A proposed city bill that would give retail tenants control over lease renewals – in effect, commercial rent control – would not stand up in court, according to a recent report.
The Small Business Jobs Survival Act, which was proposed in March by City Councilman Ydanis Rodriguez, would give commercial retail tenants a right to a 10-year lease renewal, given they met the terms of their existing contract, according to Crain’s. If a landlord refuses, or an agreement cannot be met, tenants are given a lease extension during arbitration.
But the bill lacks legal grounding and has been proposed several times in the past. Commercial rent control did exist in New York, between 1945 and 1963. But the state law mandating it expired and it has not been reintroduced.
Last month, a form of commercial rent control was introduced to Inwood rezoning scheme, that would force new mixed-use developments receiving $2 million or more from the Department of Housing Preservation and Development to give commercial tenants a lease of at least 10 years “with limited rental increases.”
The New York Bar Association wrote in its recent report that the city is not backed by City Charter, state Constitution or state law to enact commercial rent control that would give power to tenants — mostly small businesses. In the past, the Association wrote, courts have been reluctant to impose resident rent control, and commercial rent control faces even greater challenges to justify under law.