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Mayor Signs Law Shielding Retail Tenants From Landlords

Mayor Bill de Blasio signs coronavirus relief measures into law on May 26, 2020.

New York City retail tenants and the hospitality industry received some relief from City Hall Tuesday when Mayor Bill de Blasio signed a slew of coronavirus relief measures into law.

The seven laws include measures that forgive sidewalk café fees, limit the fees a third-party food delivery service can charge, temporarily expand the definition of landlord harassment and suspend the personal liability clause in leases — which landlords argue goes too far.

“New Yorkers have been fighting every day to flatten the curve and get through this pandemic together. Now, it’s time for us to give back to them,” de Blasio said in a statement. “I’m proud to sign this package of bills into law to offer protections for our small businesses, restaurants, and tenants to ensure that our city can come back stronger.”

Intro-1932A, which would prohibit landlords from threatening tenants' personal assets if the tenant failed to pay rent due to coronavirus-related financial issues, received criticism from the real estate industry.

When the law was first proposed, the Real Estate Board of New York said it was too broad, possibly incentivizing major corporations that may be able to make their rent payment to skip doing so, in addition to helping struggling small businesses and restaurants. 

“Many large national and international tenants have the means to pay their rent and are shamefully using this crisis not to,” REBNY President James Whelan said in a statement Wednesday. “Our members continue to work with small businesses who genuinely need help to weather this crisis, however this legislation provides an excuse for credit-worthy tenants to evade their financial obligations to our city." 

In April, more than 40% of national retail stores in the city didn't pay rent, making it harder for landlords to work with smaller tenants who are struggling to pay, he said. 

"Our city’s economic engine can’t afford unnecessary barriers that will make it more difficult for commercial property owners to work with smaller businesses to address their legitimate needs and concerns," Whelan said. 

Councilwoman Carlina Rivera, who proposed the bill, said it was immoral for landlords to go after tenant assets during the crisis.  

“With the signing of my bill, any small business owner with a personal liability clause in their lease will see that provision temporarily suspended,” Rivera said in a statement. “They will no longer have to fear their landlord going after their personal life savings and assets because of a disaster no one saw coming." 

New York City Hospitality Alliance Executive Director Andrew Rigie lauded the new laws. 

“There’s been many difficult days for New York City’s restaurants and bars since March 15,” Rigie said in a statement. “Today ... all the supporters of this legislation extended a glimmer of hope to thousands of restaurants across the five boroughs. We’ll continue to fight for the future of the New York City restaurant and nightlife industry, which must be at the core of our city’s economic and social recovery.”