Senate Bill S8390

                                 
BILL NUMBER: S8390

SPONSOR: KAVANAGH
 
TITLE OF BILL:

An act to amend subpart A of part BB of chapter 56 of the laws of 2021
relating to establishing a COVID-19 emergency rental assistance program
and amending the state finance law relating to establishing a COVID-19
emergency rental municipal corporation allocation fund, in relation to
extending the effectiveness of certain provisions thereof

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill would extend a provision of the COVID-19 Emergency Rental
Assistance Program (ERAP) that prohibits landlords from initiating a
monetary action or proceeding for the collection of rent covered by an
ERAP payment that a landlord refused to accept.

 
SUMMARY OF PROVISIONS:

Section one of the bill would extend section two and section nine of the
COVID-19 Emergency Rental Assistance Program (ERAP) in order to extend a
              

provision that prohibits landlords from initiating a monetary action or
proceeding for the collection of rent covered by an ERAP payment that a
landlord refused to accept.

Section two of the bill relates to the effective date.

 
JUSTIFICATION:

The SFY 2021-22 budget enacted a rent relief program (the COVID-19 Emer-
gency Rental Assistance Program (ERAP)) using federal funds to assist
renters with incomes below 80% of the Area Median Income (AMI) by paying
up to 12 months of rent and utility arrears and three months of prospec-
tive rent. Additional federal and state funding was added to the program
in SFY 2022-23 and SFY 2023-24. Applications for ERAP closed on January
20, 2023. Under the terms of the program, a tenant who applied for ERAP
was protected from eviction until a determination of eligibility had
been made. If the tenant was approved for ERAP, a payment was made
directly to the landlord for the covered arrears. By accepting the ERAP
payment, landlords agreed not to pursue non-payment eviction for months
covered by the program, not to evict for an expired lease or holdover
tenancy for one year, waive late fees for arrears paid for by the
program, and not to raise rent for a year from the amount at the time an
application was filed. Landlords could still pursue eviction for nonpay-
ment of rent for months not covered by the program.

Tenants received proof that a payment was made on their behalf, or if
their landlord was unresponsive, that a reserve payment was held for at
least 180 days. Proof of reserved payment could be used to protect them-
selves against non-payment eviction for arrears that would be covered by
the program for up to one year after the determination was made. If the
landlord had not accepted the payment within a year, they were deemed to
have waived the rent that would have been covered by that payment and
were prevented from initiating a monetary action or proceeding or
collecting a judgement for the amount of the rent covered by the
payment. The statute for ERAP is set to expire and be repealed on
September 30, 2025. However, the statute of limitations for a landlord
to initiate a monetary action or proceeding or collect a judgement for
the amount of rent covered by an ERAP payment will not have expired by
that time. Allowing a potential loophole where landlords who refused
ERAP payments could potentially sue tenants for the same arrears that
would have been covered by the program. This bill would extend the limit
on initiating a monetary action or collecting a judgment - only when the
landlord did not accept an ERAP payment and only for t he amount of rent
covered by that payment.

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
This act shall take effect immediately.