NY Bill Would CANCEL Rent for 90 Days, Not Postpone.
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Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes
6yI wouldn't touch NY with a ten-foot pole.
172 Replies
- Real Estate Agent · Scottsdale, AZ · Member since 2019 · 448 posts · 320 votes6y
Originally posted by @Tony T.:
The 5th Amendment of the Constitution says: "...nor shall private property be taken for public use, without just compensation."Ordering businesses to close does not violate the 5th Amendment; ordering the giveaway of a product or service does. Do you know why this concept is in the Constitution? Because it's tyranny! These lawmakers aren't the guards of your liberty, they are part of mob rule that would take as much as they can from anyone, in exchange for votes.
Every politician in the history of politics has made promises in exchange for votes, but what you are referring to is one of the pillars of the modern liberal, Democratic Socialist movement--developers/landlords are the Devil, and housing is a right not a privilege. Let someone else build it, manage it, pay for it and take all the risk, so long as it isn't them. This is why bastions of liberalism such as California, New York, Chicago, etc. have such disdain for capitalist landlords, and why they have all but legislated theft of your property.
Example, in Chicago, tenants can easily game the system. They just stop paying their rent because the landlord can't get them out for a year or more. That is basically theft of services, breach of contract, and unlawful occupation of private property which is enabled by the crooked system established to protect tenant rights. And I am all for tenant rights, because there would be a lot worse landlords out there taking advantage of people if not for those, but not if it means that they get to break the law and steal from people.
- Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes6y
Originally posted by @Tony T.:
@Joe Splitrock: The difference between you comparing closing a business and ordering free rent is this: The ordering of a business to cease operation is totally different from ordering a business to give away their product or service for free.
Secondly, your example of a bar focuses on the occupying of that space is not valid, because the customer is not paying to occupy the space, he is paying to make a purchase ...occupying a space for 5-30 minutes isn't what he's paying for; it's complimentary. Occupying a PRIVATE home/apartment is the only reason there is money exchanged; it's the essence of the contract. So you'll have to show me where the government forces a private citizen to give away their product or service for free with no compensation to make your argument.
The 5th Amendment of the Constitution says: "...nor shall private property be taken for public use, without just compensation."
Ordering businesses to close does not violate the 5th Amendment; ordering the giveaway of a product or service does. Do you know why this concept is in the Constitution? Because it's tyranny! These lawmakers aren't the guards of your liberty, they are part of mob rule that would take as much as they can from anyone, in exchange for votes.
You say: "Do you believe the government can take away income from the business, yet force the business to pay the landlord?" First of all, they are not taking away income, they are forbidding an activity that leads to income. They shouldn't close businesses, but if they do, NO, I do not believe the state can forgive a private debt between two individuals (the lease). Doing so would be making "two wrongs" instead of one.
Also, the state doesn't "force the business to pay the landlord" ...it's a contract the owner made voluntarily. It's the state's JOB to enforce contracts, otherwise we have no civilization or economy.Occupying a space is complimentary? That is not how it works. Your entire argument is that a property is a product or service. Now you are saying if a business is occupying that space, it is no longer product or service? When you force a business to close, you are taking away income. Just like telling tenants they don't need to pay rent is taking away income. Forcing businesses to close in this instance is for public use. It has been established that public use is simply defined as for benefit of the public. It doesn't mean the public has to physically occupy it. In this context forcing a business to close is to prevent the spread of virus for the benefit of the public. It is allowable for the government, but they must compensate.
As I have said, I don't support this bill. I think it is unconstitutional. But let's be realistic, the government does all sorts of things that stomp on the rights of business owners. Rent control forces a property owner to charge under market value. Rent control has held up in the supreme court, under the logic it is for the public good and doesn't give preference to one owner over another.
- Rental Property Investor · Closter, NJ · Member since 2015 · 884 posts · 722 votes6y
I have always wondered why Landlords don't organize and protest the same way Tenant groups do. Tenant advocates have big mouths - Landlord advocates need to have bigger mouths. The N.J. town where I invest, happens to have a ludicrous rent control law. The town has a lot of apartment buildings, and while I attend EVERY Rent Leveling Board Meeting, the other Landlords in town don't ever show up. Like a bunch of sheep they submit their monthly spreadsheets of the apartment leases that are coming due, and the amount of increase (which is a meager 1 percent). These Landlords never mobilize, complain, file tax appeals, etc. They let the government dictate how much they can charge for rent. Just a bunch of sheep going to the slaughter.
Further, the rent moratorium and rent control laws violate the Fifth Amendment’s “Takings Clause” and the Fourteenth Amendment’s “Due Process Clause.” The rent law amounts to an unjust taking because it severely limits when and how a landlord can increase rents on rental housing, effectively eliminating an owner’s ability to use his property for anything other than stabilized housing. As for due process, rent control laws don’t fulfill their stated purpose of promoting affordable housing.
The new NY lawsuit further alleges that the law goes against the Constitution’s “Contracts Clause,” which bars governments from passing legislation in order to interfere with private contracts. The complaint claims the new law does just that because landlords are now required to continue charging preferential rent — a rate lower than the legal rent — until an apartment is vacated. Previously, landlords could raise that rent to the legal limit when the lease was renewed. The state’s housing regulator has specified that tenants who had a preferential rent in place or had a renewal lease with an occupancy date on or after June 14, 2019 the new law applies. - Lititz, PA · Member since 2013 · 595 posts · 272 votes6y
All NY housing providers need to organize and check out.
They are doing great advocacy work on this issue and others! - Real Estate Agent · Scottsdale, AZ · Member since 2019 · 448 posts · 320 votes6y
Originally posted by @Judy Parker:
I have always wondered why Landlords don't organize and protest the same way Tenant groups do. Tenant advocates have big mouths - Landlord advocates need to have bigger mouths.
There are a lot more renters than landlords, so politicians will say whatever they need to in order to get their votes.
@Joe Splitrock: You misunderstood my sentence. I meant that CUSTOMERS occupying the bar's floor space is complimentary, furnished by the shop owner.
- Real Estate Broker · New York, NY · Member since 2013 · 125 posts · 63 votes6y
Regarding renters and Landlords, nobody is getting anything for free from this bill, Tenants are not going to be given "free rent" and Landlords are not giving anything away for free.
This bill is to defer rental payments for 90 days not to forfeit rental payments for 90 days. Tenants are still obligated to pay their Landlords the full rental amount outlined in their lease agreement before the end of their lease term. Landlords already know how much they can expect to receive in rent at the end of the Tenants lease term. It doesn't make a difference if you receive 12 monthly payments or 9 monthly payments the dollar figure doesn't change.
Tenants will simply defer payments for the next three months and will have to make it up on the back end after things normalize. The question is, will things normalize in three months? And can tenants realistically afford to defer rental payments for three months onto the remaining term of their lease if they are unemployed (probably not). So now what? In order for a renter forbearance to work, you now need to move up the channel to Landlords and banks. Banks need to issue a forbearance to Landlords for 90 days so they can defer debt payments for three months. I believe this is also mentioned in the aforementioned bill.
Even if a bank issues a 90 day forbearance, the Landlords still owes these three months of debt payments they just don't go away. Nothing has been forfeited in terms of payment from the Tenant, Landlord or bank. Now you would think the banks would just follow suit and extend loans out three months on the back-end for Landlords? However, remember, you are also dealing with private and Non-QM lenders (who are just private investors) and are in the same position as you except they are at the end of the food chain.
It just comes down to the timing of payments with Tenants, and Landlords, and banks and who is allowed a temporary forbearance and who is not -- but nothing is being forfeited or given away for free. The annual rent the Tenant is obligated to pay the Landlord per their lease doesn't change, and the Landlords annual debt payments he/she is obligated to pay the lender on the property does not change.
Out of the 6 lenders I am working with only 1 has refused to issue me a forbearance on my properties and it's a commercial loan.Also, i'm confused why people think the government would classify Landlords in the same bucket as small businesses when it comes to governmental assistance in a time like this. Again, a forbearance is simply a deferral and not a forfeiture, the government is not going to be as generous as issuing Landlords money. When you mandate the closure of a small business, there is no deferral on that businesses income, they simply lose it and how do you gauge how much income that business lost? The answer is you can't. That's exactly why all of these stimulus packages and loan programs are pivoted to small businesses.
- Member since 2017 · 66 posts · 91 votes6y
Everything is fine until these renters move in mass to other states. Good luck in getting your rent in arrears then.
Tenants pay when it is due unless the Landlord and Tenant agree to a forbearance.
Government doesn't have the power to change the terms of a contract entered into freely. What should be said is tenants can cancel their lease without penalty and move.
The landlord tenancy laws in the country and especially in the NE are anti-landlord.
The lesson is everyone and especially tenants should have been saving so they have a cushion.
If the whole country was fiscally responsible we wouldn't be having this discussion right now.
- Lititz, PA · Member since 2013 · 595 posts · 272 votes6y
Originally posted by @Christian D.:
Regarding renters and Landlords, nobody is getting anything for free from this bill, Tenants are not going to be given "free rent" and Landlords are not giving anything away for free.
This bill is to defer rental payments for 90 days not to forfeit rental payments for 90 days. Tenants are still obligated to pay their Landlords the full rental amount outlined in their lease agreement before the end of their lease term. Landlords already know how much they can expect to receive in rent at the end of the Tenants lease term. It doesn't make a difference if you receive 12 monthly payments or 9 monthly payments the dollar figure doesn't change.
Tenants will simply defer payments for the next three months and will have to make it up on the back end after things normalize. The question is, will things normalize in three months? And can tenants realistically afford to defer rental payments for three months onto the remaining term of their lease if they are unemployed (probably not). So now what? In order for a renter forbearance to work, you now need to move up the channel to Landlords and banks. Banks need to issue a forbearance to Landlords for 90 days so they can defer debt payments for three months. I believe this is also mentioned in the aforementioned bill.
Even if a bank issues a 90 day forbearance, the Landlords still owes these three months of debt payments they just don't go away. Nothing has been forfeited in terms of payment from the Tenant, Landlord or bank. Now you would think the banks would just follow suit and extend loans out three months on the back-end for Landlords? However, remember, you are also dealing with private and Non-QM lenders (who are just private investors) and are in the same position as you except they are at the end of the food chain.
It just comes down to the timing of payments with Tenants, and Landlords, and banks and who is allowed a temporary forbearance and who is not -- but nothing is being forfeited or given away for free. The annual rent the Tenant is obligated to pay the Landlord per their lease doesn't change, and the Landlords annual debt payments he/she is obligated to pay the lender on the property does not change.
Out of the 6 lenders I am working with only 1 has refused to issue me a forbearance on my properties and it's a commercial loan.Also, i'm confused why people think the government would classify Landlords in the same bucket as small businesses when it comes to governmental assistance in a time like this. Again, a forbearance is simply a deferral and not a forfeiture, the government is not going to be as generous as issuing Landlords money. When you mandate the closure of a small business, there is no deferral on that businesses income, they simply lose it and how do you gauge how much income that business lost? The answer is you can't. That's exactly why all of these stimulus packages and loan programs are pivoted to small businesses.
Your interpretation of the bill is incorrect. It is a total cancellation (forfeiture) of rent. It is not a deferral. This is why everyone is upset!
This is different than a small business being told to close. This is telling the small business they have to stay open and give their product and labor away for free for 3 months without reimbursement! This is the problem! It is making people work without reimbursement (slavery). While the product (housing) is free, do the housing providers also not pay someone to mow the lawn, repair heating systems, repair plumbing systems, fix a roof leak?
Again, there are unemployment benefits coming in force. They have always been, and continue to be, intended for expenses such as rent.
- Real Estate Broker · New York, NY · Member since 2013 · 125 posts · 63 votes6y
@William Coet this is the bill I am referring to. Am I missing something?
https://www.nysenate.gov/legislation/bills/2019/s8125 - Real Estate Broker · New York, NY · Member since 2013 · 125 posts · 63 votes6y
Again, the Governor has already made it clear he does not intend to sign any bill that would allow "cash strapped tenants" rent forgiveness or forfeiture -- even with NYC as bad and restrictive as it is for Landlords, this would never happen.
https://therealdeal.com/2020/03/31/its-scary-landlords-praying-tenants-pay-april-rent/?utm_source=internal&utm_medium=after_article&utm_campaign=related_articleThe language in the actual bill clearly states rent suspension.
I think the original article that was posted at the beginning of this thread was incorrectly interpreted.
- Lititz, PA · Member since 2013 · 595 posts · 272 votes6y
@Christian D. Taken directly from bill:
"PURPOSE: To waive small business commercial and residential rent for 90 days" This is a permanent cancellation without requirement for reimbursement by the tenant or the government FYI....County of Los Angeles says it against the state law to not collect property tax on April 10th....I'm paying $22k for my primary asset.
Here's a blurb from the site, that says it all:
I understand that this is a very stressful time, especially for those suffering direct effects from this public health crisis, and my office is committed to helping in any way we can. Los Angeles County property owners affected by the COVID-19 virus may have late penalties cancelled if they are unable to pay their property taxes by the April 10 deadline.
We have no authority to extend the April 10 deadline, as outlined by State Law. However, beginning on April 11, the day after property taxes are due, people unable to pay on time for reasons related to COVID-19 may submit a request for penalty cancellation online. The department has set up a special team to process these requests for those who demonstrate they were affected by the outbreak.
We encourage all property owners who can pay their taxes on time to do so. This revenue helps keep the government running and providing vital services that the public relies on, especially in times like these.
If we don't get rent, they don't get property tax, firemen don't get paid, EMT, don't get paid, County Hospitals don't get paid, Sanitation services fail, etc, etc.
Everyone should pay as much as they can, everybody should help as much as they can, nobody should force anybody to do anything.
- Real Estate Broker · New York, NY · Member since 2013 · 125 posts · 63 votes6y
@William Coet you can't say it's a permanent rent cancellation because it doesn't say that.
I understand the word "waive" is vague, but I had assumed it was already obvious to everyone on this thread the State and City of New York does not have the governmental power or constitutional authority to tell every renter in New York they can completely forfeit their rents to Landlords.
I live and work in Manhattan, I'm both a Tenant and Landlord here, I'm not biased. But I can tell you this bill is a 90 day waive/suspension rent/mortgage forbearance.
@Christian D. The bill has been reviewed by an attorney that is lobbying against it in Albany that sends out daily updates to her contact list. The bill is for CANCELLING RENT, FORGIVING RENT however you want to phrase it the point is rent for those 90 days will not have to be paid back PERIOD.
So for 90 days I will still have expenses but will not receive any income.
@Christian D. please consider going back and editing your post to reflect the correct information as it hurts when we have mis information going around and someone who will reads your post will get confused and then they tell 5 more people and thats how rumors start. Just like today their was a website showing that the it has already passed which is false.
And as for your argument that it would be unconstitutional well me and you agree but a bill can still get passed and then if we feel it is then we would have to sue. So yes NY State can pass this and with courts being closed please tell me how can we sue to stop it?
@Christian D.: The bill says (I am copying and pasting directly from the bill):
"...shall have all rent payments suspended for ninety days following the effective date of this act. Such residential tenant or small business commercial tenant shall not and shall never be required to pay any rent waived during such time period."
I appreciate your confidence that the bill will never be passed, but why you ARE so confident? I wish I felt that way!
- Lititz, PA · Member since 2013 · 595 posts · 272 votes6y
@Christian D. Below is excerpt taken from proposed bill (if you read below the first few paragraphs you will see it, you may need to click on the arrow down): This makes me wonder, will there be another bill that states lawn care contractors, the plumbers, and the heating service people all have to work for free for the next three months? This is ridiculous
"Such residential tenant or small business commercial tenant shall not and shall never be required to pay any rent waived during such time period." - Real Estate Broker · New York, NY · Member since 2013 · 125 posts · 63 votes6y
Originally posted by @Tony T.:
@Christian D.: The bill says (I am copying and pasting directly from the bill):
"...shall have all rent payments suspended for ninety days following the effective date of this act. Such residential tenant or small business commercial tenant shall not and shall never be required to pay any rent waived during such time period."
I appreciate your confidence that the bill will never be passed, but why you ARE so confident? I wish I felt that way!
Thanks for clarifying -- not sure how I missed this. You're absolutely right this bill is unprecedented. But I still don't think it will pass, I would be a little more distraught if the Governor didn't speak publicly but these are strange times and it's April fools so who knows.
Good luck to everyone -- stay healthy and safe.
- Lititz, PA · Member since 2013 · 595 posts · 272 votes6y
@Christian D. Thanks for the update!
@Chris De Celle: Thank you for those 2 articles you posted. They are super informative! I felt a little better after reading them in detail.
For those who have got this far but didn't read all of the posts, governor Cuomo says:
(1) [That he] does not have any plans to offer additional assistance outside of an already existing executive order that prevents landlords from evicting tenants for non-payment for three months;
(2) “It’s not that you won’t owe rent at one time, right, because you signed a contract;”
(3) That his executive order to stop evictions for 60 days “solves all of the above. I think our policy answers it,” he said. “It does not mean you won’t owe rent” at some point.
Again, thanks Chris for pulling this info up and posting it here!- Lititz, PA · Member since 2013 · 595 posts · 272 votes6y
To be clear, one election can change everything. People have to contact housing provider associations and vote.
This type of behavior isn't only bad for housing providers, it's bad for tenants too. Housing quality will undoubtedly deteriorate if this behavior by self-serving politicians is allowed to manipulate the minds of people who don't know any better. Just take a look at the housing in countries where a small group of politicians promises the world and uses the government to take over property and the lives of private citizens.
Housing providers need to wake up and get organized. We provide housing, and most of us do it very well. Tenants will benefit from higher quality housing and service that they won't receive if these self-serving politicians get away with lying to them for their votes. I wonder why these politicians are willing to take our income away but not surrender their salaries and excellent health insurance for the next three months, while still working for free? One word: Votes
In NY State these folks seem to be on the ball: https://www.facebook.com/UNDER...Here is one of their videos that they recently presented to NYS Representatives on this subject:
Search these words: under one roof advocacy you tube - 6yJoe SeegersPro MemberInvestor · Appleton, WI · Member since 2011 · 29 posts · 29 votes
like judy parker from new jersey said ,you landlords in new york have to get together.our landlord chapter in wisconsin is getting all our chapters together and talking with are local reia groups together to put extra money toward our lobbyist and the state capital and going to try to get all our members to call our local rep at state to say are say in this matter.because we donot want somebody to submit a bill like your politition.but really we should start a grassroots national group that just lobbyist us on the national scene.
- Wholesaler · Philadelphia, PA · Member since 2016 · 124 posts · 81 votes6y
Originally posted by @Llewelyn A.:
Originally posted by @Franky Aikens:
I've been reading through the comments of the livid landlords about this new bill. Totally understand why they'd be up in arms. The originator of this post called it "theft" by the government. It was also assumed and stated that there wouldn't be any relief for the landlords, only the tenants.
But then I read through the proposed bill on the NY State Senate Bill site I found the language below. Correct me if I'm wrong, but according to the language below, landlords WILL get relief and the form of suspended mortgage payments for the same length of time rents will be suspended. Am I missing something here?
(b) (i) Any person or entity who faces a financial hardship as a result of being deprived rent payments for property pursuant to this section shall receive forgiveness on any mortgage payments for such property for ninety days, in an amount determined by the following frac- tion multiplied by such mortgage payment, up to the total dollar amount of lost rent: (A) The numerator shall be the total amount of rent payments suspended for his or her tenants over the ninety day period laid out in this section;Frank, as a NYC Landlord with Properties in B Neighborhoods, 90% of my tenants make over $100k EACH and couples make over $200k per couple.
Many of my tenants will have over $100k of Savings.
There is no MEANS TEST on the proposal.
There is a reason why Landlords like me have required criteria when we approve a new Tenant. It's because they have the MEANS to support themselves should they lose their jobs, even for a prolonged period of time.
Part of accepting a low CAP Rate (5% or below) on NYC Properties is to balance it out with Quality and consistent income stream.
While I don't mind helping Tenants that are NOT WEALTHY.... I absolutely mind helping tenants that would otherwise be in the top 10% economically.Why isn't there a Means Test in this proposal?
In fact, it should be done with all Rent Stabilized Apts as well. We should NOT be subsidizing Wealthy people just because we collect their rent.
Does this make sense?
I see your point. I do think the means test needs to be done by you as the landlord. Candid conversations with each of your tenants about what they are able to pay to would be necessary. It sounds like you have quality tenants that have abundant savings so they can continue to pay their bills should unexpected events impact their income.
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