(iStock/Illustration by Kevin Rebong for The Real Deal)
In an effort to survive the financial fallout of the coronavirus pandemic, thousands of New York City restaurateurs entered into a perilous agreement with their landlords: deferring rent in the hopes that they’d be able to pay when their fortunes improved.
Thirty-seven percent of restaurants have deferred their rent due to the coronavirus pandemic, according to a recent report by the New York City Hospitality Alliance. But that pales in comparison to the number of restaurateurs who could not pay part or all of their rent: 92 percent in December, a figure that has risen steadily since the first Covid-19 lockdown was imposed last spring.
Assembly Bill A3139 was introduced by Assembly Member Harvey Epstein on January 22, 2021. The bill is currently in committee but, if enacted, it will amend New York’s Real Property Law.
Tuesday, February 9, 2021
Assembly Bill A3139 was introduced by Assembly Member Harvey Epstein on January 22, 2021. The bill is currently in committee but, if enacted, it will amend New York’s Real Property Law and Tax Law to require the recording of mezzanine debt and preferred equity investments and subject it to the mortgage recording tax. These amendments will force borrowers and lenders to reconsider the economic costs of mezzanine financing.
The first major change is the requirement for the recording of mezzanine debt and preferred equity investments entered into simultaneously with mortgages secured by real property. If enacted, the law will amend Real Property Law, Section 291-k to require mezzanine debt or preferred equity investments to be recorded whenever a corresponding mortgage is recorded against real property. This provision encompasses “debt carried by a borrower that may be subordinate to the primary lien and is senior to the common shares of an enti