Corona, NY– State Senator Brad Hoylman and Assemblywoman Catalina Cruz this week introduced the Commercial Lease Efficiency and Resolution (CLEAR) Path Forward Act, a bill designed to reduce commercial evictions and encourage tenants and landlords to renegotiate terms of commercial leases outside of the courtroom. The bill is specifically designed to mitigate business interruptions and unnecessary commercial evictions due to a loss of revenue as a result of the COVID-19 pandemic.

Under existing New York law, a party to a commercial lease may excuse compliance with the lease where circumstances beyond their control make it impossible to perform. When Governor Cuomo called for the unprecedented shutdown of non-essential businesses due to COVID-19, businesses throughout the region were forced to close their doors. This action, while necessary for the health and protection of the general public, resulted in a severe loss of revenue for local businesses. These businesses face mounting debt due to the inability to pay high rents for storefronts that are inoperable.

The CLEAR Path Forward Act provides a roadmap for landlords and tenants to negotiate a settlement, prevent litigation, and avoid evictions. In such cases where the parties cannot reach a settlement, the bill provides clear criteria for the court to evaluate whether there should be a reduction of the rent or a termination of the lease. The bill also unequivocally provides that COVID-19 was an unforeseeable event to prevent inconsistent judicial rulings across the state. 

We are faced with an exceptional situation where our court system, especially our housing courts, will be stretched far beyond capacity once they reopen. The court’s ability to conference each commercial lease case for settlement will be significantly delayed due to calendar congestion and social distancing requirements. Similarly, hearings and trials will be delayed for the foreseeable future. As such, the parties to a commercial lease are provided clear parameters to reach a settlement that would benefit both sides.

The CLEAR Path Forward Act also puts our local small businesses on equal footing with their large “chain” competitors who are more likely to have the capital to engage in extensive litigation to achieve a substantial rent abatement.

“Eighty nine percent of businesses in New York City have fewer than 20 employees – these are the local neighborhood businesses that are in the most danger from the unprecedented economic circumstances caused by COVID-19. No one wants New York City to be a place where only chain stores and outlet malls can survive. That's why I'm proud to be working alongside Assemblymember Catalina Cruz on the CLEAR Path Forward Act, important new legislation which will help small business owners find a way to survive in these difficult economic times. Our legislation will help prevent unnecessary litigation and encourage out-of-court negotiations between commercial tenants and landlords to create a path forward for our small businesses," said State Senator Brad Hoylman.

“Our district is the epicenter of this epidemic, forcing the small businesses who are so important to our community to shut down for months. This bill would ensure that these unforeseen circumstances are deemed legally beyond their control. The majority of these businesses are immigrant owned, and are often a pathway for entry into the middle class. Prior to the epidemic, many of these business owners were struggling to stay afloat as rent began to rise. Now, with the state shutting them down, they are in danger of losing their only source of income and face mounting debt and possible eviction. The CLEAR Path Forward Act will encourage re-negotiation of lease terms where possible so that businesses can remain open,”said Assemblywoman Catalina Cruz.