An Upper West Side Landlord Explains His Conundrum

By Robert Tannenhauser

I am an Upper West Side resident and a landlord of a multi-family building with several street level commercial tenants.

Like many of you, I am staying home because of a pre-existing condition and my age. My responsibility to my residential tenants is to make sure that we maintain a safe and secure building during this challenging time. To this end, our building staff is working overtime to not only perform their normal duties, but also disinfect common areas and on an hourly basis disinfect door knobs, elevator buttons, stairway railings and other items that are frequently touched. They also have to deal with tenant package deliveries and perform emergency repairs, all the while maintaining social distancing for their protection and the protection of the tenants.

Our commercial tenants have closed their stores and it is questionable whether they will survive, much less pay their rent. Residential tenants, many of whom have seen their source of income disappear, are looking for rent relief.

We understand and want to help but here is the conundrum. We have to pay our staff, pay our mortgage, pay insurance premiums and pay real estate taxes. Unfortunately rental real estate businesses are not eligible for relief under the CARES Act. To make matters worse, most mortgage loans, including ours, prohibit their borrowers from giving rental relief and thus far the government has not offered relief from real estate tax payments which are due in 2 ½ months.

We can only hope that those tenants that can afford to pay some or all of their rent will do so and the government will offer relief on taxes and mortgage payments, which we can pass on to our tenants. If buildings default on mortgage payments resulting in foreclosures, this will cause losses to banks and further exacerbate the economic crisis.

*Robert Tannenhauser and Carol Tannenhauser, the editor, are married. This article was written by Mr. Tannenhauser alone.


NEWS, REAL ESTATE | 63 comments | permalink
    1. UWSer says:

      I don’t want to assume, but I’m left wondering if the author has any relation to the WSR editor who posted this piece. It doesn’t invalidate his point of view or his experience (these are tough times for everyone, including building owners) but ethically it may be appropriate to disclose if a person who runs this website has a financial interest in the position being advocated for here, especially as it is being posted under the banner of “news.”

    2. ben says:

      I, a renter, honestly believe that while rent relief by landlords is an incredibly nice thing for them to do, it is just that. You can’t fault the landlords for deciding AGANST offering rent relief, certainly not when it’s not obligated. Eviction has already been suspended hasn’t it? So let’s all hunker down and we’ll come through it on the other side together.

    3. Jerry says:

      An executive order signed by Governor Cuomo in March compelled New York State’s financial services agency to require that “any licensed or regulated entities provide to any consumer in the State of New York an opportunity for a forbearance of [mortgage] payments.” The agency later released terms that said financial institutions regulated by the state must offer the option of forbearance, a mechanism through which a lender agrees to temporarily suspend or reduce payments. Payments would not be entirely eliminated, Cuomo noted, but the mortgage would be adjusted so payments were tacked on to the back end. He also promised no late fees or hits to an individual’s credit report.

      Meanwhile, the federal government has directed lenders who service government-insured mortgage loans to allow borrowers the option of deferring payments for up to a year, but the length and terms of forbearance plans have varied bank to bank.

      Beyond that, I think the City and State will need to do something about real estate taxes….

      AND, very many of us are waiting/hoping/praying that the New York State Legislature will enact (and Cuomo will sign) legislation declaring some kind of temporary rent holiday for the millions of us who live in rental units and have no current means of income.

      • RT says:

        Governor Cuomo’s Executive order only applies to State Chartered Banks and as you noted the federal mandate only applies to federally insured loans. Unfortunately most of us have loans from federally chartered banks and are not federally insured .Real Estate Tax relief would be nice and should be conditioned on passing on any benefit to tenants.

        • EricaC says:

          Also, forbearance just means delay – not cancellation.

          The expenses will continue to accrue. How will a rental holiday work if the tenants are excused from paying buyer the landlord is not?

          There are a number of relief programs in the CARES act, I hope one will help you!

    4. Joan says:

      A question for the landlord. Can you use the extra month or 2 months rent that are put in escrow when the tenant first leases the apartment? It seems that might help some tenants who are totally strapped because they are freelancers or out of work. This way the landlord would be paid for that month and give some much needed relief to the tenant.

      • RT says:

        I believe most landlord’s would welcome this. However, I think we need guidance from the State and City as to whether this is permissable, unless of course the tenant requests that we apply their security deposit.

      • Joyce says:

        Very good point!

    5. JaneW says:

      To Robert and Carol: So sorry to hear that the so-called CARES Act doesn’t care about landlords. I hope things change.

    6. Mike says:

      so glad someone is talking about this.
      Of course landlords want to help but they need to offer relief for us in order for us to extend that courtesy

    7. Anticipating problems is good, but crying poverty this early in the game is premature. In two and a half months, there may be sufficient income to pay the property taxes. There is plenty of time after the due date before a tax lean will be applied.

      The banks will not close because a few mortgage payments are missed. Big businesses are already gearing down. If they are eligible, laid off workers are going to get unemployment.

      Tenants who don’t pay rent on time could be enlisted to help clean the building and provide needed services. Many landlords give free rent to maintenance staff and declare it as an expense. Some sacrifices will have to be made. It is not the end of the world.

      • Sherman says:

        There is zero chance NYC tenants will be willing to do maintenance work in the buildings they live in.

        I’m not a lawyer but even if some tenants did agree to do this work there has got to be a host of legal problems with this.

        And for the sake of argument a bunch of tenants did decide to take on this work this would lead to building staff – doorman, porters etc – losing their jobs.

        Your proposal makes zero sense.

        • The landlord will be laying off full time staff when paying them is no longer possible. There may be no choice but to hire a tenant. I would think there are many tenants that would love to work for free rent.

      • LW says:

        Your proposal makes no sense, the landlord should fire full time staff that actually want to do the work and are qualified for it to letting tenants ‘volunteer’ and get rent free? And also, taxes, especially ones on large NYC buildings are large. So yes worrying about them 2 months ahead is appropriate, cause they probably were counting on money in the future to pay. And your belief things will magically get better in 2 months is delusional. Even if things slowly start, do you think all 10 mm American will be back to work and things will continue like nothing happened? This is going to have a long trickle down effect.

        • Jay says:

          Yep. There’s a lot of not well thought out ideas floating around these days. This is one of them.

        • The situation will definitely be better in two months. Businesses and private citizens will become creative in order to survive.

          There will be many unemployed people all over the country. Unemployment is being extended and payments are being increased. For those lucky people that are able to take advantage of the safety nets there will be hardships and they will be able to survive.

          Those landlords that have the assets and the cash may be able to keep their workers. The big buildings in the high priced neighborhoods will definitely cut some staff and keep a skeleton crew. Many superintendents already live in those buildings and are being paid with cheap rent as compensation.

          The smaller landlords are already using part time staff. Some are being paid off the books. Whatever rent is being collected will be allocated toward paying the taxes and expenses that cannot be put off.

          The free rent if not already deducted as an expense, will be paid as if it were a salary. The uncollected rent will now be paid as salary and deducted as an expense. Income taxes will have to be paid as if the employee were on the books but not at the level of a full time employee. The lost rent will be listed as an expense when taxes are filed. This will lower income taxes for the landlord.

          The possible loss of six months rent and not having to pay salaries and all the costs of full time employees is plenty of incentive to have tenants do work for rent. Businesses will be thinking strategically how to lower costs and make due with what they have. This is what can and will be happening.

    8. Yelena says:

      Those of us who are not able to work are receiving unemployment – I assume most… That should enable us to pay the rent… I I just did and fully intend to continue…:)
      And thank you for keeping the building in good shape, that is not an easy task right now.

    9. Darren says:

      We are in the exact same position, except double-screwed because our boiler broke this season and we had to spend a huge chunk of our savings on fixing it before the winter season. We have not yet replenished that cash so we have no backup. We now have 30%+ tenants non-paying and our bank is refusing to assist us.

    10. UWS35Years says:

      For those who are able, why not pay a few months rent upfront?

    11. chuck d says:

      This is not a conundrum. Your property is an investment, and all investments carry risk. In good times, it is why you were able to charge such high rents. But now here we are. Your investment is no longer as valuable as it was. Here are your options:

      -Keep charging rent as normal and evict people who can’t or won’t pay. You can do this, it is your right. Now, you’ll likely end up with an empty building and you won’t sleep well at night and no one will rent those vacant apartments at the same level as before, but it is still your right.


      -Sell the building. If you can’t afford to carry it during a downturn, you probably never should’ve taken on this investment. Sell it quickly. Before the neighborhood turns because this is a 5-year depression we’re heading into. Your building is just going to lose value in the short term.


      -Carry the costs if you can afford it. Your tenants will be grateful. They’ll help you rebuild when they can. You can help save your neighborhood and your building from deteriorating. You can keep the value up.

      That’s it. Those are the options.

      • Busy C says:

        Honest, direct, and true.

      • Albert says:

        I can’t help it but you sound like a lefty Donald Trump. Have some empathy pal. The man is only try to explain his situation. He’s a human being too with problems like everyone else. As for people who say tenants will clean the building, give me a break! you make it sound like anyone can do this job. You have no idea the amount of work that goes into it. It’s not the same as cleaning your apartment.

      • AJ says:

        Actually, you cannot evict people. There is a moratorium and who knows how long that will last. And once it is listed the court system is going to be a mess.

        We will see what happens but from all initial indications, we are heading towards a complete collapse of the rental market caused by non-paying tenants that will have catastrophic effects. The government needs to step in and provide relief for landlords. Good luck getting this Mayor to do that.

      • Mark says:

        Chuck, a true realist, you have written the landlords options down complete simplicity. They need to pick one and realize they have an investment that has made them plenty of money. It is what it is. They like collecting rent during good times. Of course, the rents will not be coming for a long time. No handouts for investors. Win or lose.

      • Wendy says:

        Chuck is brilliant! And I live in CA and own my own 20 acre ranch outright.

      • B.B. says:

        Rent regulated housing comprises largest share of NYC rental market, about sixty-five (65%) or so. Next largest share is made up of NYCHA, voucher and other subsidized housing. Market rate rentals make up the smallest part of overall city housing market.

        If your building is already essentially controlled by city/state (RC or RS) just where to you think such LLs are going to find wiggle room or money to simply write off unpaid rent on a massive scale?

        It already can take three, four or more months to evict any tenant in NYC for non-payment of rent, and those liens largely remain unpaid even after decades.

        RC and RS tenants cannot make side deals with LL to pay back rent because RGB sets rent increases.

        Legally only way for a LL to preserve his rights to unpaid rent is to formally ask for it by initiating legal action (three day notice or whatever).

        Then there is the matter of laches defense (stale rent) by a tenant when finally a LL commences legal action for non-payment of rent.

      • EricaC says:

        Selling in a frozen market is not always a possibility. And, frankly, I have sympathy for small-scale landlords – many of them are also at risk of losing their homes, and they are as worthy of sympathy as the tenants.

        Everyone can stick to their rights here, and that will lead to a lot of disruption and evictions or bankruptcies. Or everyone can realize that this is not a normal time and everyone – both tenants and landlords – will have to compromise!

    12. Charles Mcguire says:

      The government ordered people to stay home and not go to work.
      The government needs to step in and put a freeze on all rent for 6 months
      It’s a ripple effect that only started when the government ordered people to stay home

      • LW says:

        By your logic the government should pay everyone’s rent then. Why should it be the landlord that suffers so the tenant can live rent free and the government is allowed to freeze rent? We should be talking about government freezing/suspending tax payments if they really want to help

    13. JS says:

      This is a very informative article. Thank you!

    14. B.B. says:

      A few points:

      BdeB and others in city government recently announced they would like to see LL’s apply one month security deposits to past rent due. However that requires action from Albany and not everyone believes it is a good idea.

      Though not intended purpose many tenants already move out/are evicted for nonpayment and allow LL to keep all or part of security deposit. That of course means LLs get some of the past due amount owed. So what happens if security deposit is used now to pay off arrears? Where is the money going to come from to replace legally allowed security deposits?

      Purpose of security deposits is to ensure at end of lease apartment is surrendered in good condition. Otherwise LL may apply all or portion of held funds to make repairs. Again if that money is used for other purposes and not replaced what happens at end of lease?

      Unemployed are receiving $600/wk extra on top of their normal benefit check. Former alone is $2400 per month, a not insignificant sum. On top of this many will also get a stimulus check of $1200 or more.

      So while yes, there may be some individual dire situations a good number of New Yorkers will be fine once money begins arriving. As such a blanket rent forgiveness or whatever seems rather misplaced. Rather something along lines of helping those who for whatever reason aren’t getting that extra $600/wk or any state unemployment.

      NYS has banned all evictions until end of June. And while many managing agent/LL offices are open and could in theory begin legal non-payment actions the courts are saying “no”, don’t do that. For one reason answering a court summons would violate state’s PAUSE act and expose people to public activity at a time when they should be socially isolating.

      In three months many tenants will have worked something out with their LLs.

      My guess is Andrew Cuomo and others who aren’t in favor of any sort of rent forgiveness are counting on newly expanded and enhanced tenant protections of recent rent laws.

      It has become virtually impossible or at least difficult to evict rent controlled tenants for nonpayment. If case is brought in housing court it is almost surely going to be stipulated out. That is LL and tenant will work out some sort of repayment plan that takes care of past due rent. Given current crisis would imagine courts will press for generous repayment terms.

      Only way state and or city can impose themselves on legally valid contracts (leases) is to either pay LLs themselves, or offer something in kind that makes them whole. Absent either of two or similar actions there is very little else that can be done.

    15. Vic Delta says:

      I am a landlord and excused the rent on one rental. On another the renter works from home. The third tenant is still working. You have commitments that you must honor to your workers and to tenants in order to maintain your buildings.

      Larry Gluck owner of Stellar Management is worth $2.5 billion. It seems he could provide or help in cooperation with New York State to come forth with rent relief.

      Some people want to be part of the solution to this problem such as yourself, and some people are greedy, selfish jerks.

    16. JOEL KRAVET says:

      govt mandated all commercial stores be closed,, unable to generate income. yet the landlord demands full rent on property that can not generate income/ why doesnt state suspend rent on stores until they can open??

    17. j_remps says:

      Oh no, not losses to the banks!

      Landlords make an investment when they buy a building in NYC, and investments carry risk. Why does the landlord get to keep all the profit from the investment but expect to pass off all the risk onto their tenants? Especially when the risk to them is default on loans and damage to their credit, while the risk for us is literally living on the street? Owning a building in NYC should be profitable enough to get through a couple months of downturn. 2.5 months is a long time for potential relief to come through if this continues. Sorry I’m not super sympathetic to the plight of the Lords of Land!

      • Isaac R says:

        Spot on

      • 92nd Street says:

        Funny, until you own a building in the most regulated City in the world, do not assume it is profitable.
        You live in the most expensive city on Earth, does that mean that you are a Millionaire?

    18. Techgal says:

      There must be some way to distinguish between a landlord that oens a single building, and large, corporate real estate companies like the Blackstone Group and LeFrak.
      I mean, I would give Shakespeare & Co a break, but that doesn’t mean that Amazon should get one. My landlord owns around 3 dozen buildings in Manhattan and Queens. They aim to maximize profit and minimize services, although we are classifies as a “luxury high rise”.
      If you are one of the good ones, then my heart goes out to you. As for thw rest…

    19. Retailer says:

      The Cares act is a payroll protection plan meant for me as a retailer to retain employees during a shutdown ordered by civil authorities. Only 25 percent can be used for expenses other than payroll and health insurance but limited to interest on loans and rent. PPP is for two months of defined expenses. That 25% covers about week my monthly rent. Two small stores. Think about that. I like Bob he’s a client of mine. Perhaps we’d be in a stronger position had we not suffered under scaffolding for years with no rent relief. I’ve been told “You know the landlords don’t set the rent it’s the market” it’s not about sympathy it’s about cooperation if our neighborhood is going to recover. It’s a chance to reset. I’m hopeful! Bob’s problem and my problem would be easier if the ten of thousands of dollars we’ve paid over the decades for business interruption insurance didn’t have a virus exclusion add in 2008. Fortunately, federal and state authorities are starting to focus on that.

    20. Joan says:

      There are buildings that get 4 or 5 months rent in escrow from freelancers because they are considered a risk. These people will not be able to “Just get another apartment”.

    21. Joyce F says:

      Couldn’t agree more with you. It sounds like you’re a very good hearted, thoughtful landlord who truly cares about its tenants and employees. Perhaps consider writing your tenants an equally thoughtful letter with fully transparency of your actual $ expenses- you don’t have to put rental income- there are so many positives about the Cares Act and PPP, but the landlords are on the short end of the stick with the moral hazard of people not paying even if they could. Good luck!

    22. The greater issue at stake is that the housing provider and the landlord has become defacto the state regarding tenants who cannot pay their rent how is it possible that 1 American individual is now responsible for the welfare of another individual with no compensation the landlord and housing provider are responsible dividing space and maintaining that space in an electrical and mechanical and not providing a welfare state for tenants this is the essence of discrimination when one side is held to a different standard than the other based on nothing more then their position in the equation of supply and demand.

    23. Dee says:

      I am a tenant but I really feel for this landlord. Many people feel because a person owns a building they can afford to have tenants license free. That may be true for the big corporations, but not the independent landlords. I understand what he is saying, however, although this virus was unexpected, people must also look at how they prepared for an emergency, myself included.
      What I learned is , I was not prepared but I could have been. Instead of having a back up plan, I spendt money, I could have used for an emergency. So instead of getting angry at landlords, perhaps people should look at their life styles and think about what they will do the next time.

    24. BS says:

      Landlords could offer rent rates at cost so they aren’t profiting on unemployed tenants. And they can still make their bill payments. As for tenants helping out – article says they are working (and therefore paid) overtime. Tenants whose rent is forgiven could potentially pick up the overtime slack. Just some thoughts.

    25. Lewis says:

      Isn’t it interesting how politicians always manage to make sure they still get paid no matter what happens? Fire em all!

    26. B.B. says:

      There are huge micro and macro economic issues surrounding any freeze or forgiveness of commercial or residential rents.

      First and foremost if rent is not collected then a LL doesn’t have income that is taxed. On residential side alone you’re talking about millions of dollars per month.

      Such deficits will in turn harm both NYS and local governments by reducing income tax revenue. So question becomes where or how such revenue can be made up, and make no mistake that must happen. You just cannot remove hundreds of millions in tax revenue without taking huge hits to budget, and bond ratings.

      Keep in mind by statue both NYS and NYC must have balanced budgets. So again revenue lost must be replaced, and or spending cuts enacted to meet revenue.

      As of 2017 there were:

      Non-regulated apartments – 936,850

      Rent controlled – 21,751

      RS (pre-1947) – 692,687

      RS (post 1947) – 273,755

      Other regulated – 258,021

      Since 2018 more rental units (new construction) have come online.

      To above figure average rents vary from a low of about $1500 for RS tenants to nearly or above $4k for market rate.

      Plug in those two numbers in any percentage wished and either way you arrive at huge sums in rental income due each month. No economy can afford to simply have those funds vanish without causing great harm to tax base.

      City and state could give LLs something in kind (and indeed to avoid takings clause of USC one or both likely would need to), but there is no free lunch. Neither local nor state governments print money like federal. Their primary source of income is tax revenue.

      • Excellent points. Did you include the roughly 175,000 NYCHA apartments on properties that already do not pay real estate taxes?

        The government in the end will have to pay for a lot of things. Those who think they will have these huge windfalls from unemployment will be shocked to find out that they will be paying taxes on that income. Nothing is free.

        • B.B. says:

          Report was issued by RGB for 2019 Housing Supply Report.

          Other regulated units include public housing, Mitchell-Lama, In Rem, HUD regulated, Article 4 and Loft Board units.

        • B.B. says:

          Taxes will knock that extra $600 down to around $525 or so. But much will vary by household’s tax bracket and or whatever deductions/credits available.

          Even at $500 it still comes out to $2000 per month income. Will give you that if rent is between $1k and $1.5k per month that doesn’t leave much wiggle room. But since nearly 40% of New York renters were already rent burdened (paying major part of monthly household income in rent) this is not something new.

    27. UWSer says:

      Would a rent reduction be possible? Like 50% discount for those who pay on time?

      • B.B. says:

        Most if not all landlords will not accept partial payments of past due rent. This is for various legal and other reasons but primary concern is that by doing so it could waive their rights to collect balance.

        There is no need for a LL to accept partial rent payments. If tenant does not pay rent in full a LL can begin non-payment legal proceedings. This most always ends up with past due rent rolled into a payment stipulation agreement. This gives both sides cover; a LL has things in writing he is entitled to back rent, and the tenant has their side covered by a court approved payment schedule.

    28. robert says:

      Unfortunately the media is not accurately reporting Cuomo’s political announcement. Just a short time afterwards his Dept of Finance issued a clarification that it was not a “suspension or moratorium” it was simply guidance for the small number of banks etc that are state chartered. It “urges” but has no force of law and allows these small number of banks covered by this guidance to decide on their own, on a case by case basis if the was actually a financial hardship.
      That said I think that most banks etc will not want the bad publicity. Also this policy is only in place for 90 days then its back to biz as usually.

      The media should report the actual facts not allow Cuomo or any governor, to score political points for his party.
      Here are the links to the two articles and the actual NYS Dept. of finance:

    29. We need to look at history for some of the answers. The depression of 1890. The information is sketchy and in some cases contradictory. The new ubiquitous railroad technology made it easier to travel to what was considered a suburb. Harlem was experiencing a real estate boom beginning in the 1870’s. Farm land became small cities. Some today would consider this over development. The rich invested in properties for use as summer homes to get away from the hot city. Harlem was the place to be.

      When the depression hit, there was no safety net for the real estate market. Values and incomes dropped dramatically. Over a short period of time, the demographics of Harlem changed. A lot of poor moved in to replace the rich. The well to do moved out to get away from the poor. It became more diverse. The remaining cultures and financial groups did not mix well.

      A hundred and thirty years later we are seeing a repeat of a crisis in a slightly different form. The issues are similar but at a different scale. Are there are lessons to be learned?

      • B.B. says:

        Some have already begun research and issuing (very early) predictions about effect of covid-19 on NYC rental market. They are not however going back over one hundred years. Rather using recent events such as 2008 recession and post 9/11/01.

      • B.B. says:

        Large parts of Harlem were over built based upon speculation driven by expansion of subway system.

        When an economic depression hit landlords were left with many vacant units, and or white families moved away who couldn’t afford to keep their properties. To fill these vacancies landlords began renting to two groups; African Americans and Eastern European Jews. That was the last straw for many remaining wealthy whites and they too fled.

        Strivers Row sat largely vacant for years until 1920 when owners finally began selling homes to African American professionals. Development was built on speculation and never really took off.

    30. EricaC says:

      I am not sure that it is correct that rental real estate companies are not eligible. Passive investment companies are not, but an actual real estate business should be. You may want to pursue that further with your bank.

    31. LAZARO DINH says:

      Great point, I have same issue in 200 units in Florida where my mortgage at 80% LTV is not being covered and I have 3 months reserve and I am done. Nothing on the mortgage that helps in this situation of a pandemic and no relief to tenants allowed. What we do next is a mystery. We even have some strange occupants that moved into a vacant unit and we can’t legally remove them because we have to evict by law.