South Fork Landlords Concerned Eviction Moratorium Is Being Abused - 27 East

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South Fork Landlords Concerned Eviction Moratorium Is Being Abused

Brendan J. OReilly on May 26, 2020

Governor Andrew Cuomo’s moratorium on evictions during the COVID-19 crisis is overlapping with the first summer rental season that landlords are prohibited from collecting rent for a tenant’s entire stay upfront — though whether landlords really cannot get paid in advance is still a matter of debate. Either way, the convergence of the two issues had raised concerns among landlords and brokers alike that laws and executive orders meant to protect renters who are down on their luck can be abused by squatters who have the ability to pay but choose not to.

The worry brought about by the state’s housing reform adopted last year, the Housing Stability and Tenant Protection Act of 2019, is that renters could lease a house for the entire summer but quit paying after the first month, either skipping out for half the season or continuing to use the house while refusing to pay. Now, the governor’s executive order prohibiting evictions through August 20 and the fact that courts have been closed since late March has meant that landlords have no immediate recourse when their tenants stop paying rent.

Though the governor’s moratorium does not allow evictions until August 20, it does not waive rent payments and it does come with caveats. With Long Island courts now on the cusp of reopening, landlords can take action against bad actors who are collecting income but refusing to pay rent.

“To be able to take advantage of this moratorium on evictions, you either have to be eligible for unemployment insurance or otherwise have a financial hardship related to COVID, which, I think with seasonal rentals is a fairly high burden to have to prove — that you’re in a seasonal rental and away from your house and you can afford that, but you have a financial hardship at the same time,” explained New York State Assemblyman Fred W. Thiele Jr. of Sag Harbor.

Some South Fork renters who have invoked the governor’s moratorium in their refusal to pay rent are year-round or off-season tenants.

Paula Rosado and her husband, Giancarlo Bonagura, have been waiting for a tenant to leave their house in Sag Harbor ever since his lease ended on April 30. They are residents of Manhattan who planned to use their Sag Harbor home for themselves in May before renting it out for Memorial Day to Labor Day.

Ms. Rosado said Monday that during a scheduled walk-through on April 30, they discovered extensive damage to the house and the yard, including broken windows, doors ripped off hinges, holes in the walls and ceiling, and an irrigation system that was dug up and destroyed by two German shepherds that also destroyed rugs and furniture — despite the lease expressly prohibiting dogs.

Ms. Rosado said the lease was for October 15 through April 30 at a rate of $3,600 per month.

“The person is still at the house, and they haven’t paid since March,” she said. “And they also owe not only for April and May, but also back-utilities since February.”

Though the man was paying $3,600 per month for an off-season rental, the house could have fetched $15,000 for a one-month rental in May, according to Ms. Rosado. For Memorial Day to Labor Day, they had an offer of $55,000 for the season, she added.

“We use it as our home as much as we can when we’re out here, but also we need it for additional income,” Ms. Rosado said. Even when the tenant does leave, she said, it will take time to fix the house and lawn and replace the furniture and rugs so it is suitable to be rented out again.

“We’re hoping that he will acknowledge the damage that is done and he will pay us for April, and the seasonal rate for May and all the past utilities, and give us some sort of damages, and leave as soon as possible,” Ms. Rosado said.

The man is a real estate broker representing listings of as much as $22 million who drives a Range Rover and wears a Rolex and his family owns two waterfront properties on the South Fork, she said. “There is no indication that he is experiencing financial hardship.”

Scott Rubenstein, the owner of the Clubhouse in East Hampton and the managing partner of East Hampton Indoor Tennis, is a landlord with multiple properties in East Hampton. He said Monday that six of his tenants, citing the governor’s executive order, stopped paying rent and told him that there is nothing that he can do until August 20. He said he told them, “You are still obligated to pay the money — I just can’t evict you.”

Mr. Rubenstein said he agrees with the governor’s order because some people truly can’t afford to pay their rent and will have no place else to go. “It’s just a shame that people are taking advantage of it,” he said.

Some of the tenants are working and some are collecting the equivalent of $27 per hour in unemployment benefits, Mr. Rubenstein said, noting that they would normally earn less money than that working during the slow months of March and April. Despite having the ability to pay rent, they are refusing to, he said.

One of the six finally offered Monday to pay some rent he owes, while other tenants in other houses have been paying uninterrupted during the whole crisis, Mr. Rubenstein said. The nonpaying tenants are all young people who apparently think they are receiving a windfall, he said, and what they don’t appear to understand is that the governor only put a stop to evictions until August 20 — the governor did not waive rent payments. “I think they don’t get that they still owe the rent,” he said.

He noted that he charges below-market rent and is not looking to evict anyone in order to rent the houses out for the high prices that Hamptons rentals are fetching in the COVID-19 crisis. He just wants his tenants to pay the same rate they always have.

He also pointed out that he is still paying the mortgages and the electricity, cable and internet bills — even getting the bill for a movie a tenant rented. “I’m not going to be the person who turned the electricity off or turned the cable off and they can’t get WiFi or watch TV,” he said.

After the pandemic, Mr. Rubenstein said, “a lot of people are going to be judged by their actions that they decided to take.”

Mr. Thiele said Friday that the state housing reform was intended to apply to tenants’ permanent housing — not seasonal rentals. In the history of housing law in New York, the law is applied to year-round housing, he said. He has introduced legislation to clarify that if a rental term is for 120 days or less, landlords are permitted to collect rent for the entire term upfront.

“The Housing Stability and Tenant Protection Act creates a question of whether or not you can collect all the rent upfront. I wouldn’t say it says you can’t do it,” Mr. Thiele said. “The purpose of my legislation is to clarify that because it’s not expressly stated. But I still think it’s an open question legally.”

The State Legislature returned to session this week. Mr. Thiele said the first week will be spent dealing with COVID-related concerns, but the Legislature will be back in session in the weeks to come and will take up other legislation.

Mr. Thiele said he has also contacted the governor’s office to express that an easier way to address abuse of his executive order — beyond the unemployment or financial hardship requirement — would be to just exempt seasonal rentals. “Let’s put it in black and white,” he said. “Seasonal rentals was never the intent.”

He reported that his office has not heard complaints from landlords. It’s been the opposite: He’s had calls from renters who want help stopping illegal evictions.

Governor Andrew Cuomo instated the eviction moratorium in March, originally through June 20, prohibiting residential and commercial evictions for nonpayment of rent. In May, the governor extended the order to August 20 with the added caveat that the order only applies when the tenant is qualified for unemployment benefits or unable to pay rent because of a hardship related to COVID-19.

“It can’t just be that you’re rich and you don’t want to pay and you want to stiff the landlord,” Mr. Cuomo said when asked about the moratorium during his daily COVID-19 briefing on Monday.

He reiterated that there must be a hardship related to COVID-19. “You have to be in a position where you can’t pay,” he said.

Though the eviction moratorium is scheduled to expire August 20, the date is not set in stone.

“Between now and August is a lifetime, and if we’re still in this chaos in August, we’ll figure it out then,” Mr. Cuomo said.

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