Not so fast: NY Bar says city has no authority to introduce commercial rent control

Law group said the city proposal would run afoul of state laws

Sep.September 12, 2018 08:42 AM

Ydanis Rodriguez

A proposed city bill that would give retail tenants control over lease renewals – in effect, commercial rent control – would not stand up in court, according to a recent report.

The Small Business Jobs Survival Act, which was proposed in March by City Councilman Ydanis Rodriguez, would give commercial retail tenants a right to a 10-year lease renewal, given they met the terms of their existing contract, according to Crain’s. If a landlord refuses, or an agreement cannot be met, tenants are given a lease extension during arbitration.

But the bill lacks legal grounding and has been proposed several times in the past. Commercial rent control did exist in New York, between 1945 and 1963. But the state law mandating it expired and it has not been reintroduced.

Last month, a form of commercial rent control was introduced to Inwood rezoning scheme, that would force new mixed-use developments receiving $2 million or more from the Department of Housing Preservation and Development to give commercial tenants a lease of at least 10 years “with limited rental increases.”

The New York Bar Association wrote in its recent report that the city is not backed by City Charter, state Constitution or state law to enact commercial rent control that would give power to tenants — mostly small businesses. In the past, the Association wrote, courts have been reluctant to impose resident rent control, and commercial rent control faces even greater challenges to justify under law.

Further, the bill would introduce inconsistencies with state law, which overrules city law. [Crain’s] — David Jeans

Related Articles

Blackstone CEO Steven Schwartzman and Stuyvesant Town (Credit: Getty Images)

After authorities vowed review of Stuy Town deal, Blackstone changes course on vacancies

Tete-à-tete with TRD: How landlords are dealing with New York’s new rent laws

Tete-à-tete with TRD: How landlords are dealing with New York’s new rent laws

Real Capital Analytics data showed that New York’s multifamily market had a very slow July. (Credit: iStock)

New NYC rent law “beginning to shut down investment”

From left: Slate Property Group's David Schwartz, Patrick Jenkins, Assembly Speaker Carl Heastie, Senate majority leader Stewart Cousins, and Julia Salazar (Credit: Getty Images)

Two takeaways for real estate from Albany’s power weekend

 Isaac Kassirer with the apartments at East 117th Street (Credit: iStock, Google Maps)

Con Ed threatens to pull plug on four Dawnay Day buildings

Brookfield Asset Management CEO Bruce Flatt

“We underwrite every investment like we’re going to hit a recession”: Brookfield CEO

Watch The Real Deal's Erin Hudson explain the breaking broker fee news on CBSN

TRD on TV: Erin Hudson talks broker-fee shocker on CBS

Congresswoman Nydia Velasquez and State Senator Julia Salazar (Credit: Getty Images)

“Good cause” eviction bill amended, advances in Albany