Bill Morris in Board Operations on January 20, 2022
Promises, promises. Co-op and condo advocates got a reassuring promise from two sponsors of the hotly contested Good Cause Eviction bill during a Jan. 7 hearing. State Sens. Julia Salazar and Brian Kavanagh, New York City Democrats, promised that the bill, known as S3082, is aimed at protecting rental tenants from abuses by commercial landlords — and will not be applied to housing cooperatives or condominiums.
Many co-op and condo advocates cheered the senators’ reassurances. “We were extremely pleased to hear their comments,” the Presidents Co-op & Condo Council said in a statement after the Jan. 7 hearing, “and we thank them for clarifying the intent of this statute.”
Alexander Lycoyannis did not join in the cheering. “I heard the senators repeatedly say that this bill doesn’t apply to co-ops and condos,” says Lycoyannis, a partner at the real estate law firm Rosenberg & Estis who testified at the hearing. “The problem is that if you read the statute, it does apply. The words in the bill have broad implications. The bottom line is that despite what Julia Salazar might say about the bill’s intent, that’s not reflected in the bill as written. They would have to amend the language of the bill.”
The Good Cause Eviction bill arrives just as the pandemic-inspired moratorium on evictions expired on Jan. 15. A sort of sequel to the sweeping Tenant Protection Act of 2019, it would allow commercial landlords — and, possibly, co-op and condo boards — to evict tenants only for specified “good causes,” including but not limited to non-payment of rent, causing a nuisance, using the premises for illegal purposes or refusing to provide access to an apartment.
As an example of the bill’s imprecise wording, Lycoyannis cites the bill’s ban on rent increases greater than 3% or one-and-a-half times the annual percentage change in the Consumer Price Index.
“What the statute actually says is that a rent increase can’t be ‘unreasonable,’” Lycoyannis says. “Thus, as written, S3082 permits a tenant to challenge even the smallest imaginable rent increase as unreasonable, which would, in turn, force the owner to spend time and resources justifying any such increase before it can hope to obtain a judgment for the rent owed.”
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Which leads to another criticism of the bill. Whether co-ops and condos wind up being exempt from it or not, Lycoyannis and other critics say the bill will likely produce a tsunami of litigation. And such litigation might wind up defeating the bill’s purpose.
“The ‘good cause’ bases (for eviction) would all require discovery and extensive fact-finding to establish,” Lycoyannis stated in his testimony to the Senate. “The aim appears to be not to give owners a reasonable basis to retake possession of their own property, but to render the prospect of litigating eviction proceedings so onerous, time-consuming and expensive that owners would be incentivized to permit tenants to stay in possession even where ‘good cause’ nominally exists.”
The bill has sent the Albany lobbying machine into high gear, and Lycoyannis is hopeful that the bill won’t pass. “The latest I’ve heard is that it doesn’t have the support of the majority of the Legislature overall,” he says. “A lot of senators, based on the testimony at the hearing, are concerned that the bill would reduce property values and tax collections. And it could deliver a severe blow to co-op and condo finances.”
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