NY Atty Confusion, Concern Around New Virus Eviction Rule

By Emma Whitford
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Law360 (May 13, 2020, 9:52 AM EDT) -- Attorneys for both tenants and landlords in New York have their eyes set on June 20, as they try to plan for a new executive order from Gov. Andrew M. Cuomo amending rules for commercial and residential evictions during the coronavirus pandemic. 

The order, effective for 60 days starting in late June, is narrower than the current pandemic eviction moratorium, a blanket order barring all residential and commercial evictions. Some attorneys fear it could prompt a chaotic deluge of filings.

One major change, tenant attorneys told Law360, is that tenants facing nonpayment charges will have to demonstrate either that they are eligible for unemployment insurance or benefits, or that they are facing financial hardship because of COVID-19.

The order states that there "shall be no initiation of a proceeding" to evict for nonpayment against "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."

"What Cuomo is proposing beginning June 20 is not a moratorium but is prohibiting certain types of cases," Marika Dias, managing director of the Safety Net Project at the Urban Justice Center, told Law360. "What that means in practice is that it's going to shift the onus onto the tenants to make sure they fit into that category."

"People who get unemployment insurance, they'll be able to show that," said Judith Goldiner, attorney-in-charge of the civil law reform unit at the Legal Aid Society. "But not if, let's say, you're in the gray economy, you're working off the books, you're a babysitter."

The order also does not address holdover proceedings, a broad category of eviction cases that can be brought against tenants who rent month-to-month, or who have allegedly violated a lease term.

"For tenants who are facing holdover cases the new executive order offers them nothing," Dias said.

This could be particularly challenging for small businesses, according to Paula Segal, a senior staff attorney at TakeRoot Justice.

"Small business leases often have a clause in them that makes nonpayment of rent a default that terminates the lease," she said.

Meanwhile, landlord attorneys offered conflicting interpretations of the executive order.

Claude Szyfer, partner with Stroock & Stroock & Lavan LLP, represents landlords and trade associations, including the Real Estate Board of New York.

"I don't see this provision as allowing the filing of cases on June 20, and see this language as pushing the moratorium into August," he said.

Landlord attorney Nativ Winiarsky, partner with Kucker Marino Winiarsky & Bittens LLP, said the wording of the order is too confusing to plan around. He shared an email he sent to New York Civil Court Administrative Judge Anthony Cannatoro this week seeking clarification on the executive order.

Questions included whether the onus is on landlords to request financial documents from tenants, and, if so, whether the courts would lift a bar on discovery in so-called summary proceedings common in housing court; what documents qualify as proof of financial hardship; what happens if tenants fail to respond; and whether landlords can issue 14-day rent demand notices under the executive order.

"There remains a cloud of uncertainty throughout the industry as to how these executive orders are to be interpreted and real estate parties must be able to rely on stability and certainty," Winiarsky told Law360.

The governor's office did not respond to a request for comment on attorney concerns.

In remarks last week, the governor described the new order as an extension of the current blanket eviction moratorium.

"We're going to extend… until Aug. 20," Cuomo told reporters. "So, no one can be evicted for nonpayment of rent, resident or commercial because of COVID until Aug. 20. Then, we'll see what happens."

REBNY, the real estate trade association, did not say whether members plan to pursue evictions under the order. However, the group said in a statement that only COVID-19-impacted tenants should have rent relief.

"City residents and small retailers directly impacted by the COVID-19 pandemic will need more time to pay their bills and more help from the federal government to do so," REBNY President James Whelan told Law360. "Those fortunate enough to have escaped the impact of this unprecedented public health and economic crisis do not need these protections, though."

Adding to attorneys' uncertainty is the relationship between the governor's office and the state Office of Court Administration.

"The order itself is inherently unclear procedurally, in terms of how the court system will implement it," Dias said. 

Chief Judge Lawrence K. Marks issued an order in late March suspending the filing of nonemergency cases. If Marks' order is renewed past June 20, new eviction cases could be precluded next month.

But OCA did not rule out the possibility of accommodating the governor's order in a statement to Law360.

"It is not clear at this time how long the [court] order will remain in place, but planning is underway on the best ways to accommodate these cases," spokesperson Lucian Chalfen told Law360. "A range of approaches are under consideration, including virtual proceedings and mediation. Stay tuned."

​​​​​​Last year, Goldiner noted, there were more than 1,600 residential evictions each month. By June 20, courts will have been shut down for about three months.

"Last year you would have expected 5,000 people to be evicted in this time," she said, predicting possible pressure on the courts this summer.

--Editing by Rebecca Flanagan.

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