NY's Eviction Moratorium is Constitutional - Read What Else the Court Tells Us

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.

EEOC Guidance on Antibody Tests and COVID-19 Tests

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.

NY | How to Reopen Your Business

Reopening isn’t just going back to work – there are 5 steps that businesses must take to open their doors if they want to avoid legal troubles.

Step 1. Review the applicable guidance for reopening & affirm that you will comply.

Each industry has tailored guidelines from NYS DOH, which represents the minimum requirements for you to reopen.

Before you open your doors, you MUST affirm that you have read the guidelines at this link.

Guidance for your industry can be located here.

Step 2. Formulate a business safety plan.

Each business MUST develop a written safety plan to prevent the spread of COVID.

The plan must be retained on the premises of the businesses and made available for inspection by DOH or your local health and safety authorities (zoning) upon request.

The sample plan provided by NYS is 7 pages long and includes a daily mandatory health screening assessment for employees and essential visitors, a requirement to record a log of all those physically present at the premises, cleaning requirements, and much more.

Start writing your plan now in compliance with the law if you plan to reopen.

Step 3. Create logbooks to comply and maintain policies.

You need to create forms to implement your plan. You need the health screening assessment developed, a logbook for cleaning, and a logbook for visitors. These can be inspected by DOH and other authorities so they better exist before you open your doors.

Step 4. Floor markings and PPE.

You are required to provide your entire team with PPE so it’s time to start ordering supplies yesterday. Plus, you need to place signage and floor markings throughout your premises to maintain proper social distancing. So, take out your tape and measuring stick to get going.

Step 5. Craft your message.

Your team and your customers need to understand your plan and how it impacts them, or they won’t follow it. So, you need to create a message, start getting it out there via email and make it available to everyone at your business. This message must explain your safety plan and the new policies that you will enforce for the rest of COVID. Getting buy-in is the key to proper implementation and protecting you from suit and negative PR.

Legally Speaking: Legal Issues Folks are Facing in Buying/Selling/Renting this Summer

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.

Andrew Lieb shares many legal issues people are facing this summer in Dan's Papers. Click HERE to read the full article.

New Rules for Residential and Commercial Foreclosure Proceedings

Effective June 24, 2020, the following rules apply to residential and commercial foreclosure proceedings as per Administrative Judge Lawrence K. Marks memorandum dated June 23, 2020:

Like eviction proceedings, commencement documents must be filed only by NYSCEF or by mail and commencement papers for residential and commercial foreclosure proceedings are required to include:

• 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.

In addition, regardless of whether an answer is filed, further hearing of the case shall be stayed until Executive Orders suspending deadlines for the prosecution of legal matters expire. However, the following may proceed:

• 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.

No motions shall be entertained or decided, except for motions to discontinue and motions for judgments of foreclosure for vacant and abandoned property only.

Stay tuned as Administrative Judge Lawrence K. Marks is expected to issue further directives on foreclosures at or before the Executive Orders suspending deadlines expire.