Struggling restaurant and store owners are shielded from landlords seizing their personal assets for another three months.
The City Council on Thursday approved a bill that bars the enforcement of personal liability provisions in commercial leases or rental agreements. The extension would apply to properties where a default happened between March 7, 2020 and June 30, 2021.
Personal guaranty provisions allow landlords to go after tenants’ personal assets in the event of a lease default, be it from unpaid rent, utility expenses or taxes. The bill has drawn criticism from real estate groups and some elected officials, who argue that it interferes in private contracts between landlords and tenants without providing adequate relief for the former. The law protects tenants that were forced to stop serving food or beverages, stores where capacity was limited and businesses that were forced to close during the pandemic.
The state recently expanded eviction protections for certain commercial tenants, allowing businesses with 50 or fewer employees to avoid being kicked out through May 1.
Though the state has gradually eased restrictions on in-person gatherings and expanded the number of New Yorkers who are eligible for the Covid-19 vaccine, businesses are still struggling. A recent survey by the New York City Hospitality Alliance showed that 46 percent of city restaurants feel they will not survive without additional financial support or the extension of policies like the eviction moratorium.