Update on Landlord-Tenant Issues

On May 7, 2020, Governor Andrew Cuomo signed Executor Order No. 202.28, which extends the stay of evictions and foreclosures from June 20, 2020 through August 20, 2020, limits a landlord’s authority to charge late fees, and gives tenants the right to use their security deposit for payment of rent.

Effect on Evictions and Foreclosures

The Order extends the stay of evictions and foreclosures from June 20, 2020 – when the stay would have expired – to August 20, 2020, with some new limitations.  There can be no initiation or enforcement of either: (1) evictions of commercial or residential tenants for the nonpayment of rent or (2) foreclosures of any residential or commercial mortgages for the nonpayment of the mortgage, under the following circumstances: the property is owned or rented by someone who is eligible for unemployment insurance or benefits under state or federal law or is otherwise facing financial hardship due to the COVID-19 pandemic.

Thus, with respect to evictions, eviction proceedings can apparently be commenced against commercial and residential tenants for breaches of the lease unrelated to nonpayment.  However, the bar against commencement of evictions based on nonpayment of rent remains in place, at least to the extent the tenant is eligible for unemployment or “facing financial hardship,” a phrase that is not defined but capable of being broadly interpreted.  A landlord may not know whether the tenant falls within this category, so it is possible that financial hardship may be viewed as a defense to an eviction, not just an impediment to commencement of the proceeding.  From a practical standpoint, due to the current closure of most landlord-tenant courts and the restrictions on commencing any new actions in Supreme Court except for emergencies, no new eviction proceedings or foreclosure actions  can be brought at this time.  Still, assuming the landlord tenant courts reopen before the August 20, 2020 deadline, the courts will have the opportunity to interpret the meaning of this Executive Order.

Use of Security Deposits

The Order permits landlords and tenants of residential properties to enter into a written agreement by which a security deposit, plus any interest accrued, can be used to pay rent that is in arrears or will become due.  Execution by counterpart via email constitutes sufficient execution.  If the amount of the security deposit is less than the full amount due, there is no waiver of the total amount due and owing to the landlord.  However, to enter into such an agreement, the tenant or licensee must be eligible for unemployment insurance or other benefits under state or federal law, or must otherwise be facing financial hardship due to the COVID-19 pandemic.

It is the option of the tenant/licensee to enter into such an agreement.  The landlord is not permitted to act in any manner to compel the tenant/licensee to enter into such an agreement.

Any security deposit used for payment of rent must be replenished by the tenant/licensee at the rate of 1/12th the amount used per month.  The payments to replenish the security deposit become due and owing no less than 90 days from the date the security deposit was used for rent.  The tenant/licensee may retain insurance to provide relief to the landlord, in lieu of the monthly security deposit replenishment, which the landlord must accept as replenishment.

Late Fees

The Order modifies Real Property Law §238-a(2) to the extent that no landlord, lessor, sub-lessor or grantor can demand or be entitled to any payment or fee for the late payment of rent for the period from March 20, 2020 through August 20, 2020, with respect to any residential dwelling.

How COVID-19 Can Impact Landlord-Tenant Matters

Posted March 27, 2020

The State of Emergency and COVID-19 crisis has created unprecedented concerns for New York landlords.  On March 20, 2020, Governor Andrew Cuomo signed Executive Order No. 202.8, which stays the enforcement of all residential and commercial evictions for a period of 90-days.  No eviction orders can be signed or executed, no default judgments can be granted and, if you had already obtained a judgment of possession and warrant of eviction prior to Governor Cuomo’s Executive Order, the sheriff cannot execute the warrant.  This essentially ties the hands of any landlord who finds himself or herself with a non-paying tenant or a tenant who has held over in possession upon expiration of the lease.  No judicial remedy can be sought for the next 90-days.  In addition to this moratorium on evictions, New York State Courts, including the lower District Courts where eviction matters are held, are physically closed and providing only “essential services.”  As to housing matters, “essential services” has been defined as including those issues related to landlord lockouts, serious code violations and repair orders, which are mostly prevalent in New York City.

At this time of year, many landlords on eastern Long Island may have already secured  tenants for their homes for the popular seasonal period of Memorial Day through Labor Day.  If those same landlords have also entered into a short-term rental agreement with a tenant escaping New York City for COVID-19-related reasons and such short-term tenant fails to vacate at the end of the lease, the current moratorium on evictions may prove it impossible for the landlord to remove the present tenant so that the seasonal tenant can move in.

In addition to this new uncertain reality, landlords are still grappling with the impact of New York’s Housing Stability & Tenant Protection Act of 2019 (the “Act”), which went into effect last June and brought with it sweeping changes to New York landlord/tenant law.  The Act both modified existing provisions under New York’s Real Property Law, Real Property Actions & Proceedings Law and General Obligations Law and created new law.  Its statewide regulations affect all residential lease agreements, including short-term, seasonal rentals.  To summarize a few key changes:

·       the Act limits the amount of late fees that a landlord can charge a tenant and when those charges can be imposed;
·       it creates new notice requirements for landlords in the context of late payments, rent increases and non-renewals; and
·       it limits the amount of rent and security deposit that a landlord can collect upon signing of a lease.

In particular, the Act provides that “no deposit or advance shall exceed the amount of one month’s rent” (see, General Obligation Law Section 7-108).  This restriction has created instability and uncertainty in the seasonal rental market of the Hamptons and other communities on the East End of Long Island, where the collection of the entire rent upfront was a paramount aspect of the seasonal lease.  In addition to disrupting this business model for East End seasonal rentals, the Act has made extensive modifications to both non-payment and holdover proceedings which will increase the amount of time it takes a landlord to get a court date and evict a tenant.  For example, where the statutory prerequisite notice requirement in a non-payment proceeding used to be 3-days, it is now 14-days under the Act.  Where the sheriff used to be able to serve a warrant of eviction to a tenant on at least 72-hours’ notice, now the sheriff is required to give 14-days’ notice.  In addition to extending various time periods, the Act gives judges broader discretion in issuing stays of eviction (in some cases, for up to 1 year) and it imposes a duty on residential landlords to mitigate damages .  Efforts are being made in the State legislature to exempt seasonal rentals, i.e. those for a period of 120-days or less, from the rent and security deposit restrictions under the Act.  EHADP will continue to monitor these efforts and will provide our clients with any legislative updates.

Small Business COVID-19 Resources

Posted March 27, 2020

Small businesses are being affected heavily by the COVID-19 pandemic, but there are many steps that can be taken and resources that can be utilized to minimize the economic impacts.

Small Business Steps and Precautions During COVID-19:

  1. Contact your insurance agent to review your coverage under your business interruption policy
  2. Apply for SBA Disaster Loan
  3. Contact existing lenders used by your business to see if they have any special offers
  4. Be aware of health care plan requirements for coverage of employees in the event that employees’ hours are being cut or employees are being furloughed and notify the employees of any changes in benefits that could result due to a reduction in hours
  5. Be aware of new federal and state laws (see links below) providing for paid sick leave, paid family leave and in the case of New York, disability benefits and job protection
  6. Keep documentation of all atypical business expenses incurred in connection with COVID-19 (i.e., face masks, gloves, hand sanitizers etc.) for potential future FEMA relief

Federal Actions & Resources:

Families First Coronavirus Response Act– provides paid leave for employees absent from work for reasons related to COVID-19 https://www.irs.gov/newsroom/treasury-irs-and-labor-announce-plan-to-implement-coronavirus-related-paid-leave-for-workers-and-tax-credits-for-small-and-midsize-businesses-to-swiftly-recover-the-cost-of-providing-coronavirus

The act provides for tax credits and tax exemption for businesses as follows:

  • Payroll tax credit for required paid sick leave
  • Income tax sick leave credit for the self-employed
  • Payroll tax credit for required paid family leave (Emergency Family and Medical Leave Expansion Act)- this leave is available when an employee must take off to care for their children under age 18 because of a COVID-19 emergency declared by a government authority that either closes a school or place of childcare or makes a childcare provider unavailable
  • Income tax family leave credit for the self-employed

IRS Resources–  https://www.irs.gov/coronavirus  The IRS has extended the deadline to file and pay 2019 federal income taxes; returns or payments due by April 15, 2020 are now due by July 15, 2020 (no forms need to be filed to obtain the extension and no interest or penalties will accrue until July 16, 2020)  https://www.irs.gov/newsroom/tax-day-now-july-15-treasury-irs-extend-filing-deadline-and-federal-tax-payments-regardless-of-amount-owed

U.S. Small Business Administration  https://www.sba.gov/

Small business owners in all 50 states are eligible to apply for disaster loans due to the Coronavirus (COVID-19)https://www.sba.gov/disaster-assistance/coronavirus-covid-19

U.S. Chamber of Commerce https://www.uschamber.com/coronavirus

Centers for Disease Control and Prevention (CDC) https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html

Pandemic Preparedness in the Workplace and the Americans with Disabilties Act  https://www.eeoc.gov/facts/pandemic_flu.html

New York State Actions & Resources:

New York State on PAUSE  https://coronavirus.health.ny.gov/home

Essential Businesses https://www.governor.ny.gov/news/governor-cuomo-issues-guidance-essential-services-under-new-york-state-pause-executive-order

An act providing requirements for sick leave and the provision of certain employee benefits when such employee is subject to a mandatory or precautionary order of quarantine or isolation due to COVID-19

https://nyassembly.gov/leg/?default_fld=&leg_video=&bn=A10153&term=2019&Summary=Y&Memo=Y&Text=Y

https://paidfamilyleave.ny.gov/covid-19-paid-leave-guidance-employers

Abatement of penalties and interest for sales and use tax due to COVID-19 https://www.tax.ny.gov/pdf/notices/n20-1.pdf

New York State Economic Development Council http://www.nysedc.org/event/covid-19-updates-and-resources/

Empire State Development https://esd.ny.gov/esd-covid-19-related-resources

 Local Resources:

Long Island Association (LIA) http://www.longislandassociation.org/

Suffolk County Business Recovery Unit  https://suffolkcountyny.gov/Departments/Economic-Development-and-Planning/Business-Recovery-Unit

-Survey https://suffolkcountyny.force.com/public/request/DOLBUSIMP/details

Suffolk County Chambers of Commerce https://www.suffolkchambers.org/events/detail/covid-19-suffolk-county-disaster-relief-information-11079

NOTICE REGARDING CONTINUED ACCESS, SERVICES AND CONTACT INFORMATION DURING STATE OF EMERGENCY

Like most other businesses during the State of Emergency, our firm has switched to remote schedules until the emergency has lifted.
We have received questions about the ability for law firms to function during the State of Emergency.  Please be assured that our attorneys are available full time to continue all services, though of course there are some necessary modifications to comply with State mandates:
  • Estate planning and will executions will continue, with modifications to account for limits on in-person contacts.
  • Real estate transactions are continuing, also with modifications as needed due to governmental office closings and limited in-person contacts.
  • Litigation services are still available while the physical courthouses are closed, though there are limits for non-electronic filings and in-person applications for non-emergency situations.
  • Business planning and advice continues to be available during this uncertain period.
  • Land use planning and municipal work continues while the local governments work out the modified procedures for processing the applications.
The situation has been changing for these various areas on an almost daily basis, but our lawyers are monitoring all changes as they are announced and making the necessary adjustments to ensure that our ability to provide these services will continue with the least interruption.
For existing clients, please know that all of our attorneys remain available to you and are continuing to work on your matters, though the method of contacts may be modified due to the switchover to remote offices.  We recommend emailing as the initial form of contact, but telephonic and video conferencing is available.   Messages can also be left on individuals’ voice mailboxes, and the messages will be forwarded to them via email.
For new clients, please direct your initial inquiries to the following attorneys, either by email or voicemail message:
Carmela M. Di Talia – real estate, estate planning and wills, business planning, and estate administration/probate.  Email: cditalia@ehalaw.com Voicemail: 631-369-1700 Extension 321
Anthony C. Pasca – litigation, real estate, land use planning and zoning, municipal law questions.  Email: apasca@ehalaw.com Voicemail: 631-369-1700 Extension 314
Stephen R. Angel – litigation & contested probate, all other matters.   Email: sangel@ehalaw.com Voicemail: 631-369-1700 Extension 323

February 25, 2020

The Supreme Court, Suffolk County (Hon. William G. Ford) has dismissed a “SLAPP” suit filed against parties who were challenging neighbors’ development applications in Reeve v. AndesSuffolk Index No. 622900/2018.  The 14-page decision reviews the origins of the protections against SLAPP suits (a strategic litigation against public participation), including the need to protect First Amendment rights, and thoroughly discusses the anti-SLAPP statutes and case law that has developed over the past three decades to avoid intimidation of those who speak out at public meetings.   Turning to the particulars of the Reeve case, the court agreed with the defendants that they fell within the protection of the anti-SLAPP laws and that the plaintiffs failed to sustain their burden of proving that the SLAPP suit nonetheless had substantial merit to avoid dismissal.  The court also granted the defendants summary judgment as to the plaintiffs’ liability on the defendants’ counterclaims, and it directed the parties to proceed to an inquest to determine the amount of attorney’s fees, costs, disbursements and/or compensatory and punitive damages.  EHADP represented the defendants in the Reeve case, and a copy of the decision is available here.

February 13, 2020

EHADP Partner Christine Perrucci Smith participated as a panelist at a Press Sessions event hosted by The Press News Group at Rowdy Hall in East Hampton.  The panel discussed the impacts that the new N.Y. State landlord-tenant laws are having on the local rental market and also explored the pros and cons of online competitors, such as Airbnb.   Christine discussed the impact that the laws are having on landlords, including their willingness to engage in the rental market in light of the new regulations.  She also explained the new, rather strict statutory requirements governing tenant’s rights to inspections and the return of the security deposit.  The event was well attended by over 60 members of the community, including fellow attorneys, brokers, business owners, and landlords.  The audience was engaged and actively participated with the panelists in discussing these recent changes in the local rental market

January 8, 2020

The Supreme Court, Suffolk County has upheld a decision of the Zoning Board of Appeals for the Village of Westhampton Beach in Propper v. Zoning Board, Index No. 3055/2019.  The case involved a variance application made to the ZBA to allow a 10-foot relaxation of a 30-foot side yard setback requirement for a single-family home.   The driving force for the variance application was the existence of wetlands on the property — in order to maximize the setback from the wetlands to the south, the owner sought to reduce the setback from the lot line to the north.  The ZBA, after weighing the benefits and detriments of the proposal, granted the variance, citing, among other things, the environmental benefits that result from the increased wetland setback.  When the neighbor adjacent to the northerly lot line sued, the Honorable William B. Rebolini of the Supreme Court agreed that the ZBA’s decision rationally weighed the various factors before granting the variance.  In particular, Justice Rebolini, citing Wambold v.  Village of Southampton Zoning Board, 140 A.D.3d 891 (2016), agreed that the ZBA rationally concluded that “significant environmental benefits would inure to the Village as a whole by increasing the setback from the wetlands….”

November 19, 2019

EHADP partner Christine Perrucci Smith and counsel Lisa J. Ross gave a presentation to the East End community at the Southampton Business Alliance breakfast meeting on the recent statutory amendments to New York landlord-tenant laws. The presentation addressed how the Housing Stability and Tenant Protection Act of 2019 is changing various aspects of the landlord-tenant relationship in New York, including such topics as collection of security deposits and advanced rent, new notices addressing late payments and non-renewal of a lease required of the landlord, and the additional delay which will likely be caused during eviction proceedings. The event was well-attended by over 70 members of the community, including real estate brokers, business owners, landlords, and members of the local press.  Thank you to partner Lisa D. Tymann for coordinating the event with the Southampton Business Alliance.

September 1, 2019

The firm congratulates Amanda Star Frazer, Christine Perrucci Smith and Lisa D. Tymann on becoming partners.  Amanda, Christine, and Lisa have worked with EHADP for several years, each bringing to the firm a variety of experiential knowledge from their prior practices, as well as growing and expanding their practices to better serve the community in the East End of Long Island.  Amanda’s practice as a litigation attorney includes handling a variety of commercial disputes; real estate, title and land use cases; and contested estate matters.  Christine’s practice focus is in the areas of real estate, corporate, and estate administration.  Lisa’s work in the firm’s transactional practice areas includes estate planning, trust and estate administration, real estate and corporate work.

August 19, 2019

The firm is pleased to welcome Kimberly A. Oringer as Associate Attorney.   Kimberly previously worked as in-house counsel to a commercial lender and other New York firms. Kimberly attended Vanderbilt University and Hofstra Law School, where she served on its Law Review.  She will be practicing as part of the firm’s litigation and land use practice groups.