By Emma Whitford

Law360 (April 6, 2021, 2:23 PM EDT) -- The New York State Senate and Assembly have reached an agreement on a program to distribute more than $2 billion in federal rent assistance across the state, according to bill language posted on the state's website Tuesday morning.

Part of a larger budget bill, the Covid-19 Emergency Rental Assistance Program of 2021 tracks closely with an impending deal Law360 reported Monday. It includes one year of protections against rent hikes and certain evictions as a condition for landlords taking the money.

It was not immediately clear Tuesday when legislators would vote on the bill. "Between noon and tomorrow night," State Assemblymember Harvey Epstein, a Democrat representing Manhattan, told Law360. "We have a lot of bills to go through, and this is just one of them. I expect this to be the last budget we debate because it's the heaviest bill. It's got the most stuff in it."

"The [legislative] leaders believe they have the votes to pass it," he added.

Representatives for Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins, both Democrats, did not immediately comment on the program to Law360. Sen. Brian Kavanagh, a Democrat who heads the Senate Housing Committee, could not immediately be reached for comment.

Certain qualifications for the program were determined at the federal level, prior to New York's negotiations during budget season. Tenants must make no more than 80% of the area median income to qualify and must also demonstrate pandemic-related financial hardship and housing instability.

As anticipated, state guidance revealed Tuesday includes clear language that New York households will be eligible "regardless of immigration status."

The bill also states that people will be able to attest to their own financial hardship "to the extent permissible by federal law and relevant guidance." This language was a lobbying priority for both tenant and landlord groups, after applicants to a 2020 pandemic-related rent-relief program reported onerous paperwork requirements.

Program administrators "shall establish procedures to ensure flexibility when determining acceptable documentation," the bill states.

The final budget proposal includes an additional $100 million in state funds for tenants and landlords who do not qualify for the federal money, a spokesperson for the state senate majority confirmed Tuesday. This money will go to tenants who make between 80% and 120% of the area median income, as well as landlords whose tenants moved out in the past year.

A qualifying tenant or landlord will be able to apply to CERAP to cover up to a year of past rent stretching back to March 13, 2020. The program will be administered by New York's Office of Temporary and Disability Assistance, and certain low-income households will be able to apply to cover up to three months of future rent, in addition to their arrears.

A program application will be made available on OTDA's website "as soon as practicable" and in multiple languages, according to the bill. Tenants and landlords will be able to track the application's status.

State courts will also provide information on the program to tenants with pending eviction cases, and communities most hard hit by COVID-19 and with the highest unemployment rates will be prioritized for "extensive" outreach.

Conditions on a landlord's participation include not raising rent for one year, waiving associated late fees, and agreeing to a one-year protection against no-cause evictions. Participating landlords can still pursue eviction for future nonpayment of rent or nuisance behavior.

Eviction cases for nonpayment of rent, lease violations and expired leases will also be stayed while applications for rent relief are being processed, according to the bill.

"The biggest question for me is are landlords going to participate and how can we ensure that they do?" said Cea Weaver, an organizer with the statewide tenant coalition Housing Justice For All, on Tuesday. "To me, the thing to do is extend the eviction moratorium."

Legislation that put a pause on most pending eviction cases in New York is poised to expire on May 1.

Joanna Wong, a Manhattan landlord and head of the group Small Property Owners of New York, told Law360 that she has concerns about potentially uncooperative tenants.

"I'm literally processing this right now, and don't get me wrong, I am so happy that finally we are seeing some sort of progress and getting toward some program where monies are going to go out to tenants and owners," Wong added.

Tensions have been building for months since the federal government announced roughly $25 billion in nationwide rental assistance in December. New York's rental arrears have been estimated to be north of $2 billion. 

A sticking point among New York legislators in designing the new rent-relief program had been how to proceed if a tenant qualifies for the program, but their landlord is not reachable or declines to participate.

OTDA will make "reasonable efforts" to contact a tenant's landlord, according to the bill, including by mail, phone, text or email. If these efforts fail, OTDA will keep the tenant's awarded funds in reserve for at least 180 days.

After that buffer period, OTDA "may reallocate the set aside funds to serve other rental assistance program applicants."

Yet for up to a year following the tenant's provisional award, if the uncooperative landlord tries to evict for nonpayment of that rent, the tenant can use the award as a defense in housing court. And if the landlord doesn't act to accept the money for a full year, that rent is deemed waived.

Weaver, of Housing Justice For All, said she sees traces of the rent cancelation campaign tenants spearheaded in 2020. "The state is recognizing that landlords don't necessarily have the right to collect money," she said. 

"I think there probably will be some disagreement around the margins, but in general this is a program that is flexible and seems to intend to get rent relief out as quickly as possible," added Ellen Davidson, an attorney with the Legal Aid Society of New York. 

But Luise Barrack, head of litigation at Rosenberg & Estis PC, wondered if some landlords might refuse the money because the no-cause eviction protections could pave the way for more sweeping anti-eviction legislation down the road. "That may be not a big deal if it's only going to be for a year, but I think a lot of people are going to feel like it's the first step," she said.

Bill language published Tuesday also includes priority categories for disbursing funds. OTDA will first prioritize households who make no more than 50% of the area median income, and households with one person who has been unemployed for three months prior to applying.

Subsequent priority categories include veterans, victims of domestic abuse and human trafficking, landlords who own 20 or fewer units, mobile home park residents, and tenants with pending eviction cases.

"After the 30 day priority period has ended, all applications shall be processed on a rolling basis," the bill states.

OTDA will post monthly reports on the number of program applicants, the number of people who receive assistance, and the average amount of funding administered, according to the bill. The state agency did not immediately reply to a request for comment Tuesday. 

--Editing by Alyssa Miller.

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