The Ongoing Effects Of COVID-19 In Landlord-Tenant Law

• Published date: 18 August 2022
• Subject Matter: Corporate/Commercial Law, Real Estate and Construction, Contracts and Commercial Law, Landlord & Tenant - Leases
• Law Firm: Holland & Knight
• Author: Ms Francesca Morris

New York's Courts Uphold the Letter of New York City's Guaranty Law

Holland & Knight Retail and Commercial Development and Leasing Blog

New York City enacted Administrative Code Section 22-1005, known as the "Guaranty Law" prohibiting enforcement of personal guaranties and supporting commercial leases, in May 2020. The law applies to defaults that occurred between March 7, 2020, and June 30, 2021. It includes a declaration of legislative intent explaining that the New York City Council enacted the law because of the risk of financial ruin for business owners due to the COVID-19 pandemic. Since the law was enacted, the courts have grappled with numerous legal issues that its enactment raised.

The law bars enforcement of a guaranty for a commercial lease, if the guarantor is a natural person, not the tenant, and the tenant was: 1) required to stop serving food or beverages to be consumed on premises, or to cease operations under former Gov. Andrew Cuomo's Executive Order 202.3; 2) a nonessential retail establishment that was subject to in-person limits under Executive Order 202.6; or 3) required to close to the public under Executive Order 202.7.¹

Under Guaranty Law...