In an attempt to help small business owners keep their shops, the New York State Senate is proposing the Small Business Survival Act, which aims to stop landlords from drastically increasing rent prices. If passed, the law would impose regulations on landlords and give commercial tenants the right to renew their leases.
There are currently 185,000 small businesses in New York City alone, many of which are unable to survive when their monthly rent rates are doubled from one month to the next. The Small Business Congress estimates that each month, 1,200 businesses shut their doors due to rent-related issues. These disputes often result in evictions and a complete shutdown of a company.
Under the new legislation, tenants are granted higher bargaining power. The tenant and landlord would be able to negotiate their own deal, but if an agreement cannot be reached, the tenant would have the right to request a third-party mediator to intervene. The cost of the mediator would then be split by both parties.
The bill also states that if a landlord decides not to renew a lease, that they must inform the tenant at least 180 days before the current lease expires. During the negotiation process, small business owners will also be able to opt for a 10-year lease renewal, which would cut down on the uncertainties of a changing lease from year to year.
State Sen. Tony Avella (D-Bayside) stated that the bill would help rein in what has become a serious problem across the city.
“This legislation will help to truly combat this small business crisis by preventing out-of-control rents that force small business owners out of business,” Avella said.
If a small business owner is struggling to stay at their current location, they can turn to National Funding for help. National Funding can assist small business owners with merchant cash advances and small business loans.