TENANT SAFE HARBOR ACT
On June 30, 2020, Governor Andrew Cuomo signed into effect the Tenant Safe Harbor Act, the aim of which is to help keep residential tenants in their homes following the COVID-19 pandemic by allowing only money judgments, and not evictions, for unpaid rent that comes due while restrictions are in place due to COVID-19 on businesses, public accommodations, and nonessential gatherings.
The Act prohibits the issuance of a warrant of eviction or judgment of possession against a residential tenant who has suffered a financial hardship for the non-payment of rent that accrues or becomes due during the COVID-19 covered period. Notably, this legislation shifts the burden from the landlord’s previous requirement to conduct an investigation prior to the commencement of a proceeding to the tenant to raise an affirmative defense.
The Act defines the “COVID-19 covered period” as the time period commencing March 7, 2020 and continuing until any executive orders and extensions thereof which have been issued related to the COVID-19 pandemic permanently expire – a future date which no one can predict at this time.
The considerations that will be taken into account in order to determine whether this Act is applicable must be addressed on a case-by-case basis and the onus is on the tenant or lawful occupant to raise such a defense to a summary proceeding for the non-payment of rent and the tenant would have to make a showing that he/she suffered a financial hardship during the covered period. The Act does take into consideration that merely claiming financial hardship is not enough and the Courts are directed to consider:
(i) the tenant’s or lawful occupant’s income prior to the COVID-19 covered period;
(ii) the tenant’s or lawful occupant’s income during the COVID-19 covered period;
(iii) the tenant’s or lawful occupant’s liquid assets; and
(iv) the tenant’s or lawful occupant’s eligibility for and receipt of cash assistance, supplemental nutrition assistance program, supplemental security income, the New York State disability program, the home energy assistance program, or unemployment insurance or benefits under state or federal law.
The Act allows for the issuance of a monetary judgment to a successful landlord in such a proceeding where this defense is raised and proven. Our interpretation of this would allow a landlord to obtain a judgment of possession and the issuance of a warrant of eviction where a tenant was and remains gainfully employed or has had no changes in the receipt of any public assistance funds during the covered period. For example, an individual whose source of income and source of rent payment comes from a combination of Section 8 and public assistance cash allowance would still remain eligible for eviction if they have failed to make payment of rent during the covered period.
The largest number of tenants which are likely to be affected are those who have had their employment status changed as a result of the COVID-19 pandemic. The Legislature also included lawful occupants in this Act, which will necessarily widen the number of people to whom this defense is available. We foresee a large number of tenants raising this defense if any member of their household, whether they contributed to the rent in the past or not, has been financially impacted by the pandemic.
As always, there is a level of discretion given the Courts in the weight each factor can be given and judicial interpretation is likely to vary. However, raised as an affirmative defense, this will allow landlords to seek discovery into the finances of tenants, which may allow us to use past cases against an individual tenant to show that their history precludes a determination of COVID-19-specific financial hardship. We would also explore whether the receipt of unemployment benefits actually allowed the tenant to receive a higher level of income they otherwise would have received outside of the pandemic, given the additional federal unemployment insurance payments made during the pandemic.
It should also be noted that an ejectment action brought in the Supreme Court would not fall under this Act. While Supreme Court actions are generally more costly and time-consuming, we believe that this could be an effective option in some cases in the current legal climate. We are happy to discuss the merits of each case with you individually to ensure that the best course of action is being taken to maximize the end result you are seeking.