Cuomo Extends Commercial Eviction, Foreclosure Moratorium Until May 1

New York businesses hit by the coronavirus pandemic will receive a longer reprieve from possible eviction or foreclosure, after Gov. Andrew Cuomo extended the commercial moratorium. Real estate industry voices say not enough has been done to make them whole while they are barred from evicting non-rent-paying tenants.

Cuomo signed a law Tuesday that increases the scope of eviction and foreclosure protections to businesses with less than 500 employees that were closed by state order between May 15, 2020, and May 1, 2021. This is in addition to those with 100 or fewer employees and those with under 10 units, which were included in prior protective measures. 

“[The bill] will hit the pause button on eviction and foreclosure proceedings for small businesses that are struggling,” state Sen. Anna Kaplan, who introduced the bill, said in a statement. “Giving them a shot at survival, and giving them the opportunity to get back on their feet without the looming threat of being closed down for good just because they've fallen behind during the pandemic." 

The expanded guidelines will help more businesses, such as the 92% of New York City restaurants that could not pay their rent in December, NYC Hospitality Alliance Executive Director Andrew Rigie said. 

“This updated legislation expanding eviction protections to cover businesses with more than 50 employees is a critically important [addition], otherwise it would have excluded local restaurants and nightlife establishments that are labor-intensive businesses and have been among the most devastated sectors of the economy,” he said. 

The bill will also help more minority-owned businesses, which have been hit harder by the pandemic, stay afloat, said Valerie White, executive director of Local Initiatives Support Corporation NYC, a nonprofit aimed at supporting minority-owned businesses. 

“The expansion of commercial eviction protections for New York City’s small businesses is extremely encouraging news for countless minority-owned businesses and commercial corridors home to Black and Latino entrepreneurs, business owners, and communities, who without this protection would be completely decimated by the economic crisis,” she said in a statement.

“Many members of our minority-owned and small business community are facing arrears in the hundreds of thousands of dollars, and the prospect of eviction proceedings for any of these businesses would lead to their immediate closure and blight in commercial corridors across the city.” 

Still, small property owners need to be considered in the small-business relief equation, too, White said. 

“As we continue to fight for our small business community, it’s important we remember that small landlords are small businesses, too,” she said. “We must do everything possible to ensure that property owners whose livelihoods depend on rent dues have the support they need to survive this economic crisis.”

Landlord lobby group Community Housing Improvement Program Executive Director Jay Martin said while providing businesses with support is needed, the extension and expansion of the moratorium doesn't come with additional financial support for landlords struggling to pay their taxes while “many are collecting little to no rent.”

"Eviction moratoriums are just stall tactics,” Martin said. “It is long past time for the government to present a real recovery plan that gives small businesses hope that they can reopen and prosper … This is not a solution. This is kicking the can down the road, again."

While the law aims to, in part, help struggling landlords, Martin says this is not a long-term solution. 

"A temporary ban on foreclosures doesn't help property owners if there is no plan to provide them financial relief," he said. "Their fate will be left up to lenders and banks, which is not something I think lawmakers really want to happen."

Real Estate Board of New York President James Whelan said the law doesn't adequately address businesses that have the ability to pay rent but have been withholding it. 

"Courts should be able to hear cases in which well-capitalized tenants have simply declined to pay rent even though they are more than able to do so," he said in a statement to Bisnow. "When property owners do not receive rent from tenants who can afford it, it becomes more difficult for them to use increasingly limited resources to help impacted tenants weather this crisis.”

Landlords have previously argued that large companies like Valentino and Pret A Manger, among others, failed to pay their rent despite having the financial means to do so.