New York City Limits Personal Liability for Commercial Leases
May 28, 2020
On May 26, 2020, Mayor Bill DeBlasio signed Bill. No. 1932-A into law, which went into effect immediately. The law temporarily prohibits the enforcement of personal liability provisions in commercial leases or rental agreements involving a COVID-19 “impacted tenant.” The law applies to tenants impacted during the “COVID-19” period” between March 7, 2020 and September 20, 2020.
Specifically, with respect to commercial leases, the law applies to tenants impacted by the mandated closures and service limits required under the Governor's Executive Orders and covers “(1) businesses that were required to stop serving food or beverages on-premises (restaurants and bars); (2) businesses that were required to cease operations altogether (gyms, fitness, centers movie theaters); (3) retail businesses that were required to close and/or subject to in-person restrictions; and (4) businesses that were required to close to the public (barbershops, hair salons, tattoo or piercing parlors and related personal care services).”
The law provides that “threatening to or attempting to enforce such a provision” is “considered a form of harassment.”
No doubt, commercial landlords and residential landlords will seek to challenge the new law in Court. The information in this article is current at the time of publication. However, due to the anticipated challenge and the constant evolution of COVID-19 related laws, we recommend that you speak with an attorney to confirm the law’s current status and how it may impact your business.
The full text of the law is available here.