The following papers numbered 1 to 3 were read and considered on the Petitioner’s application for a hearing to determine the Respondent’s hardship Papers Numbered Notice of Motion and Affidavits Annexed 1 Order to Show Cause and Affidavits Annexed Affirmation/Affidavits in Opposition 2 Summons and Complaint Replying Affidavits 3 Filed Papers Exhibits Memorandum of Law DECISION AND ORDER Petitioner R.J. Rose Realty LLC commenced this nonpayment proceeding to recover possession of the commercial premises and a money judgment for arrears in the sum of $36,351.93 with interest from April 1, with costs, disbursements and attorney’s fees. On or about June 2, 2021 Respondent filed a COVID-19 Hardship Declaration. PROCEDURAL HISTORY The petition was returnable on January 11, 2021 yet the matter was adjourned on several occasions pursuant to the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 (hereinafter “CEEFPA”) until October 13, 2021. Petitioner now moves for a hearing to determine whether Respondent meets the criteria under the New York State eviction moratorium to establish a hardship stay. ARGUMENTS Petitioner alleged that it has observed Respondent conducting “ongoing business operations at the subject premises”. Petitioner acknowledged that while Respondent may have suffered a loss of income, a stay of the matter is not warranted. Petitioner that Respondent’s unit is one of the largest and the stay has created an untenable position for Petitioner in the outstanding arrears total of $159, 308.72. Respondent, a costume supplier and maker, opposed the scheduling of a hardship hearing. Respondent argued that it has suffered a financial hardship as the pandemic shut down all theatre productions for a year. In support, Respondent annexed copies of its New York State Quarterly Sales and Use Tax Returns. The tax returns reflect gross sales as follows: 12/1/19-2/29/20 $65,448.00 3/1/20-5/31/20 $22,953.00 6/1/20-8/31/20 $915.00 12/1/20-2/28/21 $14,604.00 Respondent further averred that the most recent quarter (6/1/21-8/31/21) resulted in gross sales of $15,603.00, “[a] fraction of the pre-pandemic sales” according to Respondent. DISCUSSION Under CEEFPA as originally drafted, a tenant needed only to file a hardship declaration alleging that the tenant was suffering a financial hardship related to the COVID-19 pandemic. The filing resulted in an automatic stay of the proceedings. Although the hardship was a rebuttable presumption, landlords were unable to challenge same. The legislation was thereafter amended following the Supreme Court’s decision holding that the CEEFPA provision precluding landlords from contesting the hardship declaration violated the Due Process Clause. Chrysafis v. Marks 141 S.Ct. 2482 (2021). The amended legislation extends the eviction moratorium to January 15, 2022. Act, Subpart A, §5. Further, it provides petitioners an opportunity to challenge the hardship declaration by alleging a good faith belief that the respondent was not suffering a hardship. The Court must thereafter direct a hearing on the validity of the hardship upon a petitioner’s motion. Id. at §10(1). In the present matter Petitioner’s principal alleged: “Our offices are located in the same building as respondent’s, and we have observed ongoing business operations at the subject premises. The fact that she is continuing the business and we were advised that Respondent had obtained governmental assistance related to the pandemic, leads us to believe that while there may have been some loss of income, it does not warrant a continuing stay.” (Affidavit in Support dated September 29, 2021. Respondent submitted documents which Respondent alleged demonstrates a loss of income related to the COVID-19 pandemic. However, the documents are limited in scope and deprive Petitioner the opportunity to verify the records by comparing same to the underlying business records. To hold otherwise would be the equivalent of permitting Respondent to self-verify the hardship declaration. Following the Supreme Court’s reasoning in Chrysafis v. Marks 141 S. Ct. 2482 (2021), such a procedure would deprive the Petitioner of due process. CEEFPA specifically includes a provision for a hearing in these circumstances and as such, Petitioner’s motion for same is granted. CONCLUSION After considering the facts and circumstances of the above-entitled matter, the court finds that Petitioner has made a sufficient showing. The hearing is scheduled for January 10, 2022 at 10:00 A.M. in Part IV. Appearances are required. This constitutes the Decision and Order of the Court. Dated and Entered: November 23, 2021
