New York State Senate Bill S8125A is back in the headlines after 60,000 New Yorkers reportedly requested for the bill to be passed via the New York Senate’s website.  Support for the bill is growing rapidly, earning the backing of Presidential Candidate Bernie Sanders, who tweeted his support over the weekend.

The bill seeks to provide relief to individuals and small businesses who have lost income and/or closed their businesses as a result of COVID-19.  Calls for this type of relief have exploded on thousands of social media accounts, marked by hashtags like #cancelrent and #rentfreeze.

As currently drafted, the bill:

  • completely waives rents for 90 days, with qualifying tenants having no obligation to make up the payments
  • automatically renews leases at the same rent rate that would have otherwise expired during the 90 days
  • prohibits imposition of late fees
  • includes a corresponding waiver of mortgage payments by landlords who would suffer from the rent relief provisions in the bill, with no obligation to make up those payments

The bill is currently being challenged as an unconstitutional taking, and alleged to be plagued with fatal ambiguities. It has been reported that Governor Cuomo is not currently supporting the bill, believing his existing prohibition on evictions will provide the relief tenants need.

As a result of the “stop work order” on construction in New York State, many projects are now being suspended. In shutting down, it is crucial that the workforce and the public are protected. The Department of Buildings (DOB) offered guidance on how to do that, and what is required for a suspended project, in Buildings Bulletin 2020-004.

As a project owner or contractor, your obligation to protect the personnel and the public extends both to typical construction hazards as well as the novel coronavirus. The Bulletin specifies twenty-two minimum requirements for sites generally, eight specific guidelines for projects suspended in the excavation/foundation phase and an additional two for projects in existing buildings. These measurers are wide ranging and include both one-off acts such as sloping of cuts to prevent erosion and securing equipment to ongoing actions such as maintaining watchpersons and implementing rodent control plans. The guidance also notes that additional measures may be ordered by the DOB based on site-specific conditions.

The ongoing COIVD-19 pandemic is presenting a unique challenge for everyone involved in the construction industry. All owners and contractors should review the Bulleting to confirm compliance, but must recognize that each job may require additional step no covered by the Bulleting to ensure construction sites are safely shut down and legally compliant.

In keeping with New York Governor Cuomo’s Executive Order No. 202.13., the New York State Department of Financial Services (DFS) adopted an emergency regulation to provide relief for New York consumers and small businesses experiencing financial hardship due to COVID-19. The DFS regulation, among other things, requires New York State regulated issuers of property and casualty insurance to provide relief to consumers and small businesses experiencing financial hardship due to COVID-19 by allowing deferment of premiums for property and casualty insurance for sixty (60) days. Premium finance agencies are also required to provide relief by: (a) granting a 60-day grace period for property and casualty policies for the payment of installment payments under the premium financing agreement; (b) allowing installment payments due but not paid during the 60-day grace period to be paid over the course of the following year in 12 equal monthly installments; and (c) waiving any late payment fees, and not report late payments to credit rating agencies, during the 60-day grace period. The relief is available for businesses with 100 employees or less, independently owned and operated and resident in the State of New York.

The emergency amendments can be found at Section 405.6 of Title 3 and Part 229 of Title 11 of the Official Compilation of Codes, Rules and Regulations of the State of New York.

On March 30, 2020, the New York City Department of Buildings (DOB) offered guidance on what “Essential” construction means for a project with an affordable housing component under the updated Empire State Development guidelines issued on Friday, March 27, 2020 under Governor Cuomo’s Executive Order 202.6. The DOB offered clarity on whether a project qualifies under the affordable housing exception to the state-wide stop work order. The text of the guidance reads:

Affordable housing: Construction work on public housing, or a private or multiple dwelling or real property that is a new building (NB) or that is 100% vacant; or is work on unoccupied public housing units for the designation as housing for specific populations (i.e. shelter set aside, domestic violence referrals), or work on the exterior to address emergency conditions requiring immediate corrective action, set forth in Section 1(a)(iii) or within public housing, correction of critical systems for seasonal preparedness for the 2020-2021 heating season of an existing public housing building. Construction work on a private or multiple dwelling or real property that is a new building (NB) or that is 100% vacant that is now used or will be converted to such use: (i) For the provision of affordable inclusionary housing or mandatory inclusionary housing pursuant to the New York city zoning resolution; or (ii) Where no less than 30% of the residential units are subject to a regulatory agreement, restrictive declaration, or similar instrument with a local, state, or federal governmental entity or a local housing authority in a city with a population of one million or more.

First, the project must either be a new build, 100% vacant, on unoccupied units in an otherwise occupied public housing building which are to be set aside for specific groups, exterior work on an occupied public housing building, or correction of critical system for seasonal preparedness on public housing. Second, if the project is not public housing but is a new build or complete renovation with complete vacancy, the project must be either (1) inclusionary housing pursuant to a program offered or required under the New York City Zoning Regulation, or (2) include at least a 30% affordable set-aside.

Inclusionary developments, projects which typically permit developers greater overall density and other benefits in exchange for some portion of the project being set aside for lower income residents, are not necessarily obvious to outside observers or contractors on the project. While New York City provides a resource for determining which sites are in the Inclusionary Housing Program here, the resource may not cover all qualifying projects throughout the City. Accordingly, project owners should provide evidence to their construction team that the project qualifies and that work should continue.

Determining whether a project qualifies under the affordable housing exemption will be a project-specific determination, so it is important to maintain clear open lines of communication in order to avoid unnecessarily delaying a project where permitted to work or incurring a $10,000 fine where not.

On March 26, 2020, Governor Cuomo directed modifications to the guidance on his Executive Order 202.6  including changes to treatment of construction as an “essential” service.  The previous guidance on “essential” businesses included “construction” broadly as an essential service, with a few examples such as “skilled trades” and “construction firms and professionals for essential infrastructure or for emergency repair and safety.”   

 The new guidance issued by the Empire State Development Corporation on March 27, 2020 is widely viewed as imposing broad restrictions on the construction industry.  The guidance states that all “non-essential construction must shut down except emergency construction.”

 Examples of emergency construction are any projects that are “necessary to protect the health and safety of the occupants.”  Projects may also be continued if it would be unsafe to stop work, and in that instance, work should continue until the site can be safely shut down.  

 Additional clarity is provided regarding what constitutes “essential” construction, though the list is not exhaustive.  Essential construction includes work on “roads, bridges, transit facilities, utilities, hospitals or health care facilities, affordable housing, and homeless shelters.”  

 The guidance also makes it clear that even if construction is permitted (because it is essential or emergency), the work must adhere to the safety requirements of “maintaining social distance, including for purposes of elevators/meals/entry and exit.”  Any project that cannot adhere to the distance and safety best practices must close.  Notably, the guidance indicates that solo work is not restricted by the guidance, i.e., a single worker may be on a project site performing construction services.

 The restrictions set by the guidance will be enforced by the state in coordination with the local government and may include fines of up to $10,000 per violation.   As always, it is safest to consult with counsel before continuing work to avoid adverse action.