Landlords challenge city laws protecting non-paying businesses
Federal lawsuit cites constitutional grounds
Two commercial landlords sued the city Friday over laws hastily passed to protect retail tenants during the pandemic.
The federal lawsuit challenges a package of bills that Mayor Bill de Blasio signed in May, including one that temporarily bars landlords from going after the personal assets of restaurant and store owners who owe rent.
The lawsuit alleges that Mayor Bill de Blasio’s actions deny landlords’ First Amendment rights and violate the contract clause of the Constitution, among other laws. Commercial leases often have clauses that allow the landlord to target the personal assets of tenants who walk out on a lease.
Stephen Younger, the lead attorney on the case, said that the laws passed by the city are too broad, and can protect large corporations capable of paying rent despite the pandemic at the expense of small landlords.
“These laws have no substantial injury requirement in them,” said Younger, a partner at Patterson Belknap Webb & Tyler. “If these bills were focused on the people who were suffering from Covid-19 or were unemployed, we wouldn’t be bringing this lawsuit.”
His landlord clients, Marcia Melendez and Ling Yang, are first-generation immigrants who because of the pandemic are struggling to make their mortgage payments, according to court documents.
Some City Council members voted against the bills, saying they interfered with private contracts. Concerns were raised upon the bills’ introduction that they were unconstitutional.
The bills were strongly supported by restaurant owners, many of whom have been unable to pay rent and fear for their future, even with government relief efforts and the expansion of outdoor dining.
“This critically important legislation protects tens of thousands of small business owners from personal financial ruin and landlord harassment, and we’re confident that the courts will agree that it’s necessary and lawful,” said Andrew Rigie, executive director of the NYC Hospitality Alliance, in a statement. ‘Landlords that care about their community should not bring such a lawsuit or try to personally bankrupt a restaurant owner that was mandated by [the] government to close their business due to a pandemic.”
Other landlords and business owners have similarly sued the government for implementing coronavirus restrictions. Thousands of gym owners brought a case Thursday against Gov. Andrew Cuomo after he excluded their establishments from phase 4 of the state’s reopening.
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