City Measure to Bar Landlords from Targeting Retailers’ Assets Could Face Legal Challenge
In May 2020, the New York City Council passed a number of bills aimed to support small businesses and restaurants during and recovering from the COVID-19 pandemic. The Real Deal discussed the possible legal challenges associated with this legislation namely how, under the bill, trying to enforce personal liability provisions is considered a form of harassment.
The article states that, "Real estate attorneys have also pointed to the fact that personal liability provisions are typically included as a separate guaranty signed by the tenant — not as something embedded in a lease agreement. For this reason, the measure’s phrasing could open the door for legal challenges."
Herrick partner, Patrick O’Sullivan, is quoted saying, "the Council possibly intended "rental agreements" to serve as a catchall for separate guaranties — though intention doesn’t preclude litigation." He continued with, "Is that an ‘other rental agreement’? I think that’s unclear. Given the testimony, and what the Council is trying to accomplish, they were trying to get to these other documents."