NYC Courts Say No Commercial Evictions Before Sept. 4

By Emma Whitford
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Law360 (August 20, 2020, 12:55 PM EDT) -- Commercial tenants can't be evicted in New York City until Sept. 4 at the earliest, according to court guidance issued Thursday, but attorneys say evictions stemming from the financial fallout of the coronavirus pandemic will likely be delayed much longer. 

That's because Thursday's directive from Administrative Judge Anthony Cannataro also said that commercial eviction cases filed in civil court after March 17 "have been, and shall continue to be, stayed."

The stay for cases filed after March 17 will remain in place at least until Sept. 5, a court spokesperson said, when an order from Gov. Andrew Cuomo suspending filing deadlines comes up for renewal. Cuomo has continuously renewed the order for several months running. When these cases eventually do proceed, they'll have several procedural steps to go through. 

Fed up with delays in their pandemic matters, commercial landlords are already turning away from civil court, attorneys said. A total of 133 commercial eviction cases were filed there between June 22 and Aug. 16, according to the NYU Furman Center — an 85% drop over the same period last year.

As an alternative, commercial landlords are trying cases in state Supreme Court, where they can seek possession or money judgments. These cases take longer to resolve than summary proceedings in civil court, but are increasingly attractive.

"There is no such stay in effect in Supreme Court," Ally Hack of Warshaw Burstein LLP told Law360 by email. "So, landlords that want to hold tenants' feet to the fire, can still go that route (where things are predictable)."

Many commercial landlords are also negotiating directly with tenants, cutting out the courts entirely.

"We're extremely busy right now," Matthew Brett of Belkin Burden Goldman LLP said. "The practice has changed to negotiating a lot of rent deferral agreements."

Thursday's directive does make it easier to file new eviction cases in civil court, attorneys acknowledged, even if they're not progressing.

Today marks the expiration of Cuomo's May executive order, which barred commercial landlords from commencing certain types of eviction cases against tenants who experienced financial hardship because of COVID-19.

"Beginning August 20, 2020, the court will accept new filings in commercial eviction cases without an affidavit that [the] tenant is not facing financial hardship due to COVID-19, as that affidavit requirement is no longer in effect," the directive said.

Brett, of Belkin Burden, said that he will advise some clients to go ahead and file.

"There are going to be extraordinary delays once the courts are fully operational and I would advise certain clients to commence so they can get on line," Brett said.

Prepandemic commercial trials can also resume today, Judge Cannataro's directive said, noting that virtual trials are "strongly encouraged whenever possible."

Advocates for small businesses, meanwhile, say substantial rent relief is crucial and priority No. 1, regardless of how quickly eviction cases are moving through the courts.

There is no system of rent control for commercial tenants. Nor is there a right to a lease renewal. Many leases have a clause that says nonpayment of rent is a default that terminates the lease. Fighting it out can feel futile knowing there also is no right to counsel for commercial tenants.

"What the court is for in the commercial context is extra bullying," Paula Segal, a senior staff attorney with TakeRoot Justice, said. "Canceling rent obligations has got to be everybody's top legislative priority right now."

A recent survey by the Brooklyn Chamber of Commerce found that more than a quarter of businesses missed rent payments in July. The majority said they want support from the government in the form of rent relief.

"There are some landlords who will really follow through on getting an eviction through the courts, and that's obviously scary," said Karen Narefsky, a senior organizer with the Association for Neighborhood & Housing Development. "But it's just as scary to know that you can't pay rent."

Thursday's guidance comes on the heels of a statewide memorandum issued last week by Chief Administrative Judge Lawrence Marks, which extended a hold on residential evictions to at least Oct. 1.

--Editing by Abbie Sarfo.

Correction: An earlier version of this story misspelled the names of a judge and a law firm. The errors have been corrected.

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