Landlords at an impasse with tenants as rent moratorium extends through Aug. 20

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Landlords at an impasse with tenants as rent moratorium extends through Aug. 20
Gov. Andrew Cuomo offered guidelines on how districts can reopen schools Monday. (Photo courtesy of Wikimedia Commons)

While tenants throughout New York have applauded Gov. Andrew Cuomo’s decision to extend a moratorium on rent payments to landlords and ensure no evictions would occur, some landlords find themselves stuck between a rock and a hard place with property tax deadlines looming.

Phil Hershkowitz, the owner of Roslyn’s Imperial China for 40 years, also owns several properties rented out for retail use. Hershkowitz said his businesses always saw success until the coronavirus pandemic swept through Long Island in March.

“There have been times where we have gone through tremendous turmoil and always found a way to come out stronger on the other side,” Hershkowitz said in an interview. “But this was a different beast.”

On May 7, Cuomo announced a 60-day extension through Aug. 20 on the rent moratorium that was scheduled to end in June.  Hershkowitz was vocal on his disapproval of Cuomo’s decision to allow tenants to essentially live rent-free until mid-August.

“I’ve never ever had a problem paying my rent or my taxes,” Hershkowitz said. “I have one property that would be paying $14,000 a month in rent, $3,000 of which would go to paying taxes. I haven’t gotten a rent check in three months.”

The state government, Hershkowitz said, also did not take into account how unemployment checks incentivize some people to not work when they are virtually guaranteed to not be evicted.

“What [the state government] didn’t think through was that people sitting around making $600 in times like this are making more than they would be working,” Hershkowitz said. “They can stay in their house and do nothing. Why would they go to work right now?”

On Monday, Cuomo signed legislation that authorized local governments to extend the deadline for filing property tax abatements to July 15 due to the struggles people throughout the state have endured as a result of the pandemic.

“New Yorkers and businesses all across the state have suffered both personal and economic hardships from the COVID-19 pandemic,” Cuomo said. “Extending the deadline for filing property tax abatements to July 15th will help provide these individuals and businesses with some much-needed assistance to help recover from the devastating effects of the pandemic as we begin to enter a new normal.”

Pushing off payments for a month may seem like aid to Hershkowitz and others in his position, but more action needs to be done by the state, he said.

“This will hurt anyone with any commercial property or real estate,” Hershkowitz said. “The state right now is looking to bankrupt anybody with real estate.”

Hershkowitz said he has made calls to government officials on the state, county and town levels to try and find clarity in a realm of uncertainty. 

Nassau County Executive Laura Curran announced that the “Boost Nassau” Loan Program shad ecured $10 million in loans for the county’s small businesses hit hardest by the pandemic. The program is part of the state’s “NY Forward Loan Fund,” a program that targets the state’s small businesses with 20 or fewer full-time equivalent employees, nonprofits and “small landlords” that have seen a loss of rental income.

However, businesses or landlords who were already aided in the Payroll Protection Plan, like Hershkowitz, do not qualify for the loan program.

Tony DeSousa, a landlord with several East Hills properties, said his diversified portfolio has put him in a better position than other landlords but recognized the issue at hand.

“To add to this difficulty, landlords aren’t permitted to know whether their tenant has received funding from the Payroll Protection Plan,” DeSousa said.

On average, DeSousa said, it takes roughly eight months for a landlord to evict a tenant. Now, with landlords not receiving rents for nearly four months, that process could take up to a year and a half along with legal fees and general bills to be paid, he said.

Ashira Ostrow, a professor at Hofstra University, teaches courses in Property, Land Use Law, Real Estate Transactions, and State and Local Government Law. Ostrow said landlords that own commercial and residential properties have discussed negotiating with their tenants on a case-by-case basis for when rent will be paid.

“The approach the landlords are taking is to come up with a set of terms that satisfies both parties,” Ostrow said.

In discussions with landlords, Ostrow said, the range of responses with their tenants have varied. Some, she said, view the national chains as the “worst” in regards to paying rent, others laud the chains and have trouble with smaller tenants.

Hershkowitz said he encourages others to reach out and get a petition or some form of action going that implores the state government to address the problem of landlords being at an impasse with their tenants.

“Politicians can pay their tax bills, but restaurants, retails, landlords, these are the people that are at risk here,” he said.

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