New Law Extends COVID-Related Eviction Protections
Tenants are still on the hook to pay back rent owed, but you may have to work out a payment plan....
On June 30, New York Governor Andrew Cuomo signed into law the New York Tenant Safe Harbor Act. The new law, sponsored by New York State Senators Brad Hoylman and Liz Krueger and State Assembly Member Jeffrey Dinowitz, provides protection from eviction to residential tenants in the state who have experienced financial hardship during the COVID-19 State of Emergency.
“Now that the Tenant Safe Harbor Act has been signed into law, those New Yorkers most affected financially during this pandemic will have immediate protection from eviction,” Hoylman said in a statement. “No single law can single-handedly solve the eviction crisis—but the Tenant Safe Harbor Act is a one crucial step to address the looming tidal wave of evictions.”
The law’s advocates see it as a way to keep people in their homes by creating a process for negotiation between owners and tenants to pay backlogged rent once the state-mandated eviction moratorium ends on Aug. 20.
Tenant Safe Harbor Act Basics
The legislation prohibits courts from issuing a warrant of eviction or judgment of possession against a residential tenant (or other lawful occupant) who has suffered a financial hardship during the period from March 7, 2020, and the complete reopening of the tenant’s region. A region is not deemed completely reopened until the expiration of all the Executive Orders restricting public and private businesses, places of public accommodation, and nonessential gatherings. None of the regions in the state are considered completely reopened at this time.
Unpaid Rent Accrues During ‘COVID-19 Period’
The new legislation doesn’t affect the previous Executive Order barring landlords from commencing eviction proceedings against tenants suffering from COVID-related financial hardships through Aug. 20, 2020. The law expands on the eviction protections already in place for residential tenants in New York during the COVID-19 pandemic.
Under Executive Order No. 202.28 issued on May 7, the State of New York has a moratorium on evictions until Aug. 20 for residential and commercial tenants experiencing hardship due to the COVID-19 pandemic. The Executive Order requires that:
there shall be no initiation of a proceeding or enforcement of either an eviction of any residential or commercial tenant, for nonpayment of rent or a foreclosure of any residential or commercial mortgage, for nonpayment of such mortgage, owned or rented by 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 for a period of sixty days beginning on June 20, 2020.
Prior to the new law, a residential tenant who was unable to pay rent during the COVID-19 crisis could potentially be evicted for nonpayment as soon as the eviction moratorium under the Executive Order ended. Now, as a result of the act, a court can never use unpaid rent that accrued during the COVID-19 period as the basis for a nonpayment eviction of a financially burdened tenant.
Tenant Must Prove Financial Hardship
A tenant may raise financial hardship during the COVID period as a defense in an eviction proceeding. Unlike the Executive Order, the new law applies only to residential tenants and not commercial tenants. The law makes it easier for tenants to prove that they suffered financial hardship during the applicable COVID-19 period than under the Executive Order, which applies only to tenants experiencing hardship caused by the coronavirus. The law requires that in determining whether or not a tenant suffered financial hardship during the COVID period, the court must consider, among other relevant factors:
- The tenant’s income before the COVID period;
- The tenant’s income during the COVID period;
- The tenant’s liquid assets; and
- The tenant’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.
Rent Is Not Waived or Abated
The new law doesn’t actually waive rent during the COVID-19 period. Residents are still on the hook to pay back what they may owe. The law doesn’t bar entry of a money judgment against a residential tenant for back rent.
While the law doesn’t waive or abate rents, it allows residential tenants who are facing financial hardships during the pandemic to remain in their homes and have some more time to pay back rent owed. An intended consequence of the act is to facilitate negotiations between owners and tenants for the payment of rent once the state-mandated eviction moratorium ends on Aug. 20.
Rent Relief Measures Under Executive Order No 202.28
The Tenant Safe Harbor Act doesn’t affect the previous Executive Order barring owners from commencing eviction proceedings against tenants suffering from COVID-related financial hardships through Aug. 20. As discussed in “How to Comply with Order Extending Eviction Moratorium,” other rent relief measures issued by the state apply. These include allowing renters to use their pre-paid security deposit for rent and banning fees for late payments.
Late fees. From March 20 until Aug. 20 owners may not demand, and are not entitled to, any payment, fee, or charge for late payment of rent.
Using security deposit for rent. If a residential tenant is eligible for unemployment insurance or benefits under state or federal law, or is otherwise facing COVID-19 financial hardship, he may (at his sole option) request that the owner apply his security deposit (including any accrued interest) to pay past due rent or future rent. To use a security deposit for rent payments, owners and tenants must execute a written agreement setting forth the terms. And the tenant will remain liable for any rent not covered by his security deposit.
It is solely the tenant’s option to enter into such an agreement, and the owner may not threaten or coerce the tenant into that agreement. Starting at least 90 days from the date the security deposit was first applied to a rent payment, the tenant must begin to replenish the security deposit at the rate of 1/12 of the amount used as rent per month. Alternatively, the Executive Order allows the tenant to purchase insurance that replenishes the security deposit—and the owner must accept that insurance as replenishment.