UPDATE TO THE NEW YORK EVICTION MORATORIUM

On May 5^th, 2021, U.S. District Judge Dabney L. Friedrich of Columbia District rejected the moratorium imposed by the federal government. The ruling strongly asserted that the CDC had no jurisdiction to impose a nationwide moratorium under the Public Health Service Act and the court proceeded to strick down the federal eviction moratorium. However, this move does not impact New York’s latest extension until August 31^st. The federal moratorium was originally imposed last year and extended via the Centre of Disease Control and Prevention by the U.S. Department of Health and Human Services. It was extended again until June 30^th  by President Joe Biden.

WHAT IS THE NYC EXTENSION

On December 28^th, 2020, Governor Cuomo signed into law the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020.  The Act was extended through August 31^st, 2021, and continues to provide relief to respondents and defendants in residential eviction proceedings and foreclosure actions in New York State.  Majorly, the legislation provides relief to individuals, allowing for individuals to avail themselves of the benefits by [A.] publishing a form ‘Hardship Declarations’ to be used by tenant-respondents in eviction matters and defendant-mortgagors in residential foreclosure actions in reporting financial hardship during or due to the COVID-19 pandemic and [B.] Staying residential eviction proceedings and residential real property mortgage foreclosure actions until at least August 31, 2021, in Proceedings and Actions where a tenant-respondent or defendant-mortgagor submits a completed Hardship Declaration. For the mortgagor, the declaration of hardship would have to include that they are unable to pay my mortgage in full because of  [A.] significant loss of household income during the COVID-19 pandemic, [B.] increase in necessary out-of-pocket expenses related to performing essential work or related to health impacts during the COVID-19 pandemic, [C.] childcare responsibilities or responsibilities to care for an elderly, disabled, or sick family member during the  COVID-19  pandemic, which negatively affected their ability to obtain meaningful employment or earn income or increased necessary out-of-pocket expenses.

TIMELINE FOR AVAILING PROTECTION IN NEW YORK

New York State has instituted a moratorium on eviction proceedings in the last year. New York state law provides renters with protection from eviction only if they file a hardship form to the state. This state law expires at the end of August. Even if renters who seek rental assistance do not hear back from the state before the legislation expires, they are protected from eviction nonetheless. Prior to August 31, 2021, no court can issue a default judgment authorizing an eviction in a residential eviction matter, or authorize the enforcement of eviction pursuant to a default judgment, without first holding a hearing upon motion of the petitioner. Furthermore, 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, the warrant will stay until the court has held a status conference with the parties. 

HOW DOES THE EMERGENCY PROTECTION OF OUR SMALL BUSINESS ACT OF 2021 WORK

On 9^th March 2021, the CoVID-19 Emergency Protection of Our Small Business Act of 2021 was adopted by Governor Cuomo. The legislation provides that viable actions should come under covered commercial foreclosure actions, specifically for commercial eviction and commercial real property mortgage foreclosure actions if they are to qualify for the relief of evictions being suspended for at least sixty days if submitted within thirty days of March 9^th, 2021. It is required to provide that the ‘Hardship Declaration’ form in the cases of Covered Commercial Eviction Procedures (CCC) and in covered commercial foreclosure actions. The requirement to Stay (or delay) of said required Commercial Eviction Proceedings and Covered Commercial Foreclosure Actions until the minimum date of August 31^st, 2021 comes when a Hardship Declaration is duly submitted to the landlord or mortgagee, or the Court. Commercial foreclosure measures need to fall under ’Covered Commercial Foreclosure Actions,’  and are applicable to the mortgage holder of ten or fewer commercial units. It is immaterial whether the mortgage holder holds these units directly or indirectly. Further, a New York-based business that aims to avail themselves of the relief needs to be owned and controlled autonomously, not dominating in the field it operates in and must employ fifty or fewer people. Similarly, ‘Covered Commercial Eviction  Proceedings’ are evictions involving a commercial tenant residing in the New York State, who is owned and operated independently, employs fifty or even fewer people, and is not ‘dominant in their industry. The Act does not cover vacant and abandoned property that was first listed on the statewide vacant and abandoned property electronic registry before March 7, 2020.

AVAILABLE ASSISTANCE TO RENTERS AND LANDLORDS

The state created a two billion dollar reserve to assist low-income residents with up to twelve months of overdue rent and energy payments. New Yorkers who spend 30% or more of their yearly salary on rent qualify for additional rental assistance, which is typically given for three months.  Individual tenants who earn  80% of local median income or less qualify as low-income renters. The landlord does not collect late fees if a rent payment is received after the rent deadline. Furthermore, landlords may not raise the rent or evict tenants under most circumstances. The state budget was approved on April 7^th, and the new fund was established within it. However, neither applications for renters nor landlords to fill out the new guidelines were set until June 1^st.  Increases in rental assistance stalled because of documentation requirements that had been increased by the state. The state has issued its intention to review cases between four and six weeks after submitting an application. Furthermore, Home Energy Assistance Program applications may be submitted by New Yorkers seeking financial assistance paying their energy bill prior to August 31^st.

PROVISIONS OF THE ACT EXPLAINED

The extension of the COVID-19 Emergency Prevention Act and the CoVID-19 Emergency Protect Our Small Business Act of 2020 was signed by Governor Andrew M. Cuomo. The law extends the protection for residential and business evictions, foreclosure, credit discrimination, and COVID-19 negative credit coverage until 31^st August 2021. The law contributes to New York State’s attempts to safeguard renters and house owners of public meetings and companies from the economic difficulties caused by the COVID-19 pandemic in the pivotal juncture regarding the spread of the virus The previously enacted legislation helps both residential and commercial tenants facing eviction and mortgagors facing foreclosure proceedings due to the pandemic, regarding [A.] Residential Evictions, [B.] Residential Foreclosure Proceedings, [C.] Commercial Evictions, [D.] Commercial Foreclosure Proceedings, [E.] Tax Lien Sales, [F.] Credit Discrimination and Negative Credit Reporting and [G.] Senior Citizens’ Homeowner Exemption and Disabled Homeowner Exemption. The law puts a moratorium on residential evictions for renters who have suffered from COVID-related distress until 31 August 2021. In order to avoid evictions, tenants must file a hardship statement or paperwork detailing the cause of the difficulty. Landlords may expel renters who create safety or health concerns for other tenants or tenants who neglect to submit hardship declarations. The law also lays down an embargo against residential foreclosure until 31^st August 2021. Homeowners and small property owners with ten homes (or fewer) may make a  statement declaring hardship with the mortgage lender, another foreclosing party, or a court that precludes said foreclosure. These residential foreclosure proceedings have stayed for sixty days for implementation purposes; and further permits mortgagors who own ten or fewer residential dwellings – inclusive of their primary residence– who are suffering financial hardship to file a hardship declaration with their mortgage lender, other foreclosing parties, or the court that will prevent the filing of a foreclosure action or stay any foreclosure action in progress at the time of filing until May 1^st, 2021.  Expulsions for commercial tenants until 31^st August 2021 who have sustained a COVID-related hardship are also subject to the moratorium. The law applies to small enterprises with less than fifty workers who are currently experiencing financial difficulties. In order to avoid evictions, tenants must provide a hardship statement or a document stating the cause of the difficulty. The legislation places a moratorium on commercial foreclosure proceedings until August 31, 2021. The legislation also prevents local governments from engaging in a tax lien sale or a tax foreclosure until at least August 31^st, 2021. Additionally, lending institutions are prohibited to discriminate against property owners seeking credit, since a delay in the mortgage foreclosures, tax foreclosures, or tax lien sales is authorized for the property owner. They are also forbidden from discriminating against individuals because the owner is in arrears and has filed a hardship declaration with the lender. Local governments must apply Senior Citizens’ Homeowner Exemption and Disabled Homeowner Exemption from the 2020 assessment roll to the 2021 assessment roll at the same level. They also need to submit renewal applications for anybody qualified for a broader 2021 exemption. Locations may also establish processes by which appraisers may demand renovation applications from those who are considered by appraisers to be no longer qualified for an exemption in 2021. Exemption recipients do not require to submit renewal applications in person. Governor Cuomo declared on 20^th  March a State suspension on residential and market expulsions to guarantee that no renter was expelled in a high public health emergency. On 30^th June, the Governor approved the Tenant Safe Harbour Act and supplementary laws offering financial support for homeowners and property owners came into force immediately. Furthermore, prior Executive Orders have decried late rent penalties or fines, and renters who face financial difficulties may continue to utilize their security payment deposit and recoup their security deposit over time.

ISSUES WITH THE EXTENSION

For the state, the previous year’s tenant initiative struck a few snags. They ultimately handed the program over to the state’s Office of Temporary and Disability Assistance, which focused on providing funding to those who are temporarily and involuntarily unemployed. To qualify, renters who owe overdue rent should have their income being below 80% of the local median income. Several technical issues cropped up soon after the June 1^st deadline passed. The rules to deliver aid stipulates that applications may only be completed during an internet session, which is a challenging requirement since many other papers, such as the renter’s personal identity, are needed, as well as evidence of income, residence, and occupancy. Landlords must provide W-9 information, including their tax information, lease, rent roll, and banking details. Landlord and tenant activists argue that the uploading of papers has been aggravating because the process works one day and is less effective the next. Due to this early stage requirement, landlords were encumbered by having to set up email and different building accounts for each property they own. The master account restriction has thereinafter been lifted. Landlords have complained that in certain cases, they never get a confirmation that an application has been filed to the Rent Stabilization Association, a building owners organization. A few landlords worry that a large number of application rejections would be due to technological issues.  However, duplicate applications appear to be the primary reason for denials, since the technical difficulties will cause the process to not be completed in one sitting. On July 31^st, the moratorium on most evictions under the Biden administration will expire, having been extended by a month by the administration. With just the CDC/CDC-imposed embargo in effect, millions of renters see the moratorium as the only prevention against eviction.  Numerous tenants had fallen months behind on their rent during the coronavirus outbreak and lose their livelihoods.  The landlords’ lawsuit against the CDC order was successful, with their argument being landlord expenses to settle. The challenge also highlighted the prospect for renters to access the USD 45 billion in government funds that have been put aside to assist with rent and other relevant costs. Landlords in New York have incidentally brought about litigation related to eviction actions last summer. However, if they have lost income or their health would be worsened by relocating, renters are protected under the law depending on their submission of the Hardship Declaration. General practice is that if renters do not sign said Hardship Declaration, a landlord may proceed with the lawsuit as if no rules to the contrary were implemented. Eviction protections under the extensions see the general staying of residential eviction proceedings for sixty days for implementation purposes but also specifically permits residential tenants enduring a financial or health-related hardship to file a hardship declaration, under penalty of perjury, with their landlord or a court that will prevent the filing of any eviction nor stay any eviction proceeding in progress at the time of filing until May 1^st, 2021. However, the protections are not universal and further allow landlords to evict objectionable tenants and tenants who do not submit a declaration of hardship. 

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Simply pick up the phone and call Toll Free (800) 774-6922 or click the service you want to purchase. Our dedicated team of professionals is ready to assist you. We can handle all of your process service needs; no job is too small or too large! Contact us for more information about our process serving agency. We are ready to provide service of process to all of our clients globally from our offices in New York, Brooklyn, Queens, Long Island, Westchester, New Jersey, Connecticut, and Washington D.C “Quality is never an accident; it is always the result of high intention, sincere effort, intelligent direction, and skillful execution; it represents the wise choice of many alternatives” – Foster, William A Sources 1. ALABAMA ASSOCIATION OF REALTORS et al v. the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES et al, No. 1:2020cv03377 – Document 54 (D.D.C. 2021) 2. As part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Pub. L. No. 116-136, 134 Stat. 281 (2020), Congress enacted a 120-day eviction moratorium that applied to rental properties receiving federal assistance, id. § 4024(b).  After that moratorium expired, the U.S. Department of Health and Human Services (HHS), through the Centers for Disease Control and Prevention (CDC), issued an order implementing a broader eviction moratorium that applied to all rental properties nationwide, 85 Fed. Reg. 55,292 (Sept. 4, 2020), which prompted this suit.  Since then, Congress has granted a 30-day extension of the CDC Order, and the CDC has extended the order twice itself.  The current order is set to expire on June 30, 2021.   3. The Department of Justice intends to appeal and requested the court to retain the decision until the appeal procedure has expired. Speaker Jen Psaki, of the White House, said the administration of Biden is evaluating the decision. 4. L. 2020, c. 381; ‘Act 5. L. 2021, c. 104 6. 2021 (L. 2021, c. 73; ‘Act’) 7. ‘DSS COVID-19 Frequently Asked Questions.’ Cash Assistance – HRA, www1.nyc.gov/site/hra/help/dss-covid19-faqs.page.  8. ‘As we approach the light at the end of the COVID-19 tunnel, it is critical that we continue to protect both New York’s tenants and business owners who have suffered tremendous hardship throughout this entire pandemic,’ Governor Cuomo said. ’Extending this legislation will help to ensure that vulnerable New Yorkers and business owners who are facing eviction through no fault of their own are able to keep their homes and businesses as we continue on the road to recovery and begin to build back our economy better than it was before.’ 9. S.6362-A/A.7175-A 10. Payments due to the locality would still be due. 11. Contact the Governor’s Press Office phone: Albany: (518) 474-8418 New York City: (212) 681-4640  email: [email protected] 12. Dikanovic, Allison, and Josefa Velasquez. ‘Cuomo Rent Relief Expansion Still Strands Many in Need of Aid.’ THE CITY, THE CITY, 23 Dec. 2020, www.thecity.nyc/2020/12/22/22196601/new-york-rent-relief-expansion-still-strands-many.  13. Gutierrez, Melissa, and Christy W. Hancock. ‘Landlords Again Successfully Challenge the CDC’s Authority to Ban Residential Evictions.’ Lexology, 19 Apr. 2021, www.lexology.com/library/detail.aspx?g=b156edef-378c-421f-9b8b-e19784c195fd.