The moratorium on evictions and foreclosures that has extended into a second year has been complex and ever evolving. My colleague, Jonathan Schechter, wrote about the impact on both landlords and tenants back in March. Later that month, I hosted a CLE that covered the topic in greater detail. I also discussed what the end of the moratorium might look like in a blog found here. Still, there are more updates, more new information and thus a new blog to keep our clients and community abreast of the latest developments.
Both the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 and the COVID-19 Emergency Protect Our Small Businesses Act of 2021, which were set to expire, were extended to August 31, 2021.
For landlords, many of whom are 15 months removed from collecting their last rent check, this may be seen as little more than kicking the can down the road. Regardless of the motivation, last month’s administrative orders are the latest and most detailed guidelines of interest to both landlords and tenants. The three orders (linked below for your reference) cover a number of important items including:
Requirement of Additional Affidavits in Newly Commenced Proceedings: No court shall accept for filing any petition or other commencement papers in an eviction proceeding unless those papers include affidavits as required by Part A, §5 of the Act; Amendment, §5).
Bar on Issuance or Enforcement of Default Judgments: Prior to August 31, 2021, no court shall issue a default judgment authorizing an eviction in a residential eviction matter or authorize the enforcement of an eviction pursuant to a default judgment, without first holding a hearing upon motion of the petitioner (Act, Part A, §7; Amendment, §2).
Stay of Execution of Warrants in Residential Eviction Proceedings: In any residential eviction proceeding in which a warrant of eviction has been issued but has not yet been executed as of December 28, 2020, execution of the warrant shall be stayed until the court has held a status conference with the parties until August 31, 2021. (Act, Part A, §8[a][i]); Amendment §3)
No court shall accept for filing commencement papers to foreclose a mortgage related to residential real property as defined by the Residential Act unless those papers include affidavits as required by Part B, Subpart A, §6 of the Residential Act.
No court shall accept for filing commencement papers to foreclose a mortgage relating to commercial real property as defined by the Commercial Act unless those papers include affidavits as required by Part B, Subpart A, §6 of the Commercial Act.
Filing and service of process in all foreclosure proceedings shall continue as set forth in Administrative Order 267/20.
Stay of Actions in Which the Mortgagor Provides a Hardship Declaration: In any covered action in which a judgment of sale has not been issued and a mortgagor or owner in a tax lien foreclosure as defined in either the Residential Act or Commercial Act ("Mortgago~" or "Owner'') has already submitted or hereafter submits a hardship declaration as defined in either Act ("Hardship Declaration") to the foreclosing party, the court, or an agent of the foreclosing party or the court, the action shall be stayed ( or commencement tolled) until at least August 31, 2021.
Stay of Actions in Which a Judgment of Sale Has Been Issued But Not Yet Executed: If a judgment of sale has been issued in any covered action on or before May l, 2021 but has not yet been executed, execution of the judgment shall be stayed until the court has held a status conference with the parties. If a Mortgagor has submitted or hereafter submits a Hardship Declaration to the court, a foreclosing party, or an agent of the foreclosing party prior to the execution of the judgment, the action shall be stayed until at least August 31, 2021.
It will be important for both tenants and landlords to keep a close eye on any discussion on extending these orders beyond August 31, 2021. At some point they will be allowed to expire, and then the challenge will become how to sort out the potential evictions, foreclosures and other actions that could flood the system.
One final note that bears reminding: Any tenant who has not been paying rent and has any form of protection from eviction or collection must remember, that money is still owed. There hasn’t been a rent forgiveness, simply a moratorium on evictions. When this is lifted, as of now, all past rent and/or mortgages payments will still be owed. We advise our clients on both sides of the aisle to prepare accordingly to avoid collection actions, evictions or foreclosures when the rules return to pre-pandemic status.
If you have questions or concerns, or are unsure of your options, give me a call anytime 716-854-4300 ext. 285.
To read the administrative orders issued by Judge Marks, follow the links below.
Order outlining residential evictions
Order outlining foreclosures
Order outlining commercial evictions
Nicholas J. Ingrassia is an attorney and shareholder of Gross Shuman P.C. He concentrates his law practice in the areas of Real Estate & Development, Banking & Finance, and Business & Corporate Law. Mr. Ingrassia also has extensive experience assisting clients with Estate Planning & Administration, and Canada-U. S. Cross Border legal issues. He is admitted to practice in New York State and as a Foreign Legal Consultant in Ontario, Canada. He can be reached at 716.854.4300 ext. 285 or email@example.com.