From New York to Los Angeles, tenant groups have encouraged millions of renters to withhold May rent, which landlords warn would be devastating. One such tenant organization is Housing Justice for All, a coalition of over 70 tenant organizations across New York state. Governor Cuomo has used his emergency powers to declare a stay on evictions for three months, but they believe he must go further. Activists are urging tenants to withhold rent, whether they are able to pay or not, to draw attention to the plight of those unable to pay. The protest is expected to represent the largest coordinated rent strike in the country.
As the statewide stay-at-home order from New York Governor Cuomo has ground the economy to a halt, New York tenants are fighting for three months of rent cancellation for all tenants. Even hourly workers who have held retained their jobs may not have enough income during that period. All non essential workers have been ordered home and millions have lost their jobs or income. 39% of New Yorkers do not have enough saved for one month’s rent if they lose their jobs. Because of COVID-19, most tenants are unable to pay the rent.
Are Rent Strikes Legal?
New York Courts have repeatedly held that collective rent strikes are proper in light of the warranty of habitability and the statutory and constitutional protections of freedom of speech and association. Sections 755 of the NY Real Property Actions and Proceedings Law (“RPAPL”) and sections 230 and 223 of the RPAPL support the right to organize, withhold rent for lack of repairs and prohibit landlords from retaliation for organizing.
Landlords cannot interfere with the right of tenants to form, join or participate in the lawful activities of any group, committee or other organization formed to protect the rights of tenants; nor can landlords harass, punish, penalize, diminish, or withhold any right, benefit or privilege of a tenant under his or her tenancy for exercising such right.
What is a NY Rent Strike?
In a typical rent strike, tenants collectively withhold their rent money from the landlord as a means of using their economic power as leverage to force the landlord to meet their demands, such as repairs or some concession in services or lease terms. Tenants often pay rent into a common escrow account, setting it aside with the intention of paying some or all of it eventually, as leverage to force the landlord to meet their demands.
For example, after withholding rents for one year, senior mobile home tenants in Akron, New York reached a settlement with their landlord. Fifty tenants of the Quarry Hill Mobile Home Park began withholding their rents and water charges through their attorney, Robert Friedman in December, 2011. They alleged unsafe and unsanitary conditions in the park consisting of 120 homes. The owner, Lakeshore NY, LLC of Illinois, began eviction proceedings in Newstead Town Court for nonpayment of rent and water charges in September of 2012. The eviction action was vigorously defended by Mr. Friedman. The settlement agreement, filed with the court, discontinued the evictions and the tenants’ claims for breach of the warranty of habitability. The owner was required to make repairs to the septic system and driveways and provide adequate lighting for the roadways and common areas. Also under the guidance of Robert Friedman, 61 of the 120 Akron Mobile Home Park tenants staged a seven month long rent strike. New York Supreme Court Justice Henry Nowak dismissed the eviction cases against the striking tenants based on improper service of the thirty-day rent demand notices by the landlord.
The pressures, risks, and goals of a COVID-19 rent strike are much different from a typical rent strike. Because of the eviction moratoriums, tenants who are unable to pay the rent have some breathing room, knowing that they will have a roof over their head for at least a few months. Faced with other necessities, like food and medical care, the moratorium has bought tenants time to worry about housing costs later.
Why Have NY Landlords Been Losing Power?
New York landlords have historically been losing economic and legal power, especially over the past year due to:
- The Warranty of Habitability imposes an unqualified obligation on landlords to maintain residential rentals so that conditions are not detrimental to the tenant’s life, health or safety.
- Courts’ favoritism of tenants.
- Discrimination laws limit the landlord’s ability to screen tenants.
- The NY Tenant Protection Act of 2019 Imposed limits on security deposits, late fees, screening of tenants based on bad tenancy history, lease language and evictions.
- Stay of evictions by New York Executive Order and the CARES Act in response to the COVID-19 pandemic.
- Late or no rent payments due to the Covid-19 pandemic.
- The recent doubling of Buffalo City property taxes.
- The decrease in market value of rental properties caused by 5 through 7 above.
What Is The NY Warranty of Habitability?
New York residential (including cooperative) tenants are protected by the warranty of habitability (WOH) under New York Real Property Law §235-b. It is implied in every New York residential lease that the premises are habitable and fit for the uses reasonably intended by the parties and that there are no conditions that are detrimental to the tenants’ life, health or safety. The WOH creates an unqualified obligation which is not excused by the acts of third parties or natural disaster. The landlord’s good faith may be raised as a defense only if the landlord is prevented from making repairs due to strike or labor dispute. For example, many of the conditions that usually result from a severe storm, including the loss of electricity, heat and hot water; the reduction of elevator service and other essential services; non-functioning appliances; leaks and flooding; and odors, mildew and mold, have been held to constitute a breach of the WOH.
Courts have placed the burden of repairs on landlords even when they are required by events that are wholly out of their control. The expansive view of the WOH taken by the New York courts would include even the extraordinary damages caused by Hurricane Sandy. Landlords have been held responsible for air pollution and other conditions resulting from clean-up of the destruction of the World Trade Center after 9/11/01; an apartment flooded due to a defective roof during a large rainstorm and a below grade apartment flooded after the New York City storm sewers were overwhelmed by extremely heavy rainfall.
These are the limitations on the enforcement of the WOH that protect landlords: (a) the landlord must have had either actual or constructive notice of any conditions requiring repair; (b) the tenant must provide the landlord with reasonable access to make repairs; (c) the tenant may undertake any necessary repairs and set-off their cost against the rent only if the landlord has first been notified of the conditions in need of repair and fails to take action in due course to provide a remedy; and (d) breach of the WOH does not give tenants the right to unilaterally cancel the lease.
The WOH permits tenants to withhold rent and use the breach as a defense in a nonpayment eviction proceeding or to raise the breach as a counterclaim or in lawsuit against the landlord. In determining the appropriate abatement or rent reduction to which a tenant is entitled, courts balance the nature, severity and duration of the breach against the landlord’s diligence in making repairs. The abatement can range from a rent reduction of a few percent to the full amount of the rent. Where habitability issues affect an entire building, such as in a storm, a group of tenants can organize a rent strike to collectively withhold rent until necessary repairs are made by the landlord.
What Relief Are Landlords Asking from Congress?
Landlords, claiming that there is a cascade of effects across the country when rents are not paid, including unpaid mortgages, unpaid utility bills, And lower property taxes, are asking Congress to:
- Create an emergency rental assistance program for those who are impacted by the COVID-19 crisis and struggle to cover housing expenses.
- Better tailor the CARES Act eviction moratorium provision and safeguard owners’ ability to effectively manage their communities.
- Expand the Small Business Administration’s Paycheck Protection Program to include all multifamily businesses.
- Allow more housing providers access to mortgage forbearance and ensure fairness and flexibility in its terms.
- Provide financial assistance for property-level financial obligations, such as property taxes and insurance payments and extend credit to multifamily mortgage servicers.