NewsCoronavirus

Actions

Owners not personally liable for rent debt if business was affected by COVID-19, new city rule says

Shoppers support local stores for Small Business Saturday
Posted at 4:20 PM, May 13, 2020
and last updated 2020-05-13 16:25:15-04

NEW YORK CITY — In its Wednesday meeting, New York City Council passed legislation meant to protect small businesses impacted by COVID-19, including a new measure to protect the assets of business owners.

That bill, which passed 44 to 6, suspends personal liability provisions for applicable businesses, provisions that allow a commercial landlord to hold a business owner personally liable if they're unable to pay rent.

Those types of personal liability provisions are common on small business leases, where in order to avoid seizure of their own personal assets or property, they must give up the property leased by the business, effectively ending the least, the council said.

The bill suspends those rules for businesses impacted by mandatory closures or service limitations, including restaurants and bars, gyms and fitness centers, movie theaters, retailers, barbershops, hair salons, tattoo and piercing parlors and other personal care services.

"With the federal government continuing to stall further relief for small businesses, it's imperative the City Council acts through all measures possible to assist the long-time businesses that are an important part of the fabric of our neighborhoods," said Councilwoman Carlina Rivera, who sponsored the bill with Speaker Corey Johnson.

Read more: NYC caps fees for third-party delivery platforms