On July 1, 2020, Governor Andrew Cuomo signed The Tenant Safe Harbor Act. Specifically, the Act addresses forgiveness of rent for the “COVID-19 covered period,” although the Act does not forgive rent or “cancel rent.” What the Act does is prevent the entry of a judgment of possession in some circumstances during the COVID-19 covered periods. Specifically, the Act states:
No court shall issue a warrant eviction or judgment of possession against a residential tenant or other lawful occupant that has suffered a financial hardship during the COVID-19 covered period for the nonpayment of rent that accrues or becomes due during the COVID-19 coverage period.
This change deviates from the long-standing rule that financial hardship is not a defense to a non-payment proceeding. That change is not a surprise given that COVID-19 has changed the dynamic of the payment of rent in New York City.
The Act gives a tenant an affirmative defense of financial hardship during the COVID-19 covered period, as a defense in a summary proceeding under Article 7 of the Real Property Actions and Proceedings Law.
However, it’s not automatic. The Act requires the courts to make a determination, if raised, on whether the tenants suffered financial hardship during the COVID-19 covered period. And the Act says that the court shall consider, among other relevant factors:
1. The tenant’s or lawful occupant’s income prior to the COVID-19 covered period;
2. The tenant’s or lawful occupant’s income during the COVID-19 covered period;
3. The tenant’s or lawful occupant’s liquid assets; and
4. The tenant’s or lawful occupant’s eligibility for receipt of:
•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.
If a court determines that the tenant has suffered financial hardship after evaluating these factors, the court will bar the landlord from the entry of a judgment of possession, which is the mechanism that leads to the issuance of a warrant of eviction and the actual eviction. However, both landlords and tenants should be aware that the entry of a money judgment for these periods is not barred.
Finally, the question of what “the COVID-19 covered period” means is relevant here. Specifically, the COVID-19 covered period encompasses the periods of rent that accrue from March 7, 2020, through the start of phase four in New York City.
Both Landlords and Tenants can expect more changes in the months to come following COVID-19. Time will tell whether the landscape of eviction proceedings in New York City will change dramatically or not at all and whether it will be permanent or temporary.
Jordi Fernandez Law, P.C.
420 Lexington Avenue, Suite 2920
New York, NY 10170