News

COVID Changes Landlord Tenant-Relationship... Forever?

Aug 25, 2020

Landlords across New York State have felt the squeeze of increased government scrutiny for more than a year now, especially after sweeping and costly real property law changes were passed by the NY State Democrat-controlled legislature in June 2019. These changes were included in what is known as the HSTPA (Housing Stability and Tenant Protection Act). Even before landlords, lawyers or the courts could fully understand and incorporate these changes into the handling of disputes, the novel coronavirus pandemic called COVID-19 hit our shores and changed our lives.

Before COVID-19, the HSTPA laws aimed to stymie the eviction process, especially for non-payment, and further complicated the notification process for landlords. It also emboldened tenants to aggressively and without cause, push back against landlords knowing that the new eviction process outlined in HSTPA bought tenants more free time in their unit before a sheriff would demand their move-out. What used to be a one-month process then extended to two or three months. This process was quickly identified as not good for tenant nor landlord since it increased opportunity for damages, left tenants with larger judgments against their credit and left landlords with a mess and mostly uncollectable debt. To no avail, the law stands, and no modifications have been made.

Fast forward nine months, to the first quarter of 2020 and the first of 60 COVID-related Executive Orders (202.0 thru 202.59 plus 205 quarantine for travelers) passed by NY Governor Cuomo. This began on March 7 declaring, “a State disaster emergency for the entire State of New York. This Executive Order shall be in effect until September 7, 2020.” That end day is fast approaching, but we know better and are vigilantly aware that things could change tomorrow.

As COVID became a reality for landlords, the first order of business was sanitation, and sanitize we did. Landlords with common areas and shared-use facilities had to implement regular cleaning, put up signs, disallow use of shared amenities, and ask tenants to report illness to the county health department. Further executive orders identified essential and non-essential business and forced the closure of schools, businesses, and some public services, such as courtrooms. Of course, housing building maintenance was deemed essential. For tenants, hundreds of thousands of jobs were furloughed, lost, or modified, and everyone stayed in their homes for safety. Some worked from home and some applied for unemployment.

On March 20, Executive order 202.8 started the steep and costly downward trend for landlords with tenants who decided to stop paying their rents all together. The order stated, “There shall be no enforcement of either an eviction of any tenant residential or commercial, or a foreclosure of any residential or commercial property for a period of ninety days.” Translation for many tenants, “The governor said I don’t have to pay rent for 3 months, and you can’t evict me.” Neither the Governor nor other elected officials spent much time clarifying this misconception.

Landlords soon reported financial damages near 30% of lost rent in the month of March compared to a national average of 9% the year before. Today, damages for some are on the average near 40% of lost rent in NYS, with a significantly higher impact in NYC. Landlords have reported little to no significant relief from federal SBA loans, stimulus checks nor increased unemployment meant for now unemployed renters to pay the rent. Landlords were asked to work with tenants who claimed COVID-related financial hardship on payment arrangements or use of their security deposit to cover lost rent. However, tenant organizations immediately began protesting for cancelled rents, a sentiment shared by many lawmakers. Evictions are a last ditch effort by landlords to collect what is rightfully theirs, repossession of their property.

To add insult to injury, continuing Executive Orders have extended the eviction moratorium twice (currently extended to Oct 1) and in June, the legislature passed a law allowing for COVID-related hardship as a defense in court, which would have been good if courts resumed. A rent relief package of $100 million was offered to renter-applicants and within days, the fund was exhausted. Further frustration now extends to the courtrooms, which are waiting formal guidance from the Office of Court Administration and NYS Chief Judge Lawrence Marks on how to open safely, and how to handle eviction cases.

Judge Marks has written multiple memos regarding the treatment of eviction cases, requiring in some cases additional notification to tenants and opportunity for legal counsel to be provided to the tenant. Despite these procedural changes, many courts are not even scheduling a landlord-tenant dispute hearing. Some counties are requiring that all town courts defer evictions to the county court, causing further delay for landlords to get non-paying and hold-over tenants to court.  Other courts are simply not scheduling cases until after October 1.

According to an August 12 memo from Judge Marks, landlords can request furtherance of pre-COVID cases, those with scheduled appearances or warrants prior to March 17, in settlement conferences. Both parties must be represented by counsel and if a settlement cannot be reached without a judge, the matter will then be heard by a judge with no execution of warrants until after October 1. The can keeps getting kicked down the road. Now, what was a two-month process because of HSTPA is 6 months or more of unpaid rent with no end in sight.

Landlords cannot and should not have to foot the bill for tenants who willfully do not pay. There are programs available through public and non-profit agencies that can help tenants during this emergency, but tenants have to apply, qualify, and follow up with landlords. Starting with each counties Department of Social Services or Human Services, tenants who are behind on rent should contact these agencies for help and guidance.

If you are a tenant who has paid the rent with help from your stimulus or your unemployment, or a landlord who has offered to work with tenants during this time, you all deserve a medal of honor. There may very well be more of you than what meets the social-media eye. Share your story if you are a tenant or landlord who worked together through the pandemic to maintain your housing. Lawmakers are poised to pass more legislation that protects those who were not willing to compromise.Landlords across New York State have felt the squeeze of increased government scrutiny for more than a year now, especially after sweeping and costly real property law changes were passed by the NY State Democrat-controlled legislature in June 2019. These changes were included in what is known as the HSTPA (Housing Stability and Tenant Protection Act). Even before landlords, lawyers or the courts could fully understand and incorporate these changes into the handling of disputes, the novel coronavirus pandemic called COVID-19 hit our shores and changed our lives.

Before COVID-19, the HSTPA laws aimed to stymie the eviction process, especially for non-payment, and further complicated the notification process for landlords. It also emboldened tenants to aggressively and without cause, push back against landlords knowing that the new eviction process outlined in HSTPA bought tenants more free time in their unit before a sheriff would demand their move-out. What used to be a one-month process then extended to two or three months. This process was quickly identified as not good for tenant nor landlord since it increased opportunity for damages, left tenants with larger judgments against their credit and left landlords with a mess and mostly uncollectable debt. To no avail, the law stands, and no modifications have been made.

Fast forward nine months, to the first quarter of 2020 and the first of 60 COVID-related Executive Orders (202.0 thru 202.59 plus 205 quarantine for travelers) passed by NY Governor Cuomo. This began on March 7 declaring, “a State disaster emergency for the entire State of New York. This Executive Order shall be in effect until September 7, 2020.” That end day is fast approaching, but we know better and are vigilantly aware that things could change tomorrow.

As COVID became a reality for landlords, the first order of business was sanitation, and sanitize we did. Landlords with common areas and shared-use facilities had to implement regular cleaning, put up signs, disallow use of shared amenities, and ask tenants to report illness to the county health department. Further executive orders identified essential and non-essential business and forced the closure of schools, businesses, and some public services, such as courtrooms. Of course, housing building maintenance was deemed essential. For tenants, hundreds of thousands of jobs were furloughed, lost, or modified, and everyone stayed in their homes for safety. Some worked from home and some applied for unemployment.

On March 20, Executive order 202.8 started the steep and costly downward trend for landlords with tenants who decided to stop paying their rents all together. The order stated, “There shall be no enforcement of either an eviction of any tenant residential or commercial, or a foreclosure of any residential or commercial property for a period of ninety days.” Translation for many tenants, “The governor said I don’t have to pay rent for 3 months, and you can’t evict me.” Neither the Governor nor other elected officials spent much time clarifying this misconception.

Landlords soon reported financial damages near 30% of lost rent in the month of March compared to a national average of 9% the year before. Today, damages for some are on the average near 40% of lost rent in NYS, with a significantly higher impact in NYC. Landlords have reported little to no significant relief from federal SBA loans, stimulus checks nor increased unemployment meant for now unemployed renters to pay the rent. Landlords were asked to work with tenants who claimed COVID-related financial hardship on payment arrangements or use of their security deposit to cover lost rent. However, tenant organizations immediately began protesting for cancelled rents, a sentiment shared by many lawmakers. Evictions are a last ditch effort by landlords to collect what is rightfully theirs, repossession of their property.

To add insult to injury, continuing Executive Orders have extended the eviction moratorium twice (currently extended to Oct 1) and in June, the legislature passed a law allowing for COVID-related hardship as a defense in court, which would have been good if courts resumed. A rent relief package of $100 million was offered to renter-applicants and within days, the fund was exhausted. Further frustration now extends to the courtrooms, which are waiting formal guidance from the Office of Court Administration and NYS Chief Judge Lawrence Marks on how to open safely, and how to handle eviction cases.

Judge Marks has written multiple memos regarding the treatment of eviction cases, requiring in some cases additional notification to tenants and opportunity for legal counsel to be provided to the tenant. Despite these procedural changes, many courts are not even scheduling a landlord-tenant dispute hearing. Some counties are requiring that all town courts defer evictions to the county court, causing further delay for landlords to get non-paying and hold-over tenants to court.  Other courts are simply not scheduling cases until after October 1.

According to an August 12 memo from Judge Marks, landlords can request furtherance of pre-COVID cases, those with scheduled appearances or warrants prior to March 17, in settlement conferences. Both parties must be represented by counsel and if a settlement cannot be reached without a judge, the matter will then be heard by a judge with no execution of warrants until after October 1. The can keeps getting kicked down the road. Now, what was a two-month process because of HSTPA is 6 months or more of unpaid rent with no end in sight. If and when courts begin hearing COVID-related evictions, they will find that landlords are not without cause. They cannot pay their bills if a tenant does not pay the rent. 

Landlords cannot and should not have to foot the bill for tenants who willfully do not pay. There are programs available through public and non-profit agencies that can help tenants during this emergency, but tenants have to apply, qualify, and follow up with landlords. Starting with each counties Department of Social Services or Human Services, tenants who are behind on rent should contact these agencies for help and guidance.

If you are a tenant who has paid the rent with help from your stimulus or your unemployment, or a landlord who has offered to work with tenants during this time, you all deserve a medal of honor. There may very well be more of you than what meets the social-media eye. Share your story if you are a tenant or landlord who worked together through the pandemic to maintain your housing. Lawmakers are poised to pass more legislation that protects tenants who were not willing to compromise.