Residential Building Laws of the COVID-19 Pandemic

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Residential Building Laws of the
COVID-19 Pandemic

Late Fees
No late fees can be charged from March 20th to August 20th 2020.
Executive Order 202.28 modifies Real Property Law §238-a(2).

Security Deposits
Executive Order 202.28 modifies Sections 7-107 and 7-108 of the General Obligations Law
to allow landlords and tenants or licensees of residential properties, “upon the consent
of the tenant or licensee,” to enter into a written agreement by which “the security
deposit and any interest due thereof, shall be used to pay rent that is in arrears or will
become due.”
Only tenants now eligible are those:
“eligible for unemployment insurance or benefits under state or federal law or are
otherwise facing financial hardship due to the COVID-19 pandemic.”

Tenants must replenish the security deposit, in monthly installments equal to
1/12 of the amount so applied, with payments commencing no less than 90 days
after the date of such application. Alternatively, such tenants may elect to “retain
insurance that provides relief for the landlord in lieu of the monthly security
deposit replenishment” and requires landlords to accept such insurance.
Repayment of Security Deposit:

NYC Guaranty Law
On May 27, 2020, the New York City Council enacted Int. 1932/2020 into law, an ordinance that is
“in relation to personal liability provisions of leases for commercial tenants impacted by COVID-
19.”
As to rent and other financial obligations that arose from March 7, 2020 through September 30,
2020 (“the Covid period”), landlords may never enforce personal guaranties of certain commercial
tenants.
Under the law, the guarantor is again liable for any rent or other charge defaults arising on or after
October 1, 2020.
This does not bar landlords from suing guarantors for rent and other financial obligations that
arose either before or after the Covid period.

NYC Guaranty Law
The economic defaults from which the guarantors are relieved of enforcement
include:
“utility expenses or taxes owed by the tenant under (the lease or rental
agreement), or fees and charges relating to routine building maintenance owed
by the tenant under” the lease or rental agreement.

NYC Guaranty Law
The bar on enforcement
of the guaranty is permanent.

However, the law is limited to very few categories of commercial businesses. The law
only applies to commercial leases that are in these categories: (1) restaurants and bars
banned by the Governor’s orders from on-premises food service; (2) retail
establishments shut down for being “non-essential”; (3) gambling facilities; (4) gym,
fitness centers and classes, and movie theaters; (5) hair dressers and other cosmetic
establishments. As to all of these, the enactment protects their guarantors whether or not
the business actually sustained a loss of income due to Covid.
NYC Guaranty Law

For example, it does not apply to residential occupancies, office space, medical and
quasi-medical establishments, religious facilities, spiritual consultants, repair shops
other than automobiles and bicycles, cleaners, storage facilities, museums, galleries.
All of the guarantors who do not qualify for relief under this new law, get no relief from
their guaranties, regardless of whether Covid did or did not impair their financial
condition.
NYC Guaranty Law

Short History of Pandemic Courts
While we could go through the wretched four month history of Executive Orders and Judicial
pronouncements, it is best to tell you where things are at the moment we are writing to you and to
leave the past to the past, as much as possible.

Civil Courts Today
The current situation starts with two laws the Legislature passed: one, passed at the beginning of the crisis, giving
the Governor authority to temporarily amend any New York law at all on his own without legislative oversight,
the other passed only a few days ago, changing the procedures for suing in residential proceedings.
First, we note, that although the Civil Court (of which Housing Court is a part) is continuing to prosecute
landlords for violations, it is still not accepting new cases landlords try to bring. As ever, landlord-tenant cases
start with buying an “index number.”
The Civil Court says that it will only sell index numbers to people who apply for them by mail (with no indication
as to how long it will take for the mail to be processed) or by ordering them on-line through the New York Court
System’s electronic service, NYSCEF. However, there is no NYSCEF in the Civil Court at all at present, although
its implementation has been promised to take place within the next two weeks.
Even with NYSCEF in place, however, in order for a case to run purely electronically, the tenant has to consent. If
there is no consent, the case will be on paper only and it is expected that all paper-driven cases will take an
extremely long time to process. Thus, as a practical matter, no cases can be started in the Civil Court (except to
prosecute landlords for repairs or lockouts).

The Court at Work: Expect Long Adjournments
The Civil Court is now beginning to work on old cases by video
conference, but only if there are lawyers on both sides and only for the
purpose of settling the case. There are no trials until July 27th.

A Prosecution by the State Attorney General
It has also been reported that the State Attorney General has settled by stopping them from
sending out residential notices a law firm for serving rent demands because the Governor’s
order prohibits “initiation of a proceeding or enforcement of either an eviction of any residential
or commercial tenant, for nonpayment of rent.”

On June 30th, the Tenant Safe Harbor Act was signed into law.
The law prevents evictions for non-payment of rent during the Covid-19 period if a
residential tenant can prove financial hardship.
Tenant Safe Harbor Act

If the tenant raises Covid -19 Affects or Benefits as a
Defense, Cases can be prosecuted but only a money
judgement may be awarded and not an eviction.
Tenant Safe Harbor Act

1. On July 6th, Executive Order 202.48 appeared.
It ended the other Executive Orders prohibiting court actions dealing with rent--
Except it continued for 30 days, stopping commercial evictions and commercial foreclosures.
2. Affirmative Defense
A tenant would assert this as an affirmative defense.
Factors to be considered include the the tenant's lawful income prior to Covid-19, liquid assets, cash
assistance, supplemental nutrition assistance program, the New York State disability program and
unemployment insurance benefits under state or federal law.
3. Court Actions/Limitations
Courts may be commenced and prosecuted and judges must award money judgments for rent due but may
not allow evictions for residential cases. Evictions can be award for commercial cases.
4. How Long is the Law in Effect?
When signing the bill, Governor Cuomo issued an approval memorandum stating that any time a region
enters Phase 4, the protections of the bill expire.
The Governor's memorandum states that the law does not allow a tenant not to pay rent unless it faces a
financial hardship during the Covid-19 pubic heath emergency and such non-paying tenants will face any
appropriate legal action.
5. The Tenant Safe Harbor Act does not apply to commercial tenancies.
Commercial eviction notices should not be prohibited by this Executive Order.
Commercial Property Evictions

Bringing Housing Court Cases in
Supreme Court: Concurrent Jurisdiction

Executive Order extends until August 19, 2020 stopping residential lenders of
mortgage foreclosure proceedings for nonpayment by any borrower eligible for
unemployment insurance or benefits under state or federal law or otherwise
facing financial hardship due to COVID-19. The Order does not prohibit
foreclosures for reasons other than nonpayment.
Moratorium on Residential Mortgage Foreclosures

Moratorium on Residential Mortgage Foreclosures
1) Foreclosure matters can proceed when both parties represented by counsel for settlement
conferences.
2) Lenders may move for judgment of foreclosure when a property is vacant or abandoned.
3) No motions may be made or decided.
4) At or before August 20th will further directives be ordered.
5) 2 new forms must be filed with new cases when they are allowed to proceed.
(Memorandum from Lawrence K. Marks, Dated June 23, 2020).

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK -----------------------------------
---------------------X ELMSFORD APARTMENT ASSOCIATES, LLC, 36 APARTMENT ASSOCAITES, LLC,
and
66 APARTMENT ASSOCIATS, J.V.,
Plaintiffs,
v. 20-cv-4062 (CM)
ANDREW CUOMO, as Governor of the State of New York,
Defendant. --------------------------------------------------------X
ORDER DENYING PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT AND GRANTING
DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
McMahon, C.J.
Federal Case Finding Executive Orders Constitutional

III. EO 202.28 Does Not Violate Plaintiffs’ Rights Under the Contracts Clause.
Article I, Section 10 of the U.S. Constitution prohibits the states from passing any law “impairing the
Obligation of Contracts.” U.S. Const. Art. I § 10, cl. 1. “Although facially absolute, the Contracts Clause’s
prohibition ‘is not the Draconian provision that its words might seem to imply’ and does not trump
the police power of a state to protect the general welfare of its citizens, a power which is ‘paramount
to any rights under contracts between individuals.’ ”
Federal Case Finding Executive Orders Constitutional

Ownership is required to maintain the building common areas in compliance with
the public health code. See NYC Administrative Code, §17-133 (Penalties)
“Every person, corporation, or body that shall violate or not conform to any
provisions of the health code of the City of New York, or any rule or sanitary
regulation made, shall be liable to pay a penalty not exceeding the maximum
amount allowed by the health code of the City of New York.”
Duty to Keep Building Free of Covid-19:

A case involving an epidemic of scarlet fever), where the Court declared: We doubt not, if the
landlord was guilty of affirmative negligence, or negligently suffered acts to be done by which a
contagious disease was introduced into a thickly-populated hotel or tenement house, or, upon the
breaking out of a contagious disease upon the premises, if he, retaining and exercising a general
control over the public parts of the house, should negligently omit to take precautions to prevent
the spread of the epidemic, or otherwise to protect the tenants from contagion, when the means
lay within his power so to do, a case might be made which would avail as a justification for the
surrender of the premises. (Emphasis added). (Appellate Division, First Department).
Majestic Hotel v. Eyre, 53 AD 273, 65 NYS 745 (1st Dept. 1900)
Scarlet Fever Rulings

Held: tenant was justified in abandoning rental premises because landlord’s
affirmative acts, during the tenant’s occupancy, caused a nuisance dangerous to
life or health and against which the tenant was remediless by the performance of
any acts called for by the lease.
Scarlet Fever Rulings
Sully v. Schmitt, 147 NY 248 (1895)

Executive Order 202.34 authorizes building owners to deny admittance only to individuals who fail
to cover their nose and mouth with a mask or cloth face-covering.
Restriction of any other rights or amenities will face the same test of first, proving that ownership
or management went beyond the powers granted by the Executive Law, and second, that damages
occurred as a result of any proven breach of plaintiff’s contractual rights or of the warranty of
habitability.
Executive Order 202.34 expressly directs that any owner who denies admittance to persons, who
fail to cover their nose and mouth with a mask or cloth face covering, “shall not be subject to a
claim of violation of the covenant of quiet enjoyment.”

Sent By a Friend
XXXXXXXXX

Suing to Force Residents to Follow the Rules
Whether a landlord or a condominium board of managers or cooperative board of directors, or
their respective property managers or managing agents, may lawfully disclose, to other residents
of their buildings, the identity of an individual person infected with the Covid-19 virus, is
presently undetermined.
Nevertheless, as noted above, management itself may run the risk of violating the law by not
reporting such individuals to the Health Department. Adam Leitman Bailey, P.C. in May started an
emergency action in New York State Supreme Court against a resident refusing to follow the social
distancing Executive order inside the building.

Among the lessons taught so long ago by the Court in Majestic Hotel v. Eyre, supra, include the
following comments addressed to a tenant who abandoned his New York City apartment to “ride
out” a scarlet fever epidemic:
To constitute eviction, there must be possession by paramount title, or acts upon the part of the
landlord, or of those persons subject to his control, which make the occupancy so uncomfortable
that the tenant is justified in removing therefrom. There was in this case no claim of paramount
title in any other person, nor was there actual expulsion of the tenant from the premises; neither
was there any affirmative act upon the part of the landlord which required the tenant to remove.
Constructive Eviction During the Scarlet Fever

The plaintiff landlord sued to dispossess the
defendant tenant who had failed to pay the
rent due for August and September.
Law and Order during a Small Pox Outbreak
Beakes v. Haas, 36 Misc. 796, 74 NYS 843 (Supreme Court, New York County, Appellate Term 1901)

The Appellate Term stated “We are at a loss to discover how these facts establish an eviction of the
tenant or any defense whatever to the proceedings.”
The Court continued:
The tenant was not prevented from occupying the demised premises by any act of the landlord; on the
contrary, any deprivation of use was the result of the tenant’s misfortune in contracting a malignant
disease which required the health authorities, for the public good, to quarantine the tenant for a
reasonable time to prevent spread of the evil.
No attempt was made to prove the prevalence of a contagious disease in the house, nor does it appear
that the tenant contracted the disease in the house, or that anything growing out of the relation between
the parties had anything whatever to do with it.
* * * *
Even if the acts arose to the dignity of a constructive eviction, they would constitute no defense, not
having been followed by an abandonment of the premises, and a surrender to landlord.

How to do a Time of the Essence Closing When The Buyer Refuses to Close During The Pandemic.
 Give more time in the notice.
 Take into account any Covid-19 related circumstances that may result in your agreeing to delay the closing.
 At the same time you may want to accelerate the date if financing may disappear.
 Understand the new market the seller may be entering into if the deal does not close. Be reasonable with discounts.
 Otherwise, courts during the Spanish Flu enforced the law.

Whether the Executive Orders are Constitutional
The Contract Clause versus Home Building & Loan v. Blaisdell

Clause 1. No State shall...pass any.... ex post facto
Law, or Law impairing the Obligation of
Contracts..:
Contract Clause

Contract Clause
Home Building & Loan v Blaisdel.
In 1933, Minnesota enacted the Mortgage Moratorium Law in an effort to combat the economic emergency posed by the
Great Depression. The law extended the time period in which borrowers could pay back their debts on property to
lenders. Bank argued that the Minnesota law was unconstitutional under the Contracts Clause of the Constitution but
was unsuccessful in state courts.
The court reasoned that there are limitations on the doctrine embedded in the Contracts Clause (Section 10 of Article I).
There may be a public need to restrain private rights to further the public interest when there is an emergency. This
statute met the relevant five-factor test because there was a genuine emergency, the legislation was designed to help the
public in general, the relief was narrowly tailored to the problem, the mortgagor's interests were not seriously
undermined, and the legislation is temporary. Since the demands of the Great Depression were vital to all of the state's
citizens, the Court held the law was a legitimate use of Minnesota's police power.

Constitutionality to the Closing of Housing Court
The Republican form of Government
Article 4 of the United States Constitution “guarantees to every State in this Union a Republican
Form of Government.” (U.S.C. Article IV Section 4.). Although rarely used in our history, the
closing of our courts appears to violate the sanctity of this clause and the constitution.
At the time of this writing, new housing court cases cannot be started unless they fit into a very
select group of emergencies and as noted above Housing Court has made it almost impossible to
prosecute a case by putting up so many obstacles. It appears that the republican form of
government guaranteed by the constitution had been violated by the closing of the courts and
continues to be violated by the Civil Court of the City of New York as the courts cannot be closed
except for a select list of emergency actions.

Starting and Prosecuting Eviction and Foreclosure Cases Despite Executive Order Banning Commercial
Evictions and Foreclosures
Anthi New Neocronon Corp. v Coalition of Landlords, Homeowners & Merchants, Inc.
"The Court notes in the nature of dicta; that even if the #202.28 order did include a stay of "holdover
proceedings", that it would not be enforceable as it fails to comport with Sec. 29(a) of the Executive Law
which requires the Governor to precisely state what statute or regulation is being suspended and limits
such Executive Order suspension to thirty (30) days."
http://nycourts.gov/reporter/3dseries/2020/2020_ 20150.htm
A Sword Against The Ban Against Prosecuting Case
A Suffolk County Case

Requirement to Mitigate Damages
Please note HSTPA19’s new
RPL 227-e:
§ 227-e. Landlord duty to mitigate damages. In any lease or rental agreement, excluding any real
estate purchase contract defined in paragraphs (a), (c) and (d) of subdivision four of section four
hundred sixty-one of this chapter, covering premises occupied for dwelling purposes, if a tenant
vacates a premises in violation of the terms of the lease, the landlord shall, in good faith and
according to the landlord’s resources and abilities, take reasonable and customary actions to rent
the premises at fair market value or at the rate agreed to during the term of the tenancy, whichever
is lower.

Forbidden Harassment Of Tenants
All of these are located in the New York City Administrative Code, specifically The Housing
Maintenance Code.
 Harassment is a C Violation.
 Using force or threats against a tenant.
 Lying to a tenant about the apartment.
 Lying about rent stabilization on an application for a building permit.
 Repeatedly interrupting or discontinuing essential services.
 One interruption or discontinuance of service in a particular apartment where the whole building has
been subject to such interruptions.
 Repeatedly having Class C violations.
 False certifications of violations.
 Construction without a permit.
 Not restoring tenants within the ordered time on a vacate order.
 Bringing frivolous lawsuits.
 Bringing one frivolous lawsuit against a particular tenant when there have been other frivolous
lawsuits in the building.

Forbidden Harassment Of Tenants Continued…
 Removing a tenant’s possessions.
 Removing a door.
 Rendering a lock inoperative.
 Making buyout offers to a tenant who has notified the landlord of not wanting to be bought out.
 Making buyout offers without providing the tenant with information required by law for such offers.
 Making a buyout offer while threatening, calling too late, too early, or too often, calling the person at
work, or lying.
 Visiting tenants outside of business hours.
 Threatening a tenant because that tenant is a member of a protected class.
 Demanding ID from a tenant.
 Threatening a tenant because of that tenant’s having been impacted by COVID19 or received a rent
concession because of COVID19.

Privacy Laws
There is no law requiring Covid-19-infected residents to advise management of their condition, so long as the
infected residents self-quarantine in accordance with the mandated social distancing rules and guidelines.
“Information about one’s body and state of health is matter which the individual is ordinarily entitled to retain
within the ‘private enclave where he may lead a private life’” and which is recognized as matter “the
dissemination of which one would prefer to maintain greater control over.” Doe v. City of New York, 15 F3d 264,
267 (2d Cir. 1994).
Aside from the non-disclosure protections given to certain medical records, as provided for under Public
Health Law §§2782(k) and 2785, and under the Mental Hygiene Law §33.13, see In re Garinger, 305 AD2d 677,
759 NYS2d 550 (2d Dept. 2003), there is no New York State constitutionally or statutorily protected “right of
privacy” regarding a person’s interest in maintaining the confidentiality of his or her health status.

New York’s “Right of Privacy” statute (Civil Rights Law, §§50, 50-c) protects a person from
disclosure, “for advertising purposes, or for purposes of trade” only, of “the name, portrait or
picture of any living person without having first obtained the written consent of such person.”
However, there is a federal constitutionally protected “zone of privacy,” more accurately
described as “a right to ‘confidentiality,’” protecting a person’s “interest in avoiding public
disclosure of personal matters,” which may be required to be reported to governmental
authorities, see, e.g., Whalen v. Roe, 429 US 589, 599 (1977), but where the governmental authority
publicly discloses the sensitive personal health information, even where that health information is
otherwise required to be disclosed by law. See Doe v. City of New York, supra.
Privacy Laws

Contagious Diseases Deemed Handicaps
Ownership would be wise to not implement or take any action that treats an infected
resident different from the other residents of the building. Persons with communicable
or contagious diseases are deemed handicapped or disabled persons under federal law.
See School Board of Nassau County, Florida v. Arline, 480 US 273, 284- 286 (1987).

Residential Building Laws of the COVID-19 Pandemic

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