Stay on Evictions

08/21/20

     The President unilaterally extended the moratorium of evictions and mortgage foreclosures through August 31, 2020. Whether or not the President was authorized to do this, the Executive Order has a tremendous effect on Federal housing and Federally backed mortgages. This extension provides Congress time to continue its efforts to pass a more comprehensive package, which includes this type of relief. 

     The local eviction relief was initially extended through August 20, 2020. However, Governor Cuomo indicated that actions for non-payment may begin immediately, and evictions will be evaluated on a case by case basis. In particular, the issue is whether or not COVID-19 is the reason for the tenant’s non-payment. Also known as the Safe Harbor Act, this does not waive rent. Therefore, many tenants are concerned that landlords will commence non-payment actions only, which will create havoc on their credit scores and force them to agree to unfavorable resolutions, causing them even more financial hardship.

     Just recently, the Governor has extended the moratorium on the Sheriff issuing warrants from August 4, 2020 to September 4, 2020. This effected tenants against whom eviction proceedings were previously commenced, orders issued, but warrants not yet effectuated. The issuance of warrants was suspended due to the pandemic; and now, cannot be enforced until early next month.

     Landlords are now left in a precarious position – they are able to collect rent, but cannot evict non-paying tenants. Even when a money judgment is issued, collecting the money is difficult at best. Most tenants do not have assets to attach. Despite not being able to collect rent, landlords still have to pay mortgages and real estate taxes.  This is a tough situation for both landlord and tenant, as the Legislature has already passed a rent relief act awaiting the Governor's signature. The law indicates 90 days of rent and mortgage waived, but that could extend further. We will have to wait and see as the Governor has not yet made a decision to execute as currently written.

     As a result, landlords, who are not protected by any legislation, must protect themselves. Some of the main options available are as follows:

1)    Renegotiate leases

2)    Refinance mortgages

3)    Mortgage forbearance

4)    Commence non-payment proceedings

5)    File notices of evictions (albeit not being able to begin proceedings at this time)

     These options are vital to a landlord’s survival during this pandemic. They should all be explored as soon as possible with your accountant, mortgage specialist, and attorney.