COVID-19 EMERGENCY EVICTION AND FORECLOSURE PREVENTION ACT OF 2020

New York

Undisputed Legal | Eviction Services

The New York State Legislature has adopted legislation that extends the moratorium on residential evictions to more than one year from the initial Executive Order 202.8 in March of 2020, through May 1, 2021. Governor Andrew M. Cuomo signed the new COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 in furtherance of the same, wherein residential evictions, foreclosure proceedings, credit discrimination, and negative credit reporting related to the COVID-19 pandemic are curtailed. An additional feature of the Act sees the extension of the Senior Citizens’ Homeowner Exemption and Disabled Homeowner Exemption from 2020x to 2021, creating an all-around effect of protection for tenants and homeowners from the economic hardship incurred as a result of the COVID-19 pandemic.

[1.0] HOW DOES THE LEGISLATION WORK

The legislation also includes a two-month moratorium on pending evictions. This will then permit residential tenants who cannot pay their rent or secure alternative housing and who are suffering financial hardship or a health-related hardship to file a hardship declaration at any time. The hardship declaration would have to be filed under penalty of law with the landlord, court, or enforcement officer. It would prevent the filing, proceedings on, and execution of any eviction warrant until May 1, 2021. 

The bill language includes a hardship declaration form for landlords to use. This would require that a notice of rights and related information and the hardship declaration form (in size 14 point) be included with any rent demand or notice of petition served on a tenant. The hardship declaration must be provided in the tenant’s primary language. If such a translation is unavailable on the Office of Court Administration’s (OCA) website, it is the landlord’s responsibility to obtain a translation.

However, there is no confirmed provision for examining said hardship form before a court or even against the landlord themselves. The Act also attempts to defend certain property owners from credit discrimination through a hardship declaration form.  This is applicable if the owner has fallen behind on mortgage payments, or has received a stay of mortgage or tax foreclosure, or tax lien sale. This protection would apply only to owner-occupied primary residences with fewer than ten rental units.

[1.1] BACKGROUND LEGISLATION

On 28 September, Governor Cuomo declared that the State Tenant Safe Harbour Act would be prolonged and maintained until 1 January 2021 to shelter existing residents against displacement throughout the incumbent state of economic distress during the COVID-19 public health crisis. The Executive Order expands the Tenant Safe Harbour Act’s security to warrants for eviction that occurred before the pandemic outbreak and to others that are awaiting evictions other than non-payment but who endure the very same burden.

On 20th  March, Governor Cuomo initially declared a State moratorium on residential and commercial expulsions to guarantee that no tenants get evicted at the public health emergency height. On 30th  June, the Governor signed the Tenant Safe Harbour Act, which had become active immediately, along with supplementing legislation offering financial support to landlords and tenants. In conjunction, prior Executive Orders have excluded fines or penalties for delayed payment of rents. Renters facing economic difficulties may still use their security deposit as payment and recover the same over time.

When the COVID-19 pandemic began, we asked New Yorkers to protect each other by staying at home. As we fight our way through the marathon this pandemic has become, we need to make sure New Yorkers still have homes to provide that protection,” Governor Cuomo said. This law adds to previous executive orders by protecting the needy and vulnerable who, through no fault of their own, face eviction during a challenging period for New York. The more support we provide for tenants, mortgagors, and seniors, the easier it will be to get back on their feet when the pandemic ends. I want to thank the legislature for passing this important protection for New Yorkers all across the state who need a hand. This is the kind of support that helps us stay New York Tough.”

[2.0] FEATURES OF THE ACT

[2.1] EFFECT ON RESIDENTIAL EVICTIONS

The Act allows for a moratorium on residential evictions until 1 May 2021 for residents who have undergone COVID-related difficulties. Tenants must request a statement of hardship or a record describing the cause of hardship to avoid expulsions. Landlords can evict tenants who generate safety or health hazards for other tenants and tenants who do not make statements of hardship. 

All residential eviction litigation ongoing on 28 December 2020, which include eviction proceedings instituted on or before 7 March 2020, as well as any residential eviction proceedings initiated on or before 27 January 2021, are to be suspended for a duration of sixty days. Notwithstanding the above, an ongoing or freshly instituted action in which the plaintiff has claimed that the tenant is habitually and unjustifiably engaged in conduct that seriously infringes the use and comfort of other tenants or residents, or poses a significant safety threat to others, may continue to be heard in conjunction with the Act. The requirement of adequate affidavits in the freshly commenced proceedings means that no court would likely grant any petition or other notice of commencement in the case of eviction unless those records contain affidavits as provided by section 5 of Part A of the Act.

[2.2] INITIATION AND STATUS OF FORECLOSURE PROCEEDINGS

The Act also places a moratorium on residential foreclosure proceedings until May 1, 2021. Homeowners and small landlords who own 10 or fewer residential dwellings can file hardship declarations with their mortgage lender, another foreclosing party, or a court that would prevent foreclosure.

Any proceeding for foreclosure of a mortgage that concerns residential real property pending on December 28, 2020, and any action proceeding commenced on or before January 27, 2021, is stayed for sixty days. No court shall accept filing commencement papers in an eviction proceeding unless those papers include affidavits as required. 

[2.3] EFFECT ON EXISTING LIEN

The Act prevents local governments from engaging in a tax lien sale or a tax foreclosure until May 1, 2021. Furthermore, at least thirty days before the date on which a  sale of a  tax lien is scheduled to occur, or upon the filing of a petition of foreclosure of a  tax lien,  the enforcing officer or other person or entity conducting such tax lien sale or tax foreclosure is required to notify the owner of the affected property of such owner’s rights. Payments due to the locality are still due.

This act applies to any action to foreclosure on delinquent taxes or sells a tax lien relating to residential real property. This can be held as long as the owner or mortgager is a natural person and owns ten or fewer dwelling units. These units do not have to be in one property or building; however, the owner’s primary residence requesting relief must be included, and the remaining units must be occupied by a tenant or occupied for rent. 

To clarify, real property includes shares in a residential cooperative but cannot comprise vacant and abandoned property. 

[2.4] CREDIT DISCRIMINATION PROVISIONS UNDER THE ACT

Lenders are forbidden from discrimination against the property owner receiving credit unless the owner of the property has been issued a stay of the mortgage foreclosure litigation, a tax foreclosure procedure, or a tax lien on purchases. They are still forbidden from discrimination against the extension of credit if the owner is in arrears and has lodged a statement of hardship with the lender, which will not be negatively reported to any credit reporting agency as per the Act. 

[2.5] BARON ISSUANCE OR ENFORCEMENT OF DEFAULT JUDGMENTS

Before May 1, 2021, no court is authorized to issue a default judgment regarding eviction in a residential eviction matter without first holding a hearing upon the petitioner’s motion. In any residential eviction proceeding in which a warrant of eviction has been issued but has not yet been executed, execution of the warrant will also stay until the court has held a status conference with the parties. 

 If the court has awarded a judgment against a respondent on or before December 28, 2020, based on objectionable behavior, the court is authorized to hold a hearing to determine whether the tenant is continuing to persist in engaging in unreasonable behavior that substantially infringes on the use and enjoyment of other tenants or occupants or causes substantial safety hazard to others. 

For foreclosure proceedings, an action of stay is enacted in any circumstances wherein the judgment of sale has not been issued, and the adequate declarations of hardship are submitted to the foreclosing party or a court. This stay is valid until May 1, 2021. If the sale judgment has been issued but not executed by December 28th, then execution stays until a status conference is conducted with the parties. If the hardship declaration is filed, then the  Action stays until May 1st.  

[2.6] EXEMPTION FOR SENIOR CITIZENS  AND DISABLED HOMEOWNERS

The Act directs local governments to carry over SCHE and DHE exemptions from the 2020 assessment roll to the 2021 assessment roll at the same levels. This means that the to provide renewal applications for the same must be provided by localities to individuals who qualify for larger exemptions in 2021. This may be enacted via electronic or postal mail. 

However, autonomy is provided to localities to specify procedures wherein local assessors may require renewal applications from recipients they believe may no longer be eligible for the exemption in 2021. In furtherance of COVID-19 safety requirements, recipients are not required to show up in person to file their renewal if a renewal is required under any named circumstances. 

COVID-19 poses a historical hazard to public health. Citizens face displacement or foreclosure attributable to the mandatory disease control measures that have shut businesses and schools and induced widespread unemployment around the state. The contagion has also affected court procedures, the accessibility of counsel, plaintiffs’ ability to compensate for representation, and the ability to move freely to courts of law, settlement sessions, and other such institutions. Stabilizing the housing crisis for residents, landlords, and homeowners is imperative for all New Yorkers’ collective good and would help the state tackle the pandemic, safeguard public safety, and laid the groundwork for reconstruction. Therefore, the purpose of these laws is to prevent as many evictions and foreclosures as possible for people who have endured financial distress throughout COVID-19 or who are unable to travel due to the enhanced danger of serious illness or death from COVID-19. 

The law, which had been rapidly signed by Gov. Andrew Cuomo, has been proclaimed as “the strongest [legislation] in the nation to block eviction proceedings.” While, in concept, the goal is to shield tenants from eviction and owners from foreclosure and tax-related transactions, one will also recognize that the unintentional result of the extension of these provisions may have a disparate negative impact on small residential landlords. It should be remembered that the act does not exempt the rental property itself from eviction or tax lien sales if it is not the primary home of the landlord.

Despite the legislation, rent, taxes, and mortgage payments are not canceled despite the legislation, rent, taxes, and mortgage payments. This can render the possibility that the backlog of accrued liabilities can be insurmountable when payable, perhaps leading to bankruptcy. Furthermore, the small landlord remains vulnerable, especially because they are susceptible to enforcement against the real property. 

For more information on evictions, contact Undisputed Legal our Eviction Services department at (800) 774-6922. Representatives are available Monday-Friday 8 am – 8 pm EST.  If you found this article helpful, please consider donating.  Thank you for following our blog, A space dedicated to bringing you news on breaking legal developments, interesting articles for law professionals, and educational material for all. We hope that you enjoy your time on our blog and revisit us! We also invite you to check out Exceptions To The Eviction Moratorium

Sources

1. Governor Cuomo COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 (L.2020, c. 381; Act)

2. Governor Cuomo Announces Moratorium on COVID-Related Residential Evictions Will Be Extended Until January 1, 2021, https://www.governor.ny.gov/news/governor-cuomo-announces-moratorium-covid-related-residential-evictions-will-be-extended-until (last visited Jan 8, 2021) 

3. Governor Cuomo Signs the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 Governor Andrew M. Cuomo, https://www.governor.ny.gov/news/governor-cuomo-signs-covid-19-emergency-eviction-and-foreclosure-prevention-act-2020 (last visited Jan 8, 2021)

4. Answering Petitions New York City Civil Court, (http://www.nycourts.gov/courts/nyc/civil/corona/evictions.shtml (last visited Jan 9, 2021)

5. Act, Part A, §2

6. Act, Part A, §§9, 9[5]

7. Act, Part B, Subpart A §§1, 3

8. This is also relevant to authorize the enforcement of eviction under a default judgment

9. Act, Part A, §7

10. As of December 28, 2020

11. Act, Part A, §8[a][i]

12. Act, Part A, §9[2]

13. Act, Part B, Subpart A §§2, 7

14. Act, Part B, Subpart A §8 

15. Senior Citizens’ Homeowners Exemption

16. Disabled Homeowner’s Exemption

 

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