With the passage of commercial and residential eviction moratoriums in New York over the past year, many questions have arisen. One of the most difficult questions to answer has concerned the hardship declaration: “What is a hardship”? Because landlord’s have only been able to challenge a hardship claim since September 2, 2021, we don’t have much precedent to base our discussion. Nevertheless, we do have a few court decisions establishing a baseline. Before we look at how and what the courts are interpreting are hardship, let’s review the statutory language.
Residential Tenant Hardship
The residential tenant hardship declaration requires the tenant to swear under penalty of perjury:
A. I am experiencing financial hardship, and I am unable to pay my rent or other financial obligations under the lease in full or obtain alternative suitable permanent housing because of one or more of the following:
- Significant loss of household income during the COVID-19 pandemic.
- Increase in necessary out-of-pocket expenses related to performing essential work or related to health impacts during the COVID-19 pandemic.
- Childcare responsibilities or responsibilities to care for an elderly, disabled, or sick family member during the COVID-19 pandemic have negatively affected my ability or the ability of someone in my household to obtain meaningful employment or earn income or increased my necessary out-of-pocket expenses.
- Moving expenses and difficulty I have securing alternative housing make it a hardship for me to relocate to another residence during the COVID-19 pandemic.
- Other circumstances related to the COVID-19 pandemic have negatively affected my ability to obtain meaningful employment or earn income or have significantly reduced my household income or significantly increased my expenses. To the extent that I have lost household income or had increased expenses, any public assistance, including unemployment insurance, pandemic unemployment assistance, disability insurance, or paid family leave, that I have received since the start of the COVID-19 pandemic does not fully make up for my loss of household income or increased expenses.
B. Vacating the premises and moving into new permanent housing would pose a significant health risk because I or one or more members of my household have an increased risk for severe illness or death from COVID-19 due to being over the age of sixty-five, having a disability or having an underlying medical condition, which may include but is not limited to being immunocompromised.
Commercial Tenant Hardship
The commercial tenant hardship declaration requires the tenant to swear under penalty of perjury:
My business is experiencing financial hardship, and is unable to pay the rent in full or other financial obligations under the lease in full or obtain an alternative suitable commercial property because of one or more of the following:
- Significant loss of revenue during the COVID-19 pandemic.
- Significant increase in necessary expenses related to providing personal protective equipment to employees or purchasing and installing other protective equipment to prevent the transmission of COVID-19 with- in the business.
- Moving expenses and difficulty in securing an alternative commercial property make it a hardship for the business to relocate to another location during the COVID-19 pandemic. To the extent the business has lost revenue or had increased expenses, any public assistance the business has received since the start of the COVID-19 pandemic must not fully make up for the business’s loss of revenue or increased expenses, and the business still meets the aforementioned eligibility criteria to qualify for a financial hardship.
What is the Court’s Interpretation of the Hardship Language?
Determining whether a tenant is experiencing a hardship is a difficult task for the court. The legislature’s drafting of the moratorium protection was vague and ambiguous. This was likely on purpose to give judges discretion on whether a tenant qualifies as facing hardship. Below we address several recent court decisions concerning hardships.
In Sanchez-Tiben v Washington, LT Index No. 000223/2020 (2021 Bronx Housing Court), the court scheduled a hardship challenge hearing. The landlord based their hardship challenge on the fact that the tenant maintained the same work schedule as he had prior to the pandemic and that the tenant did not appear to have suffered a pandemic-related financial hardship. The landlord based is observations on his review the security cameras in the building.
In Bitzarkis v Evans, Index No. 81766/2019 (2021 Kings Housing Court), the court scheduled a hardship challenge hearing. The landlord contested the tenant’s hardship, claiming that the tenant’s could not have been affected because the tenant, since before and during the pandemic, paid rent through New York City Human Resources Administration. In other words, the tenant’s ability to pay rent was never impacted. The court also addressed the tenant’s medical hardship claim, stating that landlord’s observations that the tenant was coming and going from the premises, the tenant was entertaining guests, and that the landlord smelled marijuana and heard loud music when the tenant entertained guests, were sufficient to have a hearing on the hardship claim.
In Harbor Tech LLC, Petitioner, v. Alfredo Correa, Index No. 60790/2019 (2021 Kings Housing Court), the tenant filed a hardship declaration claiming financial hardship. The landlord filed a motion challenging the tenant’s financial hardship based on social media posts which were inconsistent with a tenant facing financial hardship. The Court held that a hearing was warranted: “The social media posts that Petitioner shows are exactly the kind of discreet, specific, non-conclusory facts — and therefore made in good faith — upon which to form a ‘belief’ that [tenant] Soto has not suffered a pandemic-related hardship.” In addition, the court found the initial burden at the hearing will be on the tenant to establish their hardship.
In Russo v. Kiefer, Index No. 210502/2017 (2021 Newburgh Justice Court), after a hardship hearing, the court held that the tenants were not facing a financial hardship and scheduled the case for trial. The court found that one tenant received a $389,000 medical malpractice settlement and the other three may have lost income but did not provide supporting documentation. In the end, the court held that even if the other three tenants did face a substantial hardship, because the tenants were jointly and severally liable for the rent, there was no hardship for the purposes of the moratorium. “Even if it was established that respondents, WOLF, may have suffered loss in income as an indirect result of COVID, it is undisputed that respondent, MELANIE A. KIEFER, received $389,000 as settlement of a lawsuit and has the financial ability to pay the rent due and/or the cost of moving. She also has the joint and severable obligation, as a joint tenant, to pay the entire rent due. Accordingly, no financial hardship has been shown by respondents’ household as a result of COVID.” Essentially, the court imputed the income of one tenant to the other three.
In Col, LLC. v. Shankar, 581153/2019 (2021 New York Housing Court), the landlord obtained a money judgment against a tenant pursuant to stipulation. After the tenant failed to make the required payments, the landlord executed on its money judgment and the marshall removed possession from the property to sell at auction. The court held that removing property from the premises is a clear end run around the stay afforded by the moratorium. In addition, the court set the matter down for a hearing on whether the landlord and landlord’s attorney should be held liable for sanctions for their action. The case appears to be a case of first impression with the court expanding the protections of the moratorium.