Cuomo signs bill barring evictions of some small businesses

More than a month after the legislature approved it, Gov. Andrew Cuomo has signed a measure that expands commercial eviction and foreclosure protections for some small businesses until May.

The measure, which was passed by the Senate and Assembly in late January, allows businesses with 50 or fewer employees to avoid evictions through at least May 1 by filing a financial hardship declaration. Owners of 10 or fewer commercial units can also fill out a hardship declaration to stave off foreclosure until then.

In a press release, the governor announced an agreement with the legislature to amend the bill. Those changes would apply eviction protections to businesses with 100 or fewer employees, and to those with 500 or fewer employees that were closed to in-person operations by executive order or a Department of Health directive for two or more weeks between May 15, 2020, and May 1, 2021.

The legislature will need to separately pass these chapter amendments.

Sen. Anna Kaplan, one of the bill’s sponsors, said in a statement that the measure will give struggling businesses “a shot at survival” and “the opportunity to get back on their feet without the looming threat of being closed down for good.”

The measure follows confusion over the status of the state’s commercial eviction ban. The governor’s most recent executive order on the matter expired Feb. 22. That day, the governor signed a blanket order that seemed to extend the moratorium to March 24.

If that were the case, the ban could have been effective for yet another 30 days: When the legislature curbed the governor’s emergency powers last week, it approved extending existing directives for that period of time. A spokesperson for the governor, however, disputed that.

The new law closely mirrors the state’s restrictions on residential evictions, which the legislature approved in December to landlords’ dismay. That bill froze most evictions and foreclosures for two months, and extended protections through May 1 for residential tenants who file hardship declarations.

There are some differences, however. Attorney Adam Leitman Bailey pointed to language in the bill that bars removal of a commercial tenant by any means “except by an eviction proceeding” prior to May 1.

He said this clause is targeted at so-called “self-help” evictions, in which a landlord effectively kicks a commercial tenant out by changing the locks. He said the eviction ban is “extremely unfortunate for our economy and for many small businesses that need tenants’ rent to stay in business.”

One highlight of the bill, according to Bailey, is that it only halts commercial eviction cases started prior to March 7 for 60 days.