Coopersmith and Coopersmith

On March 9, 2021, Governor Cuomo signed the COVID-19 Emergency Protect our Small Businesses Act of 2021. Instead of continuous executive orders, the law codifies an extension of the commercial eviction moratorium under certain circumstances through April 30, 2021.

A New York State based commercial tenant, employing fifty or fewer individuals, that is independently owned and operated, and “not dominant in its field” may now complete a hardship declaration stating that they have suffered a significant loss of business due to Covid-19. Once a hardship declaration has been completed, the commercial tenant may not be evicted for the nonpayment of rent or holding over after expiration of the lease, however a commercial tenant may be evicted as a result of nuisance or a violation of safety.

The law is haphazard and does not define a significant loss of revenue, if employees are categorized on a full time or part time basis, independently owned, and “not dominant in its field”. From a practical standpoint, by the time the law expires it is unlikely to be tested in court unless it is further extended.

While commercial tenants may be temporarily excused from eviction, the law does not prevent rent from accruing under the leases. Commercial tenants facing hardship should  explore exit strategies under their leases especially as New York City’s protection for individual lease guarantors is set to expire at the end of the month.

In addition to temporary relief for commercial tenants, the law also offers protections for commercial landlords who are facing mortgage foreclosure. A commercial landlord that owns ten or fewer commercial units and employing fewer than 50 individuals may stay a mortgage foreclosure proceeding through April 30, 2021 by completing a similar hardship declaration.

If you would like to discuss your specific circumstances and how they may be impacted by the foregoing, please feel free to contact us HERE or by calling us at (212) 625-8505.

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