The COVID-19 pandemic has resulted in state and local governments across the country implementing executive orders and other laws that place  a moratorium  on residential and commercial evictions.  Recently, New York City has taken further steps, passing  a series of  laws that prohibit landlords from harassing tenants  and small business owners impacted by COVID-19. In response, certain real estate industry participants challenged to the laws as unconstitutionally restricting their First Amendment and contract rights.

However, the Court in Melendez v. City of New York, No. 20-CV-5301 (RA), 2020 WL 7705633  (S.D.N.Y. Nov. 25, 2020) rejected those constitutional challenges  and upheld new provisions of the  NYC  administrative code that expand the definition of unlawful harassment to include threats against individuals or  businesses  based on their status as a COVID-19 impacted persons, their status as  essential employees, or their receipt of a rental concession or forbearance.  These ordinances  were enacted to supplement the existing statewide moratorium on  commercial and residential evictions for non-payment of rent due to COVID-19, which may  not provide sufficient protection. For example, some landlords may attempt to employ other  types of lease violations as a pretext to declare defaults against both residential and commercial tenants impacted by COVID-19. Another new law makes  personal guaranties in commercial leases unenforceable against  COVID-19 impacted persons. These provisions are retroactive to March 2020 and currently extend until at least the end of March 2021 or after  the statewide moratorium on evictions expires.  Violations are punishable by civil penalties of $2,000 to $10,000. There is also a private right of action under which  affected tenants may recover attorney's fees and punitive damages.
 

To read the full article, please click here