Following up on our August 3 client alert: On August 12, 2021 the United States Supreme Court delivered New York landlords a major victory by issuing a temporary injunction barring enforcement of Part A of the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 (the “Residential Moratorium”).
In Chrysafis et al. v Marks, 594 U.S. ____ (2021), the Supreme Court held that the Residential Moratorium’s hardship declaration mechanism, which “generally precludes a landlord from contesting th[e] certification [set forth in the signed hardship declaration form] and denies the landlord a hearing . . . violates the Court’s longstanding teaching that ordinarily ‘no man can be a judge in his own case’ consistent with the Due Process Clause,” and as a result enjoined enforcement of the Residential Moratorium. A copy of the ruling is available here.
Accordingly, at the current time, landlords are not required to serve the hardship declaration form together with pleadings and predicate notices as the Residential Moratorium had previously mandated.
Some cautionary notes are in order. Various New York State legislators have proposed extending the Residential Moratorium to October 31st. Such an extension, if enacted, would likely involve an alternative moratorium mechanism that complies with the Supreme Court’s ruling by providing some form of hearing in connection with a tenant’s hardship claims. Thus, although landlords are no longer required to serve hardship declarations, they may elect to continue to do so in order to foreclose possible arguments about the retroactive application of any Residential Moratorium extension. Moreover, the Supreme Court’s ruling does not mean that the New York City Civil Court and other landlord-tenant courts in New York State will speed up their current glacial pace, with most residential cases not having moved at all since March 2020. In addition, even if New York State does not extend the Residential Moratorium, New York landlords may be constrained by the application of the federal CDC moratorium, which is also being challenged in federal court.
On the commercial front, the COVID-19 Emergency Protect Our Small Businesses Act of 2021 (the “Commercial Moratorium”) contains a hardship declaration mechanism that is virtually identical to that contained in the Residential Moratorium. However, the Commercial Moratorium was not before the Supreme Court and its current status is not immediately clear. Nevertheless, with the Supreme Court’s holding that the hardship declaration mechanism violates due process, it appears certain that the Commercial Moratorium will not be extended beyond August 31 in its current form, if at all.
However, despite the prospect of a Residential Moratorium extension or application of the CDC moratorium, for today, owners can celebrate the fact that the highest court in the land has vindicated their constitutional rights by ruling that a self-serving attestation will not prevent them from seeking judicial relief.
If you have any questions about how to move forward in light of the Supreme Court’s ruling, and more generally about the current state of the law in this area, please do not hesitate to contact us.