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City and its Landlords Express Apprehension about the New Lease Proposal by City Council

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City council’s new lease proposal is giving sleepless nights to the landlords in the city. Other than the commercial tenants and the retailers, most others feel that this could be a torturous move for them.

 

New York City, September 21, 2014

By Indranil Bhattacharjee
September 21, 2014

The so-called progressive lease proposals from the City Council to safeguard the interest of commercial tenants and retailers have evoked a negative reaction amongst most others. These proposals will protect commercial tenants from paying astronomical figures as rent and being thrown out of from their premises once the lease period is over.

This proposal was put forward by a number of council members including Daniel Dromm, Ydanis Rodriguez, Vincent Gentile, Margaret Chin, Karen Koslowitz, Deborah Rose, and Public Advocate Letitia James. However, many experts feel that if passed, this proposal will lead to the complete destruction of the tax base of the city and its value of commercial property because many commercial property owners will be left with no other alternative to selling their property.

Talking about the probable outcome of these proposals, the Real Estate Board of New York’s President Steve Spinola said, “This is the kind of bill that would send a terrible message to the business community about having arm’s-length transactions between two parties. City Council attorneys have suggested in the past, and we still believe, it is not within the scope of the powers of the City of New York, and if it moves ahead, it will be subject to legal challenges.”

The proposed legislation comprises of several questionable provisions that hint at creating a system for residential rent stabilization and control. According to this proposal, the lease terms would now be set for at least ten years unless the tenant wants a term shorter than ten years.

Richard Cohen, one of the most prominent building owners in New York, feels that there was no need for a law like this. “It makes sense to negotiate deals with our existing tenants, so any quality landlord recognizes the mainstay of their building is a good relationship with their current tenant,” he says.