Gottfried, Simon, Carroll, Steck, Frontus, Seawright, Barron, Perry, Dickens, Taylor, Bronson,
Richardson, Hunter, De La Rosa, Kim, Barnwell, Anderson, Rozic, Kelles, Niou, Forrest, Mamdani,
Gallagher, Cruz, Gonzalez-Rojas, Zinerman, Rodriguez
MLTSPNSR
Relates to suspending rent payments for certain tenants due to the state of emergency declared by Executive Order No. 202, where they have lost earned income or were forced to close their place of business; requires landlords to accept 20 percent or one-third of contractual rent each month; requires the superintendent of the department of financial services to establish and implement an interim commercial rent relief program to support covered tenants and landlords impacted by the COVID-19 pandemic.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A3190
SPONSOR: Epstein TITLE OF BILL:
An act to suspend rent payments for certain tenants in response to the
outbreak of coronavirus
SUMMARY OF PROVISIONS:
Section 1 of the bill defines the terms used throughout the act.
Section 2 of the bill establishes that covered tenants (not-for-profits
and small businesses with 25 or fewer employees) that have been forced
to close or whose business activities have been substantially curtailed
resulting in a loss of income as a result of government-ordered
COVID-related restrictions are responsible for rent payments up to 20
percent of their income or one third of their contractual rent, whichev-
er is less. This section of the bill also prescribes the system by which
such payments may be authorized, and establishes that payments made
pursuant to the act may be raised as a defense to a non-payment proceed-
ing.
Section 3 of the bill directs Empire State Development (ESD) to estab-
lish a commercial rent relief program to support covered tenants and
landlords impacted by COVID-19 and provides that at least $500,000,000
in funds, including but not limited to funding received from the federal
government, be allocated for such program. The process by which certain
landlords may apply for relief is established.
Section 4 of the bill provides that no court may accept a petition for
proceedings for non-payment or to recover possession of real property
rented by covered tenants for at least 30 days following the expiration
of state of emergency.
Section 5 provides the effective date.
JUSTIFICATION:
For many small businesses and non-profits, rent payments even in a
favorable economic climate present a burden. During the unprecedented
economic downturn caused by the COVID-19 pandemic, these tenants are
suffering as a result of state mandates forcing them to close and/or
curtail their operations. With reduced revenues, meeting rent demands in
full have become impossible for many small businesses and non-profits,
posing an existential threat. This bill offers a framework for sharing
the burden of this crisis among tenants, landlords, and government.
PRIOR LEGISLATIVE HISTORY:
S.8865 of 2020 (Hoylman): Died in Rules A.10901 (Epstein): Died in Small
Business
FISCAL IMPLICATIONS:
To be determined.
EFFECTIVE DATE:
This act shall take effect immediately and shall be deemed to have been
in full force and effect on and after March 7, 2020.
STATE OF NEW YORK
________________________________________________________________________
3190
2021-2022 Regular Sessions
IN ASSEMBLY
January 22, 2021
___________
Introduced by M. of A. EPSTEIN, GOTTFRIED, SIMON, CARROLL, STECK, FRON-
TUS, SEAWRIGHT, BARRON, PERRY, DICKENS, TAYLOR, BRONSON, RICHARDSON,
HUNTER, DE LA ROSA, KIM, BARNWELL, ANDERSON, ROZIC, KELLES -- read
once and referred to the Committee on Small Business
AN ACT to suspend rent payments for certain tenants in response to the
outbreak of coronavirus
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. For the purposes of this act:
2 (a) "actual income" means for a not-for-profit corporation employing
3 twenty-five or less full-time employees or full-time equivalent employ-
4 ees or for a small business incorporated and resident in this state,
5 independently owned and operated, not dominant in its field, and employs
6 twenty-five or less full-time employees or full-time equivalent employ-
7 ees, all revenue, including emergency federal, state or local assist-
8 ance, or any other form of income that may be used to pay rent, but
9 excluding restricted grants;
10 (b) "landlord" means the person or entity to whom a covered tenant
11 owes rent;
12 (c) "rent" means the amount charged in consideration for the use and
13 occupancy of real property pursuant to a written or oral rental agree-
14 ment or statute;
15 (d) "state of emergency" means the state of emergency declared by
16 executive order 202 that began on March 7, 2020 and any further amend-
17 ments or modifications, and as may be further extended pursuant to
18 section 28 of the executive law;
19 (e) "covered tenant" includes a tenant that is a not-for-profit corpo-
20 ration employing twenty-five or less full-time employees or full-time
21 equivalent employees, or a tenant that is a small business incorporated
22 and resident in this state, independently owned and operated, not domi-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02356-02-1
A. 3190 2
1 nant in its field, and employs twenty-five or less full-time employees
2 or full-time equivalent employees; and
3 (f) "covered period" means March 7, 2020 until the date on which none
4 of the provisions that closed or otherwise restricted public or private
5 businesses or places of public accommodation, or required postponement
6 or cancellation of all non-essential gatherings of individuals of any
7 size, for any reason in Executive Orders 202.3, 202.4, 202.5, 202.6,
8 202.7, 202.8, 202.10, 202.11, 202.13 or 202.14, as extended by Executive
9 Orders 202.28 and 202.31 and as further extended by any future Executive
10 Order, issued in response to the COVID-19 pandemic continue to apply in
11 the county in which the covered tenant is located.
12 § 2. (a) (i) Notwithstanding any other provision of law, rule or regu-
13 lation to the contrary, any covered tenant in the state that has been
14 forced to close their place of business, or whose business activities
15 have been substantially curtailed resulting in a loss of income as a
16 result of government ordered restrictions in response to the outbreak of
17 coronavirus disease 2019 (COVID-19), shall be responsible for rent
18 payments up to twenty percent of the covered tenant's actual income for
19 the thirty days prior to the date such rent was due or one-third of
20 their contractual rent, whichever is less, per month for the duration of
21 the covered period through one hundred eighty days following the final
22 day of the covered period. A landlord of a covered tenant shall waive
23 twenty percent of the contractual rent per month for the duration of one
24 hundred eighty days following the final day of the covered period.
25 (ii) Where a covered tenant is authorized to pay an amount that is
26 less than their contractual or statutory rent pursuant to this act, the
27 covered tenant shall provide the landlord and the department of economic
28 development with a sworn affidavit affirming the covered tenant's actual
29 income for the thirty days prior to the date such rent was due for each
30 month for which the tenant is seeking a reduced payment of rent due to
31 loss of income as a result of government ordered restrictions in
32 response to the outbreak of coronavirus disease 2019 (COVID-19). Upon
33 the verification of such statement by the commissioner of the department
34 of economic development or his or her agent, such payment shall absolve
35 the covered tenant of any further obligation to pay rent and any differ-
36 ence between the rent that would have been contractually or statutorily
37 owed and the amount paid pursuant to this paragraph shall be waived,
38 except where a covered tenant later receives additional income, such
39 rent obligations shall be recalculated.
40 (iii) In a summary proceeding for the non-payment of rent under arti-
41 cle 7 of the real property actions and proceedings law, a covered tenant
42 may raise a payment made pursuant to this act as a defense to non-pay-
43 ment. If the amount of the covered tenant's actual income is in dispute,
44 the court shall review documentation of the covered tenant's income in
45 camera, unless otherwise deemed necessary by the court. Notwithstanding
46 any other provision of law to the contrary customary documentation of
47 income shall constitute prima facie evidence of the covered tenant's
48 actual income and shall be presumptively admissible in such summary
49 proceeding.
50 (b) Any covered tenant whose lease expires during the covered period
51 shall have the option of extending such lease under the terms existing
52 prior to the expiration of the lease for a period of up to one hundred
53 eighty days after the expiration of the state of emergency.
54 (c) Late fees, interest or other penalties shall not be collectable
55 for rent accrued during the existence of the state of emergency.
A. 3190 3
1 § 3. (a) The commissioner of the department of economic development is
2 hereby authorized and directed to establish and implement an interim
3 commercial rent relief program to support covered tenants and landlords
4 impacted by the COVID-19 pandemic. Such program shall be provided at
5 least $500,000,000, including but not limited to monies that have been
6 allocated to the state of New York by the federal government.
7 (b) Notwithstanding any other law to the contrary, a landlord that has
8 lost rental income pursuant to this act and has not been fully compen-
9 sated by emergency federal, state or local assistance, may apply to the
10 department of economic development for relief. The commissioner of the
11 department of economic development may, upon satisfaction of the veraci-
12 ty of the landlord's application and to the extent possible, authorize
13 the distribution of funds, including but not limited to any unrestricted
14 federal emergency assistance monies provided to the state that have not
15 otherwise been obligated, to any such landlord in the amount of the
16 balance of rental income lost after the twenty percent of the contractu-
17 al rent waived by the landlord and any amount paid by a covered tenant
18 pursuant to section two of this act.
19 (c) The commissioner of the department of economic development shall
20 promulgate rules and regulations to effectuate the provisions of this
21 act. The regulations promulgated pursuant to this subdivision shall
22 include provisions designed to ensure full access to the services and
23 financial assistance required under this section by individuals for whom
24 English is not the primary language.
25 § 4. Notwithstanding any other law to the contrary, no court shall
26 accept for filing a petition to commence a new summary proceeding to
27 recover possession of real property under article 7 of the real property
28 actions and proceedings law for non-payment of rent due to loss of
29 income as a result of government ordered restrictions in response to the
30 outbreak of coronavirus disease 2019 (COVID-19) for at least thirty days
31 following the expiration of the state of emergency; provided any statute
32 of limitations applicable to such summary proceedings shall be tolled
33 for thirty days; provided further, however, that the tenant shall
34 provide a sworn affidavit affirming the covered tenant's loss of income
35 as a result of government ordered restrictions in response to the
36 outbreak of coronavirus disease 2019 (COVID-19). In no event shall late
37 or reduced rent payments during the state of emergency constitute the
38 basis for a summary holdover proceeding for the chronic nonpayment of
39 rent.
40 § 5. This act shall take effect immediately and shall be deemed to
41 have been in full force and effect on and after March 7, 2020.
