Five small landlords have sued New York attorney general Letitia James, arguing that the new blanket moratorium on evictions is unconstitutional.
Attorneys for the plaintiffs allege that the hardship declaration form, which landlords are now required to send their tenants, is “unconstitutional compelled speech,” because it forces landlords to voice support for a policy that is “squarely adverse” to their interests.
The lawsuit, filed Wednesday in federal court in New York’s Eastern District, lays out how five small landlords — each of whom owns only a few units — have been impacted by non-paying tenants.
In the single-family home that plaintiff Pantelis Chrysafis owns in Garden City in Nassau County, the tenants stopped paying in 2019 and now owe more than $70,000 in back rent. Betty Cohen owns a co-op in Brooklyn where her tenant stopped paying rent in March 2020. Though she initiated an eviction proceeding in September, it’s now stalled until at least May 1 because the tenant filled out a hardship declaration form.
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Another plaintiff wanted to sell one of her properties, but the tenants refused to vacate even after their lease was not renewed. She filed a holdover proceeding in December 2020, which was blocked.
The lawsuit also takes issue with the blanket moratorium because it is “unconstitutionally vague,” and because it does not require that tenants provide documentation to prove their hardship. Instead, landlords are bound by “nothing more than tenants’ say-so,” according to the filing.
Randy Mastro, a partner at Gibson, Dunn & Crutcher who is representing the plaintiffs, said in a statement that his clients have “shouldered the entire burden” of a policy that protects tenants from the consequences of not paying rent.
“Now that the State Legislature has compounded the problem by extending this moratorium in ways that clearly violate these owners’ First Amendment and Due Process rights, we’ve gone to court to challenge this unconstitutional action,” Mastro said.
A spokesperson for James did not immediately respond to a request for comment.
A spokesman for the Rent Stabilization Association said that the trade group, which represents landlords with rent-regulated apartments, supports the lawsuit, although it is not a party to it. He said it is necessary because there are working tenants who haven’t skipped a paycheck, but are taking advantage of the pandemic-driven moratorium.
The lawsuit comes on the heels of a decision by a Texas judge earlier this week that found that the federal eviction moratorium, enacted by the CDC, is unconstitutional. The order did not include an injunction, however, so the federal ban will stay in place.
The price tag for such lawsuits is high, but for multifamily property owners, the inability to evict a non-paying tenant amounts to an existential threat. Still, some observers in the legal community have questioned who is providing financial backing for the latest complaint. In 2014, Mastro charged $650 per hour in Gov. Chris Christie in the Bridgegate scandal — a 40 percent discount from Mastro’s customary fee, he said at the time.
One real estate attorney observed that “there is definitely big money behind” the latest lawsuit.
It would not be the first example in recent years of deep-pocketed industry players providing financial backing for those with less resources to have their day in court.
In 2019, four small landlords challenged the constitutionality of New York’s recently enacted rent law, with financial backing from a coalition of landlords that included Clipper Equity.