May 2021 Legislative Update

Posted By: Mark Glaser NYHA News ,

LEGISLATIVE UPDATE - MAY 2021

During the past month, 3 pieces of legislation of importance to manufactured home community owners were enacted into law.  The legislation includes (i) a new rent relief program enacted as part of the 2021-2022 budget that will provide for payments to landlords who are owed rent as far back as March, 13, 2020; (ii) legislation extending the eviction moratorium until August 31, 2021; and, (iii) elimination of the STAR exemption for manufactured home homeowners, instead setting up a process for affected homeowners to be transferred to the STAR credit program.  Each of these are discussed below.

 

  1. Rent Relief

 

The rent relief legislation is designed to speed up the delivery of funds to landlords to avoid eviction of tenants impacted by the Covid crisis.  The legislation includes the creation of a priority period applicable to owners and operators of manufactured home communities (among certain other groups), that will expedite the processing and payment of approximately $2.3 Billion dollars in rent relief funds that was appropriated to pay back rent.  Importantly, to take advantage of the priority provisions of the new law, manufactured home community owners and operators must submit requests for payment within 30 days of the opening of the program.   Please note that there is a possibility that the funds appropriated in the bill may not be sufficient to cover all rent arrears, therefore, community owners must act quickly to take advantage of the priority assigned to manufactured housing.  We will keep you informed of new developments as the program is operationalized.

How the Program will work:

 

  1. In order to expedite the payment of funds, the legislation designated the Commissioner of the Office of Temporary and Disability Assistance (OTDA) to administer the program.
  2. Since the passage of this legislation, OTDA, working with other state agencies has been developing the program, which is expected to be launched later in May.
  3. The legislation provides that OTDA may also opt to work with local municipalities to distribute funds.
  4. The legislation requires that of the funds that are allocated in the first 30 days (the priority period), 35% must go to recipients outside the City of New York. After this 30-day period, applications will be processed on a rolling basis (g., as they are received) regardless of priority. 
  5. The legislation specifically provides that households, “including both tenants and occupants of dwelling units and manufactured home tenants” are eligible. [Note that manufactured home tenant is defined to include both renters and owners of manufactured homes in communities.]
  6. Prioritization: the legislation provides for prioritization of the processing of applications and distribution of funds to certain categories of recipients including:
    1. households whose income does not exceed 50% of the area median income;
    2. households who are tenants of mobile homes or mobile parks whose arrears have accrued for the land on which the mobile home is located;
    3. certain vulnerable populations, including veterans;
    4. households in areas that have been particularly hard hit by Covid;
    5. households who reside in developments of 20 or fewer units owned by a small landlord (limited to landlords who own 20 or fewer units);

 

  1. The legislation further provides that there be an additional prioritization as follows:
    1. First Priority: Households with income that does not exceed 50% of area median income and have a member in one of the priority groups above – Including manufactured home communities;
    2. Second Priority: Households with income that does not exceed 50% of area median income that do not have a member in one of the priority groups;
    3. Third Priority: Households with income that does not exceed 80% of area median income and have a member in one of the priority groups above– Including manufactured home communities; and,
    4. Last Priority: Households with income that does not exceed 80% of area median income that do not have a member in one of the priority groups.

Because of the prioritization schedule, it is essential that manufactured home community owners work with their residents who are behind in rent to make sure that applications are submitted as soon as possible after they become available.  Landlords will be able to apply on behalf of their tenants.

The Application Process:

  1. Local municipalities are required to designate staff or local not-for-profit entities to assist with the application process;
  2. “Any party, or their designee, that may be eligible to receive funds [e.g., landlords] may initiate an application.”
  3. OTDA is required to develop and make available a “means by which an application submitted by a tenant, a landlord, or both jointly, can be tracked by the tenant or the landlord, regardless of who submitted such application.”

 Amount of Payment:

  1. Payments can be for as much as 12 months arrears in rent and, in certain cases, may include up to 2 or 3 months of prospective rent payments.
  2. Late fees may not be included in the amount of arrears sought to be reimbursed under this program.

Use of funds – Funds received under this program may be used only to satisfy the tenant's full rental obligations to the landlord or owner for the time period covered by the payment;

obligations of Landlords: Provide OTDA with the information and documentation required for payment;

Note:  Failure of a landlord (a) to provide information required for the Tenant to seek payment of back rent to the landlord, or (b) to agree to participate in the program, will result in the Landlord losing the right to evict the tenant for failure to pay rent [the law provides that the failure of the landlord to participate or to cooperate may be asserted as an affirmative defense in an eviction proceeding],  as well as losing the right to seek a monetary judgment against the tenant for the amount of the unpaid rent.

  1. Keep confidential any information or documentation from or about the tenant or occupant acquired pursuant to this application process, and only use the information for purposes of obtaining payments under this program.
  2. If a landlord accepts funds under this program, the landlord must agree:
    1. that the amount of funds provided under the program satisfies the outstanding rent obligation;
    2. to waive any late fees;
    3. not to evict the tenant for the time period covered by the payments; and,
    4. not to increase the rent for one year after the first payment of rental arrears funds is received; Note that this only affects the tenants on whose behalf rental payments are accepted.
  3. There are a number of other details in the bill which have been omitted in the interests of keeping this relatively short. Among those provisions is a program for residents to obtain funding to pay utility bills that were not paid during the pandemic. 

 

Extension of the Eviction/Foreclosure Moratorium

Chapter 104 of the Laws of 2021 extends the eviction moratorium to August 31, 2021.  As a reminder, the eviction moratorium prohibits a tenant from being evicted because of unpaid rent if the tenant claims a Covid-related hardship.  Similarly, small landlords (owning 10 units or less, at least one unit of which is the primary residence of the landlord), are protected against foreclosure.   The eviction moratorium simply required persons and entities seeking protections under the Act to file a hardship declaration (under penalty of perjury) asserting that the tenant was adversely affected by the Covid crisis.  In addition, the Act also extended, until August 31, 2021, the “Protect Our Small Businesses Act” which provides similar eviction/foreclosure protections to tenants and owners of small commercial business properties (10 or fewer units). 

STAR Exemption program eliminated

The 2021-2022 budget also included a provision that repeals the STAR exemption program.  Residents of manufactured home communities who received the STAR real property tax exemption this year will be “automatically” transitioned to the STAR real property tax credit program for the 2022-2023 tax year.  For those residents who cannot be automatically transitioned, the Department of Tax and Finance will work with the residents and community owners to accomplish the transition.  As you know, this program reduced community real property tax bills by an amount equal to the STAR exemption attributable to eligible homes, and community owners were then obligated to reduce the rent of the eligible homeowners by the amount of the exemption.  As a result of this legislation, community owners will no longer have to refund the amount of the exemption to their residents.  Conversely, community owners will no longer receive the reduction in their real property tax bills in the amount of the STAR exemption.