LANDLORD-TENANT COVID-19 FAQs -- PART 5

In Part 5, we explore the subject of “tenant harassment” and examine the remedies available against those opportunistic landlords looking to capitalize on the pandemic.

Earlier Parts of our series can be found here: 1 (rent issues in the midst of COVID-19), 2 (repairs, security deposits, move-ins/move-outs), 3 (rent gouging, non-primary residence, minimizing COVID exposure) and 4 (restricted access and wrongful eviction).

• My landlord is asking for “sexual favors” if I can’t pay the rent. What can I do?

The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, disability and national origin. Sexual harassment -- which is generally defined as “demands for sex or sexual acts in order to buy, rent, or continue renting a home,” and “includes other unwelcome sexual conduct that makes it hard to keep living in or feel comfortable in your home” -- is considered a form of sex discrimination which is expressly forbidden by federal, state and local statutes, such as the New York City Human Rights Law.

Safeguarding tenants’ safety is of paramount importance—particularly now, in the midst of this unprecedented COVID-19 pandemic. The National Fair Housing Alliance has reported a 13% uptick in sexual harassment complaints in the last few weeks, including reports like this incident out on Long Island where an owner is alleged to have solicited sex in exchange for a rent waiver.

Sexual harassment may not only subject landlords to an array of civil penalties, but to criminal prosecution, as well.  If you have encountered such misconduct, we urge you to file a report with the U.S. Department of Justice, and/or with local prosecutorial agencies, and/or to submit a harassment complaint with Fair Housing NYC—a joint effort of the NYC Commission on Human Rights and the NYC Department of Housing Preservation and Development.

Our office stands ready to assist you through the process and can provide guidance, as needed.

• Because my business has been closed, due to COVID-19, I have been unable to pay the rent. The landlord is now threatening to sue me and the other guarantors personally for the alleged lease “default.” Can owners do that?

New York City’s “Non-Residential Tenant Harassment Law” protects small business owners and other commercial tenants from being wrongfully pestered or persecuted by property owners.  The law prohibits such conduct as:

• the use, or threatened use, of force;
• service related disruptions (like the termination of gas, electricity, heat and hot water) for significant timeframes;
• frivolous or baseless court proceedings;
• the wrongful removal of tenant’s property;
• interfering with the tenant’s entrance, wrongfully removing the entrance door, or otherwise impeding entry by tenant or its invitees/guests; and
• undertaking needless construction or repairs, or other acts, which interfere with tenant’s business operations.

The scope of what constitutes “commercial harassment” was recently broadened by the New York City Council, on May 26, 2020, to afford even greater tenant protections.

Commercial leases are often backed by personal guarantees where individuals promise to pay a tenant-entity’s outstanding arrears, in the event of a default. Per the new law --NYC Council Int. No. 1932-A, and NYC Council Int. No. 1914-A -- a personal guarantee of a commercial lease may be not be enforceable if the tenant defaults due to COVID-19. And any attempt by a commercial landlord to find the guarantors personally liable may now be deemed a form of tenant harassment.

In order for this latest protection to apply, the law requires that, (a) the guarantor must be a natural person who is a different person than the tenant under the commercial lease being guaranteed; (b) tenant’s business is either a food, beverage or retail establishment or certain other business that was required to close to the public and was affected by COVID-19; and (c) a lease default triggering the guarantor’s personal liability has occurred between March 7, 2020 and September 30, 2020.

While there is currently considerable uncertainty as to how the law will work (e.g., whether the forgiveness is limited to a guaranty contained within a commercial lease or other rental agreement, or if it also includes stand-alone guaranties entered outside of the lease document), a landlord’s violative actions may be punishable by a civil penalty ranging anywhere from $10,000 to $50,000.

This new legislation is expected to face an array of legal challenges. The Real Estate Board of New York representing New York City’s real estate owners, brokers and managers has argued that the new law improperly and unilaterally amends existing, valid contracts between parties. Generally, the Contracts Clause of the U.S. Constitution provides that no state may pass a law interfering with private agreements and their corresponding obligations. Thus, the legality of NYC Council Int. No. 1932-A and NYC Council Int. No. 1914-A will hinge on whether they are found to contravene established constitutional protections.

If you are a commercial tenant, or a guarantor to a commercial lease, and have been harassed by a landlord, please reach out to one of our attorneys to find out if you qualify for the protections afforded by these anti-harassment laws.