TIPS FOR LANDLORDS AND PROPERTY MANAGERS COPING WITH THE COVID-19 OUTBREAK IN NEW YORK
With the unprecedented impacts of the COVID-19 pandemic, many landlords and property managers in New York are considering their options under existing leases to determine the best path forward. Whether you’re a residential or commercial landlord or property manager for a handful of units or a larger complex, here is what you need to know about preparedness, communication and the legal impact of the coronavirus outbreak in New York State.
The CARES Act
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law by the federal government in response to the COVID-19 pandemic. Section 402(4) of the CARES Act addresses evictions for “covered properties.” The Act defines “covered properties” as any properties that participate in an affordable housing program, as well as any properties that are subject to a federally backed mortgage. This is a broad swath of properties and landlords should discuss with their attorneys whether their properties may be subject to the provisions of the CARES Act.
For properties that are subject to the CARES Act, the following actions cannot be taken by the landlord for 120 days:
(1) file an eviction petition for nonpayment;
(2) charge late fees or any other fees associated with a resident’s nonpayment; and
(3) issue a notice to vacate. A silver lining for most of these covered properties is that they are likely able to benefit from mortgage relief for 90 days under the Act.
During these times of high stress, communication with residents is key and should be frequent and constant.
You should be communicating with your residents about the Centers for Disease Control requirements for keeping areas clean and sanitized, as well as any requirements for resident behavior and legal requirements that have been put in place for resident safety. Act diligently in having hand sanitizer and cleaning products placed in common areas, which should be communicated to the residents. It’s a good idea to temporarily suspend social gatherings, such as meet and greets, apartment complex meetings, or other activities in the building that require people to gather.
Try to encourage residents, build them up and unify them. In difficult times, any encouragement, even from a landlord or property manager, can be encouraging and make a difference in a resident’s day. You should pass on information from authorities, including location of COVID-19 testing centers and how to get necessary medical assistance. Also, provide contact information for financial resources for your residents because many of them will not be able to pay rent in the coming weeks and months. Make sure to keep good records during these difficult times to ensure that you can address any potential legal disputes that may arise once the outbreak subsides.
With regards to marketing, you should use virtual tours if you have the technological capability. Landlords are also permitting more resident self-guided tours. If you permit a prospective resident to take the keys for a self-guided tour, be sure to have a written agreement outlining that they are only allowed in the apartment for a short period of time.
Rent Collection, Late Fees, Renewals and Other Financial Issues
In New York State, there is currently a statewide moratorium on evictions until at least June 20, 2020. During the moratorium, the lease remains in place and the legal terms of the lease still apply. This means that the resident’s rent for the months covered by the moratorium will still be due once the moratorium is lifted. The expectation should be that residents will continue to pay under the terms of the lease. Despite that expectation, empathy is always important for landlords and property managers, but that should be particularly true during these trying times.
Landlords should stay up to date on state, county and local requirements for bringing a summary proceeding to evict a resident. Residents will likely now be more mindful of the law and will perceive the law as more favorable to their position, sometimes incorrectly. You should assume residents are aware that you cannot file suit for their non-payment.
For safety purposes, it is best to encourage residents to make payments online. If any residents must pay in person, it is safest to ensure there is a drop-box or some other means for them to remit payment without any personal interaction. Any employees handling cash, checks or other paperwork sent in by residents should use gloves. If you have an elevator, precautions should be put in place to limit number of riders per car and the proximity of where residents can stand before boarding.
In New York State, although there has not been any legislation that prohibits a landlord from collecting late fees during the moratorium, many landlords are waiving such fees for residents who can show they have been impacted by the outbreak. However, keep in mind, the CARES Act does prohibit collecting late fees for nonpayment for ‘covered properties’ for 120 days.
Regarding lease renewals, rent increases and payment plans, be wary of the Fair Housing Act (“FHA”), which provides that all residents must be treated similarly and that landlords cannot discriminate against any protected class. It is important to make sure residents are all treated equally if they show signs of carrying the COVID-19 virus and/or if it impacts them financially. If you have concerns about navigating FHA requirements, you should contact your attorney.
Keep in mind, this is a constantly changing landscape in which landlords and property managers should anticipate taking untraditional steps in handling residents over the next several months.
 The federal Fair Housing Act (FHA) (42 U.S. Code § § 3601-3619 and 3631) prohibits discrimination on the basis of seven protected classes: race, color, religion, national origin, sex, disability, and familial status.
At Jacobowitz and Gubits, LLP, we have a group of experienced attorneys who can help you navigate all of these new laws.
This is not intended to be legal advice. You should contact an attorney for advice regarding your specific situation.
He can be reached by phone at 866-303-9595 toll free or 845-764-9656 and by email.