Somewhat mirroring CEEFPA, section 4 of the ERAP statute provides, as follows:
… except as provided in section nine-a of this act, eviction proceedings for a holdover or expired lease, or non-payment of rent or utilities that would be eligible for coverage under this program shall not be commenced against a household who has applied for this program or any local program administering federal emergency rental assistance program funds unless or until a determination of ineligibility is made. Except as provided in section nine-a of this act, in any pending eviction proceeding, whether filed prior to, on, or after the effective date of this act, against a household who has applied or subsequently applies for benefits under this program or any local program administering federal emergency rental assistance program funds to cover all or part of the arrears claimed by the petitioner, all proceedings shall be stayed pending a determination of eligibility. Evidence of a payment received pursuant to this act or a local program administering federal emergency rental assistance program funds may be presented in such proceeding and create a presumption that the tenant's or occupant's rent or utility obligation for the time period covered by the payment has been fully satisfied.
The ERAP stay is not without exceptions. Section 9-a thereof provides that restrictions on eviction proceedings do not apply where a tenant has “intentionally caused significant damage to the property or is persistently and unreasonably engaging in such behavior, with a specific description of the behavior alleged.” However, under section 9-a (4), a “mere allegation of the behavior by the petitioner or an agent of the petitioner alleging such behavior shall not be sufficient evidence to establish that the tenant has engaged in such behavior.” In other words, a landlord must prove to the court that a tenant falls into this narrow class of tenants.
ERAP’s benefits are more than a one-time rental assistance payment. Under section 5(d), if a landlord accepts payment for rent or rental arrears, such acceptance constitutes an agreement by the landlord (i) to waive any late fees that may be due; (ii) not to increase the monthly rent due at the time of application for the program for one year from acceptance of the payment; and (iii) not to evict the tenant for reason of expired lease or holdover tenancy for twelve months after the first rental assistance payment is received. Notably, however, if the dwelling unit is located in a building that contains four or fewer units, then the landlord may decline to extend the lease or tenancy if the landlord intends to immediately occupy the unit for the landlord's personal use as a primary residence or the use of an immediate family member as a primary residence.
Further, under section 9(2)(c), a tenant may use a provisional approval of her application for assistance as “an affirmative defense in any proceeding seeking a monetary judgment or eviction brought by a landlord for the non-payment of rent accrued during the same time period covered by the provisional payment.” In other words, if a landlord refuses to participate in the ERAP program, a landlord is effectively barred from seeking rent that the program would have paid.
A budgeting shortfall of approximately $850 million led ERAP assistance funds to run dry in many counties, including in New York City, by fall 2021. As a result, on November 14, 2021, the Office of Temporary and Disability Assistance (OTDA), the primary ERAP administering agency in New York State, stopped accepting applications in counties that expended their funding. In response, tenants in New York City sought a preliminary injunction barring OTDA from refusing to accept new applications. The tenants argued that an anticipated March 2022 reallocation of federal funds for rent relief would result in more funds for the program and thus the portal should remain open. A state Supreme Court judge in Manhattan agreed, noting that $18 billion of Congress’s prior allocation was then unspent. See Hidalgo v New York Office of Temporary and Disability Assistance, [New York County Sup Ct, Kotler, J., index no. 453931/2021]). On January 6, 2022, nine days before the expiration of CEEFPA, OTDA was ordered to re-open the ERAP portal. Thus, despite the possibility of a continued lack of funding, new ERAP applications resumed, and the ERAP statute has continued to block the flow of evictions.
2022: ERAP Arises as Primary Eviction Restriction
In CEEFPA’s stead, ERAP began functioning as a blanket stay on eviction proceedings and thwarted a tsunami of evictions as of January 16, 2022. The broad terms of the ERAP statute have effectively stayed a wide assortment of proceedings, including where rent for before March 7, 2020 is due, see e.g., 255 Skyline Drive Ventures LLC v Ryant, Richmond Co. Civ. Ct. L&T 50014-20; more than 15 months of rent is due, see e.g., Mason v Doe, 75 Misc 3d 1210(A) [Civ Ct 2022]; the proceeding relates to non-tenant holdovers, see e.g. 560 Hudson LLC v. Hillman, 2022 NY Slip Op 30718(U) NY Co. Civ. Ct.; 204 W. 55 Street LLC v. Mackler, 2021 NY Slip Op 32901(U) NY Co. Civ. Ct.; Gibbons Realty Corp v. Latney, NY Co. Civ. Ct. L&T 52132/20; Carbrook Assoc. v. Farhang, Kings Co. Civ. Ct. L&T 71923/19; and the landlord intends not to accept payment from the program. See e.g., 1113 Walton Co v. Cruz, 74 Misc. 3d 1222(A), 162 N.Y.S.3d 924 Bx Co. Civ. Ct.; Carousel Props v. Valle, 2022 NY Slip Op 50168(U). Furthermore, and distinct from other rental assistance applications, the ERAP application process is simple; tenants can self-attest to some eligibility requirements and can complete the application online in one day. For all intents and purposes, ERAP has thread itself into the patchwork of rules quilting a de facto moratorium on evictions in New York State.
Armed with the ERAP statute’s clear and sweeping text, judicial memoranda and administrative orders by the Chief Administrative Judge of the Courts of New York State clarifying same, eviction defense practitioners secured ERAP stays with ease in 2021. But, as 2022 plows on and more leading health officials describe an endemic phase of the COVID-19 public health crisis, the climate in housing court has changed and more judges appear willing to hear arguments challenging the ERAP stay. And, while many courts across the state continue to grant automatic administrative adjournments where an application is pending, on April 28, 2022, OTDA announced that funding is only available for applications submitted through March 31, 2022.
Foundational ERAP Stay Cases
Three 2021 cases issued prior to expiration of the CEEFPA successor statute set the stage for the recent cases poking holes in the ERAP stay: Abuelafiya v. Orena, Harbor Teach LLC v. Corrrea, and Sea Park East L.P. v. Foster.
In Abuelafiya, a post-judgment nonpayment eviction proceeding, a district court in Nassau County found that the automatic stay provisions of ERAP failed to address the due process concerns raised by the U.S. Supreme Court in Chrysafis, and further held that the ERAP statute inherently confers upon the Court the jurisdiction to determine eligibility for ERAP benefits. See 73 Misc 3d 576, 579-80 (NY Dist Ct 2021). The Court determined that the tenants were ineligible for ERAP funding because they were not experiencing housing instability; they owned a second house they could relocate to. Accordingly, the ERAP stay was vitiated.
In Harbor Tech, a summary non-payment proceeding before the Civil Court of Kings County, the court addressed due process concerns raised by what it labeled the “automatic stay” provisions of ERAP. See 73 Misc.3d 1211(A), *2–3 (Civ Ct, Kings Co 2021). The court rejected petitioner’s reliance on Abuelafiya as inapplicable to the facts of the case; an ERAP applicant who owns another home that the applicant could move to is diametrically different than a case where an ERAP applicant is facing housing insecurity. Id. The court then reasoned that the stay resulting from the ERAP program is distinct from the hardship declaration in CEEFPA, noting that the latter was a unilateral invocation of a stay by a tenant while the former provides benefits to landlords—accrued rent arrears—as well as to tenants because both “[l]andlords as well as tenants can file an ERAP application.” Moreover, if a landlord receives a payment of rent arrears through ERAP, the payment naturally and foreseeably resolves the nonpayment litigation.” Accordingly, “[s]taying or otherwise restricting litigation to resolve a dispute by alternative means does not deny due process.”
In Sea Park East L.P., a summary non-payment proceeding commenced pre-COVID-19, the parties entered into a final judgment of possession and money judgment, with a warrant of eviction to be issued forthwith and a stay of execution through March 10, 2020. The warrant of eviction was issued on March 9, 2020, but was not executed due to the COVID-19 pandemic. In November 2020, the petitioner sought to execute on the warrant pursuant to the Court’s Directives and Procedures 213 also known as DRP-213, but respondent filed a hardship declaration, and then obtained funding under ERAP for $18,636 in arrears for April 2020 through March 2021. The respondent then appealed the ERAP determination claiming that it was short 3 months, April, May, and June 2021. Pending determination of the appeal, the respondent filed a second ERAP application for the months of April 2021 through June 2021. The Civil Court of New York County held that relying solely on the text of the ERAP statue, the stay applied and the petitioner could not proceed with eviction.
New Cases Lifting ERAP Stay
The latest wave of decisions successfully challenging the ERAP stay can be camped into two groups: courts deciding to lift the stay in holdover proceedings, see generally 2986 Briggs LLC v. Evans, 74 Misc 3d 1224(A) (Civ Ct, Bronx Co 2022); Kelly v. Doe No.1, 75 Misc 3d 197 (Civ Ct, Kings Co 2022); Silverstein v. Huebner, 2022 WL 1243191 (Civ Ct, Kings Co, Mar. 29, 2022); Kristiansen v. Serating, 75 Misc 3d 331 (Dist Ct, Suffolk Co 2022); Actie v Gregory, 74 Misc.3d 1213(A) (Civ Ct, Kings Co 2022); and a court granting a request for a hearing to determine whether the stay should be lifted in a nonpayment proceeding. See generally Harmony Mills W., LLC v. Constantine, No. LT-124-22/CO, 2022 WL 1209695 (City Ct., Cohoes Apr. 25, 2022). The decisions explore questions of legislative intent, constitutionality, and a practical consideration of the equities.
Each court in the first camp elected to exercise its authority in lifting the ERAP stay and one Court in Bronx County specifically articulated that its prime question was whether it had the authority to do so. 2986 Briggs LLC was a licensee holdover eviction proceeding concerning a rent stabilized apartment where the parties lacked a written or oral rental agreement. The text of ERAP provides that a household shall be eligible for benefits if the household is obligated to pay “rent.” RPAPL §702 defines “rent” with reference to an “oral or written agreement.” The court engaged in an exercise of statutory interpretation through which it determined that it maintains authority to lift the stay because the case “is not a nonpayment proceeding where a landlord's receipt of a rent arrears payment upon approval of a tenant's ERAP application, ‘could naturally and foreseeably resolve the nonpayment litigation.’” 74 Misc. 3d 1224(A) *5 (Civ Ct, Bronx Co 2022), citing Abuelafiya, 73 Misc 3d at 579-80. Under the circumstances, where an occupant lacked a written rental agreement, the court reasoned that permitting OTDA to determine the applicability of the stay would “raise doubts as to the statute’s constitutionality, an outcome to be avoided where possible.” Id. at *4, citing In re Lorie C, 49 NY2d 161 (Ct App 1980).
In Kelly v. Doe No.1, the Civil Court of Kings County lifted the ERAP stay in a licensee holdover proceeding where respondents were allegedly squatters, having returned to the subject premises after a lawful eviction in December 2019. See 75 Misc3d 197 (Civ Ct, Kings Co 2022). Applying the United States Supreme Court’s reasoning in Chrysafis, the court compared the power given to the respondent in filing an ERAP application as a fact finder in terms of his own eligibility for the program, to the first CEEFPA statute’s hardship declaration, and found that ERAP implicates due process concerns for landlords when the stay is deemed automatic. Invoking the contextual canon of statutory interpretation known as the “absurdity doctrine,” the court observed that while the text of the ERAP statute plainly called for a stay, failing to lift the stay where the respondents were neither tenants, nor lawful occupants, and have no written or oral agreement to pay rent would lead to an absurd result.
In Actie v. Gregory, the Civil Court of Kings County again applied constitutional considerations and balanced the equities to lift the automatic stay sought by an undertenant in a holdover proceeding where the prime tenant, who had since vacated the subject premises, filed the ERAP application. See 74 Misc.3d 1213(A) (Civ Ct, Kings Co 2022). The court held that the stay must be lifted because it would be counterintuitive and prejudicial to preclude the petitioner from challenging an ERAP stay where approval of the application would not result in the preservation or creation of a tenancy.
Rather than delving into questions of legislative intent and constitutionality as in the foregoing cases, in Silverstein v. Huebner, the Civil Court of Kings County framed the dispositive question in a post-judgment holdover proceeding as one of equities shaped by case law. See 2022 WL 1243191 (Civ Ct, Kings Co, Mar. 29 2022). Relying on Actie, Kelly, and Aubuelafiya, the court reasoned that the protections afforded to tenants and legal occupants under ERAP are inapplicable where the person seeking protection under the statute has no right to possession of the subject premises and no obligation to pay rent. In such case, the ERAP stay cannot apply without violating due process. That was exactly the case in Silverstein; the respondent lacked an obligation to pay rent because he lacked a landlord-tenant relationship with the petitioner. As a result, the respondent appeared ineligible for ERAP warranting that the ERAP stay be lifted.
In Zheng v. Guiseppone, the Civil Court of Richmond County took a different analytical approach in rejecting an ERAP stay in a holdover proceeding where no monies were sought. See 74 Misc 3d 1231(A) [Civ Ct 2022]. The respondents there sought to be restored to the subject premises, a non-regulated apartment, five days after execution of a warrant of eviction, arguing that that, since an ERAP application had been filed prior to the eviction, restoration was necessary and appropriate. The court relied on statutory text and legislative intent to decide that ERAP was inapplicable and thus no stay triggered. Although acknowledging the statute’s broad language, clearly staying “any pending eviction proceeding,” the court found that it had inherent power to review the circumstances of each case to assess whether respondents are covered by the statute and entitled to its protections. Pointing to the stated legislative intent to reduce evictions stemming from “non-payment of rent, or other rental or financial obligations which could result in an eviction,” the court explained that it had authority to assess its cases and decide whether that condition precedent exists, thereby triggering the protective stay. Because the instant respondents had no obligation to pay rent or use & occupancy, the condition precedent did not exist and thus the ERAP stay not triggered.
ERAP Hearing Granted in a Nonpayment Case
Most recently, a different approach to a very different set of facts was taken by an Albany City Court in Cohoes. In Harmony Mills W., LLC v. Constantine, the court addressed a landlord’s request for a hearing on whether to lift the ERAP stay in a nonpayment proceeding. See No. LT-124-22/CO, 2022 WL 1209695 (N.Y. City Ct. Apr. 25, 2022). The tenant, who lived on a fixed government income, claimed that she was unable to pay rent due to financial hardship resulting from the COVID-19 pandemic. The landlord disputed the tenant’s alleged hardship, and claimed that the ERAP stay was inapplicable because the tenant had not experienced financial hardship due to a fixed government income, which remained unchanged.
In reaching its decision, the court explicitly rejected the canon of constitutional avoidance applied in Abuelafiya, characterizing it as “an alluring invitation to judicial mischief” and then noting that its use was not appropriate for the ERAP statute because the statute is not ambiguous. (According to, for example, Scalia & Garner, Reading Law: The Interpretation of Legal Texts § 38 at 247-248 [1st ed 2012], the canon of constitutional avoidance shall be applied only where there is an ambiguity in a statute’s text.) The court then addressed whether ERAP section 8 lacks due process for landlords. Reviewing key constitutional jurisprudence, the court found that due process requires a tripartite inquiry: (1) does an eviction proceeding implicate a landlord's property right; if so, (2) does ERAP section 8 deprive the landlord of that property interest without notice and the opportunity to be heard (i.e., due process); and, if so, (3) what process is the landlord due. Answering the first two questions in the affirmative, the court determined that landlords are entitled to a hearing to ascertain whether an ERAP application was filed in good faith. Specifically, the court directed that the landlord must persuade the court by clear and convincing evidence that the tenant's ERAP application was made in bad faith—that is, made without the realistic possibility that the tenant is eligible for assistance—or there is no realistic possibility that the landlord will receive payment from OTDA. This holding presents some similarities to a landlord’s ability to challenge a declaration of hardship under re-fashioned CEEFPA.
As no appellate court has addressed the ERAP stay, questions and uncertainty surrounding the stay abound. Eviction defense practitioners may be wise to note the rather extreme circumstances under which courts have lifted ERAP stays. Those representing property owners may prefer to play dress up as legal academicians and see if local judges are impressed by erudite references to canons of statutory interpretation. It is unknown how these legal questions will play out. What is known and what may be bittersweet for eviction defense practitioners is that the ERAP stay is likely the last pandemic creation to resemble a de facto moratorium on evictions in New York for a very long time.