Small businesses, including restaurants, received a temporary boost Tuesday when a new piece of emergency legislation was signed into law protecting them from eviction through May 1 this year.
The COVID-19 Emergency Protect Our Small Businesses Act, as this legislation is known, was introduced by State Sen. Anna Kaplan — who represents parts of Nassau County in Long Island — earlier this year and currently applies to businesses with 50 or fewer employees, and extends to landlords who own 10 or fewer units either in one building or spread out over multiple properties.
Both tenants and landlords can submit hardship letters demonstrating the loss in revenue due to the COVID-19 pandemic. Tenants will submit these letters to their landlords, and landlords can submit their own hardship letters to mortgage lenders or city and state agencies to prevent tax payment-related foreclosures.
The emergency legislation does not cover any cases where an eviction warrant has already been executed, but in cases where a warrant is still pending, the legislation grants a 60-day pause on all proceedings until a judge decides if the eviction proceeding should move forward.
In a statement, Kaplan said the legislation “will hit the pause button on eviction and foreclosure proceedings for small businesses that are struggling, giving them a shot at survival, and giving them the opportunity to get back on their feet without the looming threat of being closed down for good just because they’ve fallen behind during the pandemic.”
Additionally, the state legislature is working with Gov. Andrew Cuomo to extend these protections to businesses with 100 or fewer employees, and places with 500 or fewer employees, which qualify if they were forced to shutter in-person operations for two or more weeks due to pandemic-related executive orders between May 15, 2020 and May 1, 2021. It’s not yet clear when this addition will be made but Eater has reached out to Kaplan’s office for more details.
The NYC Hospitality Alliance — which represents thousands of restaurants in the city — pushed for the legislation to cover larger businesses as well, and said in an alert issued on its website that it would continue advocating for further extensions past May 1 based on the situation at that time.
This latest announcement comes on the heels of some uplifting news for the beleaguered restaurant industry with the Biden administration’s stimulus bill — and it’s $28.6 billion direct aid for restaurants — set to pass as well. Since the start of the pandemic, Cuomo has extended the eviction moratorium for commercial businesses, but this marks the first piece of legislation on the matter. Still, as states across the U.S. relax restrictions, health experts have warned against another spike in cases that could potentially lead to more shutdowns.
While eviction moratoriums do provide some immediate, necessary relief, they don’t address the restaurant industry’s ongoing rent crisis. A December survey of more than 400 restaurants in NYC conducted by the Hospitality Alliance showed that 92 percent of businesses could not pay full rent. Even as state-mandated restrictions lift, and business gradually picks up with the warmer weather, many restaurants will still be on the hook for rent that remained unpaid during the course of the last year. The new stimulus will help to some extent, though restaurant industry advocates have also called for rent cancellation. State legislators Harvey Epstein and Brad Hoylman are also working on legislation that mandates percentage rent payments for businesses that took a hit during the pandemic and provides relief to landlords as well.
UPDATE 3/19/21: The amendments to this legislation to allow protections for some larger businesses has now been approved.