In January 2021, Governor Andrew F. Cuomo announced a proposal to bolster protections for commercial tenants in New York. The Governor, at that time, announced that he would be proposing legislation to extend the moratorium on commercial evictions, rather than just issuing an additional executive order as the Governor had been doing since March 2020.
On February 28, 2021, the most recent commercial moratorium on evictions issued by executive order expired. However, on March 9, 2021, Governor Cuomo signed the Covid-19 Emergency Protect Our Small Business Act of 2021, which limits eviction and foreclosure actions for small businesses.
The Act applies to commercial eviction proceedings for commercial tenants that employ 50 or fewer persons. The Act explicitly bars self-help by a landlord against the commercial tenant through at least May 1, 2021. The Act is similar to residential protections in that the Act requires a pre-eviction notice, which includes a hardship declaration to be served on the commercial tenant. The hardship declaration language is explicitly set forth by statute and a sample of a hardship declaration is available on the court’s website.
The hardship declaration gives commercial tenants an opportunity to stay an eviction or foreclosure proceeding or action through May 1 if one of three events apply:
1. Significant loss of revenue during the COVID-19 pandemic
2. Significant increase in necessary expenses related to providing personal protection equipment to employees, and purchasing and installing other protective equipment to prevent the transmission of COVID-19 within the business
3. Moving expenses, and difficulty in securing alternative commercial property, make it a hardship for the business to relocate to another location during the COVID-19 pandemic
If the qualified business submits the hardship application to the landlord, then the proceeding is stayed through at least May 1, 2021. Any pending proceedings are stayed for 60 days from March 9, 2021, to give a commercial tenant an opportunity to provide a hardship declaration when necessary.
In the event that an eviction warrant or a judgment was issued prior to March 9th, 2021 which is the effective date of the Act, the court is required to stay execution of the warrant of eviction or judgment until the court has held a status conference with the parties. The warrant of eviction is required to include various statements from the Act in the body of the warrant. Effectively, the Act does not permit very much movement in commercial eviction proceedings through at least May 1, 2021.
The Law Offices of Jordi Fernandez
420 Lexington Avenue, Suite 455
New York, NY 10170