How To Evict Commercial Tenants in New York When You Can’t Commence Proceedings

On March 9, 2021, Governor Cuomo signed the COVID-19 Emergency Protect Our Small Businesses Act of 2021 (“the EPSBA”) into law.  In addition to making it unlawful for a landlord to exercise “self-help” evictions, the EPSBA immediately stayed all lawsuits seeking a commercial eviction that are currently pending and which may be filed before April 8, 2021 for at least 60 days. Although the stated purpose of the EPSBA is to protect small businesses, it is very poorly drafted with potentially broad implications. Similar to the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020, which applies to residential cases, the EPSBA permits qualifying commercial tenants to submit a “hardship declaration” form to their landlord if, as a result of the pandemic, they have lost significant revenue, incurred significant increase in necessary expenses, or have difficulty securing an alternate location. Once such a commercial tenant submits a hardship declaration to their landlord, the tenant is protected from an eviction through May 1, 2021, subject, of course, to further extensions that may be implemented.  The EPSBA may have muddled the commercial eviction laws, but it has made the public policy clear: eviction proceedings are not proceeding quickly, if at all. 

There are, however, ways around the EPSBA which will still enable landlords to litigate their claims against tenants who fail to pay rent—which can be the basis for an eviction.  In an eviction proceeding, a landlord must first litigate the underlying claims upon which an eviction is sought before the landlord is permitted to evict that tenant (e.g., the nonpayment of rent).  The EPSBA has stayed such litigation, but only if the lawsuit specifically seeks an eviction. A savvy attorney can find other ways to assert the same claims, which fall outside the scope of the EPSBA and executive orders, so that they can be litigated immediately.  Then, when evictions are permitted, the underlying claims to support an eviction will have already been decided and they cannot be relitigated again under the legal principle of collateral estoppel.