N.Y. Landlords to Governor: Spare Us Taxes If We Can’t Evict

(Bloomberg) -- A group of New York City landlords said they shouldn't have to pay property taxes if they can't throw out tenants who don't pay their rent.

Three real estate companies made that argument in a lawsuit filed Thursday in federal court in Manhattan against New York Governor Andrew Cuomo, who has declared a moratorium on evictions in response to the coronavirus outbreak until Aug. 20, as well as New York City Mayor Bill de Blasio and the city's Finance Department.

According to the lawsuit, the moratorium violates landlords' property and due process rights and has created a “nightmare scenario” in which they can't collect rent from commercial or residential clients but still have to pay taxes and late fees. The companies are seeking a court order allowing evictions to go forward or authorizing the state and city to offer extensions or payment plans for property taxes.

The companies suing for tax relief include ENT International Realty Corp., the owner of 139 Fulton Street, also known as the Bennett Building, a landmarked cast-iron building in the Financial District dating from 1873.

Cuomo announced the moratorium on March 20, shortly after New York issued its stay-at-home order. He said it was in response to the fear of many state residents that the lockdown would prevent them from working and paying their rent. The state is also prohibiting landlords from charging late fees on rent and allowing tenants to apply their security deposits toward rent.

Thursday's suit, which followed a May 27 action by the owners of eight Westchester County apartment complexes who similarly called Cuomo's moratorium unconstitutional, tried to strike a conciliatory tone.

“The governor's response to the pandemic has been exemplary given the sudden and dire ramifications faced by the state and its citizens,” the city landlords said. “However, he totally forgot about and left out thousands of property owners, who are the backbone of New York's economy, without any sort of property tax relief in sight.”

The case is ENT International Realty Corp. et al v. Cuomo et al, 20-cv-4277, U.S. District Court, Southern District of New York.