New York State Senate Considers Rent Relief Bill

Morrison & Foerster LLP

Morrison & Foerster LLP

New York State Senate Bill 8125-A, introduced on March 23, 2020 by Senator Michael Gianaris (D), proposes to provide rent relief to New Yorkers affected by the outbreak of the coronavirus (COVID-19).

S.B. 8125-A would suspend for 90 days rent payments for residential tenants and small business commercial tenants who have lost income or have been forced to close their businesses as a result of the government-ordered restrictions in response to COVID-19. Such tenants’ obligation to pay rent would be waived, and such tenants would not be required to repay their rent at a later time. Landlords would not be allowed to charge late fees, and any leases set to expire during this time would be subject to automatic renewal at the current rent charged. Additionally, any landlord facing a “financial hardship” after being deprived of rent payments as a result of the bill would receive forgiveness on any mortgage payments for such property for 90 days, based on a calculation of the percentage, and up to the total amount, of lost rent. The bill does not propose relief for the lenders holding the applicable mortgage loans.

The bill is currently in committee in the Senate, and has not yet been considered for amendment or a vote by the full Senate. The bill has gained the support of about 23 (of 63 total) state Senators, as well as some New York City officials. An identical bill has been introduced in the Assembly, where it is also currently in committee and subject to the same process as in the Senate. Governor Cuomo has not expressed support for the bill, reportedly saying that a 90-day moratorium on evictions is sufficient, so it is not clear whether he would sign the bill into law.

Landlord groups, like the Community Housing Improvement Program, have expressed doubt as whether the bill as currently drafted would be signed into law, citing potentially fatal ambiguities. Tenants’ rights groups such as Housing Justice for All have expressed support for the bill, but call for an even longer period of rent suspension. Given the controversial nature of the bill, the brevity of its text, and substantial ambiguities in its wording, if enacted, S.B. 8125-A would likely be challenged by a number of interested groups and possibly would be subject to a constitutionality challenge.

We will continue to monitor the progress of this bill and any changes to it, and will provide a further update if it passes.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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