The Small Business Jobs Survival Act is a simple, fair, and effective solution to several of the city’s major economic problems.
It offers the only opportunity to restore economic equality to our business owners, save our art and cultural institutions, maintain the character of our neighborhoods, save the best pathway to social mobility for the majority of low-income families, and reestablish NYC as the Gateway for the American Dream.
SBJSA deals with only a single business process: commercial lease renewals.
How important is the lease renewal process to the stability, vitality and future of our city’s small businesses to sustain growth and create jobs?
- The number one reason given for 30 straight years for established businesses (5 + years) to close, was the failure of the commercial lease renewal process.
- The number one reason given for 30 straight years for the laying off of employees in established businesses has been the failure of the commercial lease renewal process.
- The number one reason for our city’s small businesses becoming unstable and stopping growth and ending capital improvements and delaying all future expansion plans, has been the failure of the commercial lease renewal process.
- The number one reason for the increase of illegal extortion of the mostly immigrant owners by unscrupulous landlords demanding cash under the table or the loss of their business, has been the failure of the commercial lease renewal process.
SUMMARY OF SBJSA
The Small Business Jobs Survival Act (SBJSA) is a bill that has been introduced in the NYC City Council that would give commercial tenants three specific rights:
- A minimum 10-year lease with the right to renewal, so they can better plan for the future of their business.
- Equal negotiation terms when it comes time to renew their lease with recourse to binding arbitration by a 3rd party if fair terms can not be found.
- Restrictions to prevent landlords from passing their property taxes on to small business owners.
STEP BY STEP
The law would create a quick step by step process to arrive at fair lease terms. One which is controlled by both parties and can be stopped at anytime by mutual consent. An arbitration process, which gives both parties equal opportunity to present their arguments for their reasonable terms of the lease. A process which takes into consideration the unique nature of every business and every business community, where the arbitrator’s decision is guided by strict criteria and based upon a case by case situation to decide fair and reasonable lease terms.
WHAT PRESENT LANDLORD ABUSES WOULD BE STOPPED BY THIS BILL?
- End illegal extortion of commercial tenants who are forced to pay money under the table to keep their leases
- End rent gouging by landlords
- End instances in which landlords refuse to even negotiate a lease renewal with the tenant
- End instances in which landlords refuse to bargain in good faith with their tenants
- End instances in which landlords work deals behind the backs of the tenants in order to take over their successful businesses or in some way gain profits as a result of the years of hard work by the tenants
- End instances in which landlords pass along all their own costs and responsibilities onto their tenants to pay
- End instances in which landlords only want to offer short term leases to the tenants so they can be in a better position to speculate on the property
- End excessive security deposits without interests going to the tenants
WHAT ARE THE GOALS OF THIS BILL?
- Protect business tenants from unreasonable lease demands, thus keeping successful businesses from going under due only to rent gouging or unfair lease terms.
- Stop the loss of jobs resulting from excessive rents or business failures due only to exorbitant lease demands.
- Put stability and predictability back into the free marketplace, which would result in encouraging business expansion and the creation of more jobs.
- Give businesses longer leases, which would enable them to expand, create jobs, and take advantage of the loan and assistance programs in the private sector as well as from government agencies. Longer leases promote economic growth.
- Stop illegal extortion by unscrupulous landlords.
WHO IS PROTECTED UNDER THIS BILL?
- All manufacturing businesses
- All Not-for-Profit organizations
- All performing arts and theater groups
- All retail businesses
- All service businesses
- All professional medical offices and businesses
- All commercial tenants in New York City
HOW LONG IS THE LENGTH OF COMMERCIAL LEASES?
To encourage stability and growth, the minimum length of lease is 10 years, but a shorter or longer length can be established if both parties agree.
This is not commercial rent control. The government would not set the rent for even a single business of the city’s estimated 200,000. The bill only establishes the guidelines for the process of commercial lease renewals.
This bill does not interfere in the general marketplace, but instead focuses on only existing commercial leases entering into the lease renewal process. A landlord can charge whatever they wish in the open market for empty businesses. For new leases, they have no guidelines or regulations to follow in deciding their rent demands or the terms of the lease.