Bar Association: NYC Has No Legal Rights to Establish Commercial Rent Control

On Tuesday, the New York City Bar Association released a report stating that the city does not have the legal authority to establish commercial rent control. The statement conveys the association’s opposition to the pending bill, which was crafted to give retail tenants power over lease renewals. Should the bill be passed into law, the bar says it would probably be shot down in court.

Risings rents, the shuttering of businesses and store front vacancies have led to a plea to instate some sort of commercial rent control in NYC. Though exciting and popular, the notion still seems like a distant fantasy. On Tuesday, the New York City Bar Association released a report stating that the city does not have the legal authority to establish commercial rent control. The statement conveys the association’s opposition to the pending bill, which was crafted to give retail tenants power over lease renewals. Should the bill be passed into law, the bar says it would probably be shot down in court.

As reported by Crain’s NY, in March, City Councilman Ydanis Rodriguez released the Small Business Jobs Survival Act, which is considered a form of commercial rent control. The bill, which has failed to transpire again and again, would allow good-standing tenants a 10-year lease renewal. Should the landlord fail to negotiate the renewal, under the proposed bill tenants would have the right to extend the lease through binding arbitration.

Although the five boroughs of NY did successfully institute this sort of commercial rent control from 1945 to 1963, it does not seem as though there is a close chance of revival now. Critics have been arguing that this violates the U.S. constitution. Now, this new report, suggests that the pending bill goes against NY laws as well.

The Bar Association report opposes the bill on three points. First, the city lacks the explicit authority to pass rent control via the City Charter, state Constitution or state law. Next, courts have been quick to overturn laws attempting to establish residential rent control, much more so would the establishment of commercial rent control be unjustifiable by law. Third, enactment of the proposed bill would create many inconsistencies with existing provisions of the State Real Property Law, and laws inconsistent with the state’s legislation would be invalidated.

By: Ilana Siyance

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