equipment. Finally, the consent decree requires that FedEx Ground institute safety measures to protect hearing compromised package handlers including ensuring that motorized equipment include visual warning lights and providing personal notification devices that will notify hearing compromised handlers of an emergency.

This settlement should serve as a reminder to employers to ensure that procedures are in place for employees to request a reasonable accommodation and that accomodation requests are granted to the extent that they are reasonable and can assist employees in performing the essential functions of their positions.

It's time to make lemonade out of those lemons and fill up your half cup of coffee! We have the technology to run businesses remotely and Coronavirus is the motivation for everyone to use it. This means the future will involve a drastic decline in daily office commuting with a corresponding uptick in new real estate investment opportunities. Trendsetters and HGTV Stars Tom and Mickey join us to explore New York's exurban areas that are poised to explode. Plus we break down when to invest and teach you how to time the market before 2021.

The Suffolk County Legislature recently passed a "Ban the Box" law which will prohibit all employers in Suffolk County with 15 or more employees from inquiring as to a candidate's criminal conviction history during the application process. 

An employer cannot consider an applicant's criminal conviction history until after an application has been submitted and the initial interview has been conducted. An employer may only deny employment based on an applicant's criminal conviction history after conducting an individualized inquiry and concluding that the criminal conviction "bears a direct relationship to the duties and responsibilities of the position sought, or that hiring would pose an unreasonable risk to the property or to the safety of individuals or the general public."

The law specifically exempts the Suffolk County Police Department, the Suffolk County Department of Fire, Rescue and Emergency Services, public or private schools and any public or private provider of care or supervision for children, young adults, or physically or mentally disabled individuals. 

An aggrieved individual may file a claim with the Suffolk County Human Rights Commission or file a civil lawsuit. Employers in Suffolk County should immediately adjust their hiring practices and policies to avoid substantial liability.

The law is effective as of August 25, 2020.

Nassau County Supreme Court Justice Jeffrey Brown struck down Nassau County’s $355 fee to verify a property’s section, block and lot due to it being unlawful and unconstitutional.

In Falk v. Nassau County, the Plaintiff alleged that Nassau County excessive fees for tax map certification letters (TMCLs) as issued pursuant to Nassau County Administrative Code § 6-33.0. These TMCLs are issued by the Nassau County Department of Assessments and must be filed with real property documents when submitted to the Nassau County Clerk for recording. Plaintiff alleged that the fees are excessive and not reasonably necessary to maintain the County’s real property registry and such fees are taxes as their purpose really is for general revenue. In this regard, the Plaintiff sought a declaratory judgment deeming Administrative Code § 6-33.0 unconstitutional because it is excessive and an unlawful tax.

Among other reasons, the court granted the Plaintiff’s motion for summary judgment and found the TMCL fees unconstitutional as it was established that its purpose was for general revenue purposes only and that the fee itself is “indisputably disproportionate to the cost associated with its issuance.” Further, the Court found that they are excessive and not tied to the County’s responsibility in maintaining its property registry nor were such fees assessed or estimated on the basis of studies or statistics.

Nassau County is expected to file an appeal to Judge Brown’s decision. Stay tuned.