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.