NYC Landlords Lose Bid To Overturn Laws Protecting Commercial Tenants

Two landlords trying to knock down New York City pandemic laws that protect businesses that can’t pay rent have lost their challenge in federal court.

A collection of laws the city council passed in May do not violate the landlords’ right to free speech and due process, U.S. District Judge of the Southern District of New York Ronnie Abrams ruled, dismissing the landlords' claims in their entirety on Monday.

The landlords, who own small residential and commercial properties in Manhattan, Brooklyn and Queens, argued several of the measures, which include a law that stops property owners from going after personal assets of restaurant and retail tenants who are behind in their rent, were unconstitutional, The Real Deal reports. Abrams ruled that the plaintiffs' rights had not been infringed upon by the laws.

“Plaintiffs have expressed some legitimate concerns, and the Court recognizes the toll the pandemic has taken on them, in addition to their tenants, all New Yorkers, and millions more around the world,” Abrams wrote in her decision. 

Along with protecting tenants' personal assets, the laws bar landlords from harassing residential or commercial tenants into leaving if they have been affected by the coronavirus pandemic. 

Abrams wrote that laws to protect assets were passed to “advance a legitimate public interest ... the Court holds that these ordinances are not in conflict with the State’s efforts to respond to the pandemic." 

A lawyer representing the landlords told TRD they are considering an appeal.

It is yet another example of the growing tensions between tenants and their landlords, as the pandemic continues to cause major economic strain on the real estate sector.

Multifamily landlords are faced with rising vacancy rates and sliding rents, while many stores and restaurants have been unable to survive through the government-imposed restrictions to curb the virus. Across the city, multiple landlords and retailers are suing each other over rent payments.

Meanwhile, property owners say with commercial and residential vacancies, low leasing volume and tenants unable to pay their bills, landlords’ ability to meet their tax obligations is now severely compromised.