Mayor de Blasio Signs New COVID-19 Protection Laws for Restaurants, Small Businesses, and Tenants

On May 26, 2020, New York City Mayor Bill de Blasio signed into law seven pieces of legislation that protect restaurants, commercial establishments, and tenants during the COVID-19 pandemic. The new legislation supports struggling restaurants and small businesses by protecting commercial tenants from harassment by landlords and personal liability on lease agreements. It also imposes limits on third-party food delivery services and extends the suspension of sidewalk café fee collections. The new legislation contains the following bills:

COVID Relief for Restaurants and Small Businesses:
Currently, third-party food delivery services, such as DoorDash and GrubHub, sometimes charge a restaurant up to thirty percent (30%) of a total order. Intro. No. 1908-B restricts the fees that third-party food delivery services can charge restaurants during a declared emergency and for ninety (90) days thereafter. Starting on June 2, 2020, third-party food delivery services will be prohibited from charging restaurants a fee greater than fifteen percent (15%) per order for delivery and five percent (5%) per order for any other charge. Violators are subject to civil penalties of up to one thousand dollars ($1000) per restaurant per day.

Additionally, Intro. No. 1898-A prohibits third-party delivery services from charging restaurants a fee for telephone orders that do not result in an actual sale. The bill imposes penalties of up to five hundred dollars ($500) per violation, and New York City can bring litigation seeking these penalties as well as restitution of illegally charged fees. Like Intro No. 1908-B, this bill will take effect on June 2, 2020 and will last ninety (90) days after the end of a declared emergency.

Intro. No. 1916-A suspends the collection of indoor sidewalk café fees from restaurants from March 1, 2020 to February 28, 2021 and for outdoor sidewalk cafes through the duration of the emergency. (Note: this bill extends Executive Order No. 105 published on April 4, 2020).

Commercial Tenant Protection:
Mayor de Blasio passed the following bills to increase protection for commercial tenants affected by the pandemic. Intro. No. 1914-A makes threatening a commercial tenant based on their status as a COVID-19 impacted business or person a form of harassment punishable by a civil penalty of ten thousand to fifty thousand dollars ($10,000-$50,000). This includes businesses that were subject to capacity restrictions, were forced to close, or have businesses owners who contracted coronavirus. The bill does not impact a tenant’s obligation to pay rent or a landlord’s ability to enforce the terms of the lease, including lawful termination.

Personal liability provisions, common in small business leases, allow a landlord to hold a business owner personally liable if they are unable to pay rent. Intro. No. 1932-A temporarily prohibits the enforcement of personal liability provisions in commercial leases or rental agreements involving COVID-19 impacted tenants. Effective immediately, threatening to or attempting to enforce such a provision will be considered a form of harassment.

Intro. No. 1936-A expands the definition of harassment to include threats against tenants based on status as an essential employee or being impacted by COVID-19. Violations of this legislation are punishable by a civil penalty of two thousand to ten thousand dollars ($2,000-$10,000).

Consumer Affairs:
Finally, Intro. No. 1940-A codifies Executive Order No. 107, which suspends renewal requirements for licenses and permits from New York City agencies during the duration of the emergency and extends sus suspension for an extra forty-five (45) days. This bill will provide both City agencies and applicants enough time to complete and process renewals after the end of the emergency and when businesses come back online again. The legislation is effective immediately and requires the City to publish a list of any licenses, permits, consents, or registrations that the Executive Order does not cover.

While many of these protections are temporary, they provide additional support for New Yorkers during a time of unprecedented financial insecurity. As new measures continue to unfold, our office will update the foregoing list of new legal protections for small businesses and tenants in New York City. As always, we advise you to speak to an attorney if you have questions about how this new legislation as well as any COVID-19 related development impacts your business.