Bill Would Waive Landlords’ Late Property Tax Interest, Fees
A downstate Democrat is proposing legislation that would allow local governments to waive late fees, penalties and interest on property taxes owed by landlords who own five or fewer properties.
Sen. Michelle Hinchey, D-Kingston, has introduced S.7390 in the state Senate. The legislation allows local governments to agree not to assess interest or penalties on real property taxes owned by a small rental business from the beginning of the state’s COVID-19 disaster declaration in 2020 through Aug. 31, 2022.
“The COVID-19 pandemic has put an economic strain on tenants and small landlords alike. Across New York state, many small landlords depend on their rental properties as a main source of income or to help with long-term retirement planning. Throughout the pandemic, we have worked hard to make sure that tenants financially impacted by COVID-l9 could remain safely in their homes. While relief in the form of ERAP funds is now underway, landlords have still had to pay the bills associated with their rental properties, including utilities and property taxes, or face late fees, penalties and interest. With many tenants unable to pay their rent, smaller landlords have fallen behind on these critical bills, putting them in danger of accruing debt and increased costs.”
Getting ERAP money into the hands of renters has been a priority for Gov. Kathy Hochul since she took office in late August, with the amount of money spent in the program increasing exponentially recently. The ERAP program had been struggling to process applications, leading to concerns that the money could be taken back by the federal government because the state wasn’t spending it fast enough.
Among the actions Hochul took was reassigning staff to work with landlords to complete pending applications, which sped up the approval process. After lagging behind other states, New York found itself ranked first by early September in ERAP disbursements.
While getting money out quickly should help landlords, local state representatives were critical of eviction moratorium extensions passed earlier this money in the state Legisalture. The bills require landlords to challenge a hardship declaration submitted by tenants and for banks and mortgage holders to challenge a hardship declaration submitted by property owners trying to avoid foreclosure. Judges would require tenants to apply for assistance programs if their hardship claim is ruled to be valid. The bills also extend the Tenant Safe Harbor Act to Jan. 15, 2022, and added a nuisance standard to eviction protections to provide landlords with a way to start an eviction proceeding against a covered tenant if a tenant is a nuisance or has inflicted substantial damage to a property.
Among the criticisms raised by Assemblyman Andrew Goodell, R-Jamestown, is that landlords participating in the emergency rent assistance programs are automatically at a disadvantage because they forego any increases in rent for at least a year, have to waive late fees and can’t possibly recoup all of their lost rent because the program covers a 12-month period while evictions have been prohibited for 17 months already, with the eviction moratorium now extended beyond that.
“The data proves it. You can look at it,” Goodell said. “Landlords are pulling out of this market. In my district I’ve had landlords tell me they were forced to sell some of their houses in order to pay the expenses on the remaining ones. And they sold to owner-occupied residents. And those units are off the market. Other landlords being unable to cover the maintenance costs because they’re not getting enough cash flow and have allowed their apartments to go to the point they’re no longer tenable by anyone. So we’ve set up a system where landlords, if they can survive, are going to be forced to raise the rent to recoup their losses, and that rent increase is going to hit the people who can afford it the least — the working poor.”