City Council votes to extend a measure that protects restaurant owners who violate their leases
Renewed protections for restaurant and bar owners are on the way. On Wednesday, City Council voted to extend a measure that protects restaurant and bar owners who have not been able to pay their rent or have otherwise violated their leases due to the coronavirus pandemic. The new bill is an extension of measures originally put in place by the Council in May, which suspended the enforcement of personal liability clauses in restaurant leases and prevented commercial landlords from going after a tenant’s personal assets — including their homes and life savings — in the event of a rent default. Those protections, previously set to expire on September 30, are now extended until March 31, 2021.
In May, the City Council passed a slew of temporary coronavirus relief measures, including a cap on third-party delivery app fees, the elimination of sidewalk licensing fees, and a suspension of personal liability clauses in restaurant leases. Yet similar to New York City’s takeout cocktail or outdoor dining programs, those policies have a baked-in expiration date — and in the case of personal liability clauses, expiration could spell doom for restaurants and bars across the city, close to 90 percent of which were not able to pay full rent in August.
Earlier in the pandemic, Andrew Rigie, executive director of the NYC Hospitality Alliance, said that if the personal liability clause were to expire, a “massive wave” of restaurant closures would likely ensue. In a letter to City Council in April, restaurateur Gabriel Stulman wrote that the bill was the only thing separating him from going “bankrupt and belly up.” While the new bill does not exempt restaurant owners from previously unpaid rent, it does give them a shot at paying back those sums before the provision expires in six months.