New York Governor Extends Relief for Commercial and Residential Tenants

Alerts / May 8, 2020

On May 7, 2020, the governor of the state of New York, Andrew M. Cuomo, issued Executive Order No. 202.28 – Continuing Temporary Suspension and Modification of Laws Relating to the Disaster Emergency (EO 202.28 or the Executive Order), in an effort to further protect New York commercial and residential tenants suffering financial hardship as a result of the COVID-19 pandemic.

Gov. Cuomo issued the Executive Order under the authority of Section 29-a of Article 2-B of the New York Executive Law, which permits the governor to temporarily both suspend any statute, local law, ordinance, order, rule or regulation of any agency during a state disaster emergency if compliance with such provisions would prevent, hinder or delay action necessary to cope with the disaster or if necessary to assist or aid in coping with such disaster, and issue any directive during a disaster emergency necessary to cope with the disaster.[1]

Pursuant to the foregoing powers and authority, Gov. Cuomo:

  1. Permitted residential tenants to temporarily use security deposits to pay rent by modifying Sections 7-103, 7-107 and 7-108 of the General Obligations Law to provide that:
    • Landlords and tenants or licensees of residential properties may, upon the consent of the tenant or licensee, enter into a written agreement by which the security deposit and any interest accrued thereof, shall be used to pay rent that is in arrears or will become due. If the amount of the deposit represents less than a full month rent payment, this consent does not constitute a waiver of the remaining rent due and owing for that month. Execution in counterpart by email will constitute sufficient execution for consent;
    • Landlords shall provide such relief to tenants or licensees who so request it that are eligible for unemployment insurance or benefits under state or federal law or are otherwise facing financial hardship due to the COVID-19 pandemic;
    • It shall be at the tenant or licensee’s option to enter into such an agreement and landlords shall not harass, threaten or engage in any harmful act to compel such agreement;
    • Any security deposit used as a payment of rent shall be replenished by the tenant or licensee, to be paid at the rate of 1/12 the amount used as rent per month. The payments to replenish the security deposit shall become due and owing no less than 90 days from the date of the usage of the security deposit as rent. The tenant or licensee may, at their sole option, retain insurance that provides relief for the landlord in lieu of the monthly security deposit replenishment, which the landlord must accept such insurance as replenishment.[2]
  2. Banned late payments or fees for missed rent payments through August 20 by modifying Subdivision 2 of Section 238-a of the Real Property Law to provide that “no landlord, lessor, sub-lessor or grantor shall demand or be entitled to any payment, fee or charge for late payment of rent occurring during the time period from March 20, 2020, through August 20, 2020.”[3]
  3. Extended the moratorium on residential or commercial evictions an additional 60 days until August 20.

In addition to the residential tenant relief provided by EO 202.28, the New York City Rent Guidelines Board preliminarily voted to freeze rent on regulated apartments in New York City for the 12-month period beginning October 1. The final vote is scheduled for June 17.

We will continue to monitor the situation closely and provide updates as information becomes available.

Authorship Credit: Nicholas P. Melillo and Michael Iannuzzi

[1] N.Y. Exec. Law § 29-A (1).
[2] See Executive Order No. 202.28
[3] Id.

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