Executive Order Provides Relief for Tenants and Property Owners Impacted by COVID-19

Executive Order Provides Relief for Tenants and Property Owners Impacted by COVID-19

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June 16, 2020 – By Exec. Order 202.28 Landlords are prohibited from initiating commercial evictions by Governor Cuomo’s executive order.  The original expiration of that prohibition was extended from early June to August 20, 2020.  The tenant only has to show financial hardship.

Executive Order 202.28  There shall be no initiation of a proceeding or enforcement of either an eviction of any residential or commercial tenant, for nonpayment of rent or a foreclosure of any residential or commercial mortgage, for nonpayment of such 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 for a period of sixty days beginning on June 20, 2020.

New York City has enacted several relevant measures:

  1. Intro. 1914-A designates threatening a commercial tenant based on its status as a COVID-19 impacted business a form of harassment, effective immediately. This includes businesses that were subject to capacity restrictions, were forced to close, or business owners who contracted the virus.
  2. Intro. 1936-A expands the definition of tenant harassment to protect tenants from threats based on status as an essential employee or being impacted by COVID-19.These two laws protect tenants from discrimination based on their being ill with the virus or working in jobs where exposure to the virus is greater than for others.
  3. Intro. 1932-A protects commercial tenants’ and guarantors’ personal assets by temporarily prohibiting the enforcement of personal liability provisions in commercial leases or rental agreements involving COVID-19 impacted tenants. Threatening to or attempting to enforce such a provision will be considered a form of harassment, effective immediately. Full text:file:///C:/Users/wpw/Downloads/Legislation%20Details%20(With%20Text).pdfBe it enacted by the Council as follows: Section 1. Chapter 10 of title 22 of the administrative code of the city of New York is amended by adding a new section 22-1005 to read as follows:

    § 22-1005. Personal liability provisions in commercial leases. A provision in a commercial lease or other rental agreement involving real property located within the city that provides for one or more natural persons who are not the tenant under such agreement to become, upon the occurrence of a default or other event, wholly or partially personally liable for payment of rent, utility expenses or taxes owed by the tenant under such agreement, or fees and charges relating to routine building maintenance owed by the tenant under such agreement, shall not be enforceable against such natural persons if the conditions of paragraph 1 and 2 are satisfied:

    1. The tenant satisfies the conditions of subparagraph (a), (b) or (c): (a) The tenant was required to cease serving patrons food or beverage for on-premises consumption or to cease operation under executive order number 202.3 issued by the governor on March 16, 2020; (b) The tenant was a non-essential retail establishment subject to in-person limitations under guidance issued by the New York state department of economic development pursuant to executive order number 202.6 issued by the governor on March 18, 2020; or (c) The tenant was required to close to members of the public under executive order number 202.7 issued by the governor on March 19, 2020.
    2. The default or other event causing such natural persons to become wholly or partially personally liable for such obligation occurred between March 7, 2020 and September 30, 2020, inclusive.

Each business (including the business of being a landlord) is required by the Governor’s executive order to develop a Safety Plan outlining how its workplace will prevent the spread of COVID-19 once it opens. This plan does not need to be submitted to a state agency for approval but it has to be in writing and it has to be retained on the premises of the business and be available to inspectors of the NYS or NYC Departments of Health.

There’s a Safety Plan template on the governor’s website which gives people guidance, but businesses are not required to use the template. Template for Safety plan:
https://www.governor.ny.gov/sites/governor.ny.gov/files/atoms/files/NYS_BusinessReopeningSafetyPlanTemplate.pdf

There is guidance on how to safely return to work from both the Center for Disease Control and the New York State Dept. of Health.

https://www.cdc.gov/coronavirus/2019-ncov/community/organizations/cleaning-disinfection.html

In New York, a bill is winding its way through the assembly and the senate that would require insurers to interpret business interruption policies to include coverage for closures arising from the virus.  It has been a hotly debated issue whether typical policies include coverage for the virus since there is no element of property damage associated with the virus.

BILL NO             A10226B

(c)  Every policy of insurance or endorsement thereto insuring against an insured’s business  income  loss  resulting  from  loss,  damage, or destruction  of  property owned by others, including direct suppliers of goods or services to the insured and/or direct  receivers  of  goods or services  manufactured or provided by the insured, shall be construed to include among the covered perils under that policy, coverage for contingent business interruption during a period of a declared state emergency due the coronavirus disease 2019 (COVID-19) pandemic.