On July 16, 2020, Governor Cuomo of New York signed into law the Emergency Rent Relief Act of 2020, which aims to support low-income renters in New York state whose ability to pay rent has been affected by the COVID-19 pandemic by distributing rent vouchers directly to their landlords. The new law was enacted just days after the legislature introduced a bill that goes even further, aiming to cancel residential rent and certain mortgage payments accrued between March 7 and the date 90 days after New York’s ongoing state of emergency is rescinded.

The Emergency Rent Relief Act of 2020

The Emergency Rent Relief Act established New York’s COVID Rent Relief Program (“Program”). The Program, funded by the CARES Act and administered by New York State Homes and Community Renewal (“HCR”), provides up to $100 million of rent relief for low-income tenants who lost income between April and July as a result of the pandemic.

The Program will provide relief to qualifying households that rent apartments, single-family homes, manufactured homes, and manufactured home lots. According to the HCR, “the rental assistance payment will cover the difference between the household’s rent burden[, which the HCR defines as the percentage of gross household income paid toward rent,] on March 1, 2020 and the increase in rent burden during the period the household is applying for assistance.” Households can apply for up to four months of rental assistance (April-July 2020), and any awarded payments will be remitted directly to their landlords.

To qualify for relief under the Program, an applicant must be:

1. A renter with a primary residence in New York State;
2. With a household income (including unemployment benefits) below 80% of the Area Median Income, adjusted for household size, before March 1, 2020;
3. Who was “rent burdened”—or paying more than 30% of gross monthly income toward rent—both before March 1 and at the time of the application;
4. And has lost income during any period between April 1 and July 31, 2020

The application period opened on July 16 and will remain open through July 30.

According to the State’s press release announcing the Program, “HCR will prioritize households with the greatest economic and social need, accounting for income, rent burden, percent of income lost and risk of homelessness.”

The Rent and Mortgage Cancellation Act of 2020

In comparison to the Emergency Rent Relief Act, the Rent and Mortgage Cancellation Act of 2020 (“RMCA”) would cancel residential rent payments as well as mortgage payments for small homeowners (owners of residential properties with six or fewer units) throughout the entirety of the state of emergency and 90 days thereafter.

The RMCA does not place hardship qualifications on the cancellation of rent and would instead issue a blanket cancellation throughout the designated period. Additionally, the RMCA would prohibit common consequences of non-payment, including eviction, fines, money judgments, and negative impacts on the credit scores of impacted individuals.

In addition to cancelling rent payments, the RMCA would create a state-funded “landlord relief fund,” which would be administered by the HRC and provide full reimbursement to landlords and public housing authorities for “all rent payments cancelled.” However, any reimbursement would be contingent upon the landlord’s entering into an agreement with the HRC Commissioner promising to freeze rent increases for five years and abstain from evicting tenants except for good cause, such as illegal occupancy, valid nuisance claims, or lease violation.

The RMCA also includes a provision for enforcement authority, which stipulates an escalating scale of fines for landlords or mortgagees who take “adverse action” against tenants and small homeowners. First time offenders would be fined $10,000, and repeat violators could be fined up to $100,000 or ordered to forfeit their property.

It remains to be seen whether the RMCA will gain any traction within the legislature—presently, it is with the Senate Rules Committee—but if it is enacted there is little doubt it will be the subject of various legal challenges, constitutional and otherwise, due to its impact on landlords across New York state.