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Can Landlords Charge Late Fees in New York?
By September 29, 2020 Posted in Landlord/Tenant Law Share
A number of executive orders have been passed by New York Governor Andrew Cuomo extending and expanding the temporary suspension of several New York state laws due to the COVID-19 crisis. Many landlords have inquired if they are permitted to charge late fees to tenants who continue to pay their rent late.
Executive Order 202.28, dated May 7, 2020 and effective through June 7, 2020, grants relief to residential tenants from incurring any late fees for failing to pay rent when due. Landlords are not permitted to charge residential tenants any fees or charges for late payment of rent during the period from March 20, 2020 through August 20, 2020.
Following this initial Order, Executive Order 202.38, dated June 6, 2020, which was in effect through July 6, 2020, extended the modifications from 202.28. Executive Order 202.48, dated July 5, 2020, extended the existing orders until August 5, 2020. Executive Order 202.55, dated August 5, 2020, extended the Orders to remain in effect through September 4, 2020. Another order, Executive Order 202.60, dated September 4, 2020, again extended the modifications from Orders 202.28, 202.38, 202.48, and 202.55 until October 4, 2020.
Therefore, the executive orders appear to keep in effect the portion of the prohibition against charging late fees from the initial Executive Order 202.28. However, none of the subsequent executive orders specifically extend the late fee prohibition past August 20, 2020. Our office, however, spoke to a supervisor in the NYS Health Department. Although the latest Executive order (EO 202.60) does not specifically extend the late fee prohibition, we were informed that because subsequent Executive Orders continue the modifications of Executive Order 202.28, and do not specifically change or repeal the prohibition against charging late fees, then this part of the original EO would carry through. Therefore, the subsequent Executive Orders keep in effect the portion of EO 202.28 that prohibits a landlord from charging late fees.
Further, the Tenant Safe Harbor Act, which was signed into law by Governor Cuomo on June 30, 2020, prohibits courts from evicting residential tenants who experienced financial hardship during the pandemic for non-payment of rent that accrues or becomes due between March 7, 2020, and the undetermined date on which all COVID-related restrictions on non-essential gatherings and public and private businesses are lifted in the county of the tenant’s residence. This is defined as the “COVID-19 covered period” under the Act. The Act states that the period is extended by executive orders 202.28 and 202.31 and will be further extended by any future executive orders issued in response to the COVID-19 pandemic.
The extensions of the executive orders and the language of the Tenant Safe Harbor Act suggest that landlords continue to be prohibited from charging late fees to tenants for their failure to timely pay rent.
The information in this Client Alert is provided solely for information purposes. It should not be construed as legal advice on any specific matter and is not intended to create an attorney-client relationship. The information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based upon particular circumstances. Each legal matter is unique, and prior results do not guarantee a similar outcome.
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