If you’ve been struggling to pay the rent on your New York City apartment or end your lease because of the pandemic and fear being dragged into court, you may be relieved to know that attorneys say landlords are increasingly willing to negotiate a deal and avoid going to court.
“Tenants are in a better position than they were three or four months ago,” says Sam Himmelstein, a tenant attorney with the law firm Himmelstein, McConnell, Gribben, Donoghue & Joseph (and a Brick Underground sponsor).
This is a new trend for some landlords. Many previously resisted making a deal and were at most willing to defer rents while they held out for government assistance. An impasse at the federal level and New York state budget deficits make it increasingly unlikely there will be any rent subsidies or relief for the city’s tenants or landlords.
Many tenants are struggling right now. Adam Frisch, managing principal at Lee & Associates Residential NYC, which represents small building owners in Manhattan, previously told Brick that he is getting requests for about 10 leasebreaks a day because of the pandemic.
“Most landlords understand. If tenants honestly can’t pay, they will let them off,” he says. It’s cheaper to let them go rather than track down tenants and take them to court. They are inclined to write off the loss, fix up the apartment, and get it on the market again quickly, he explains.
An eviction ban remains in effect if you’ve been impacted by the pandemic—and a landlord hoping to get a money judgement through civil or state supreme court may have to wait years for the court authority to pursue a tenant after they’ve left an apartment. Even then, it might be pointless for a landlord to try to collect. “If someone doesn’t have any assets, that’s a worthless piece of paper,” Himmelstein says. “That’s why you are beginning to see some bargaining.”
Many landlords promised to work with their tenants and show flexibility during the pandemic. Others have already threatened to involve collections agencies to go after unpaid rent. Each landlord has their own rules, Himmelstein says.
Depending on how much you owe in rent, it’s possible your landlord will offer you a rent reduction, or even a few months of rent forgiveness along with a renegotiation of your lease. They may also be increasingly willing to take your security deposit as a rent payment, something that was authorized by an executive order earlier in the year. Of course there is always the risk your landlord will refuse to budge and decide to sue you.
If you terminate your lease early, technically you are liable until the end of your lease term but Justin C. Brasch, founding partner of The Law Offices of Justin C Brasch, predicts the courts are likely to be “overwhelmed after this pandemic and will have to figure out how to deal with such a high number of cases.” He points out some landlords may decide it’s not worth pursuing these cases and indeed some tenants are betting their landlords ultimately won’t sue them.
A landlord will be left having to calculate whether it is worth hiring a lawyer or a collection agency to get $5,000 or $10,000 in two or three years from now, Himmelstein says. “If the tenant doesn’t have assets, bank accounts, real estate, or a job—what do you have? Nothing. Not that I’m giving tenants carte blanche but on a practical level, it probably does not make sense to pursue those cases,” he says.
If the amount owed is tens of thousands of dollars, a landlord might decide it is worth pursuing the tenant, but they will still have to prove they made efforts to rent an apartment to another tenant when the lease was broken. A landlord has a duty to mitigate when a tenant breaks a lease, a responsibility that’s been complicated by so many people trying to leave the city and the rising vacancy rate. If you combine these market forces with the fact that landlords have their hands tied on what they can do to collect unpaid rent, Himmelstein says tenants have “good bargaining leverage” and should try to engage their landlords in negotiation.
“Housing court is functioning like a sloth right now—if a landlord files a non-payment case in housing court it won’t get processed meaningful until next year so if you can’t put pressure on tenants the way landlords used to be able to with litigation, the only way to do it is to make deal,” Himmelstein says.