The COVID-19 pandemic (COVID-19) has left many New Yorkers in financial trouble as they face an increase in unemployment due to COVID-19-related business closings and the resulting difficulty in paying housing costs including rent and Have to deal with mortgage payments. Starting with the outbreak of the pandemic, the New York State government proposed several protection orders to minimize the financial burden on New York renters, homeowners, and small landlords, and to temporarily allow New Yorkers affected by COVID-19 the ability to stay in their homes . Accordingly, New York Governor Andrew Cuomo issued a comprehensive moratorium on emergency clearing and mortgage foreclosure to protect renters and homeowners who would otherwise be at risk due to their inability to pay rent or mortgage payments, losing their homes. These executive ordinances temporarily prohibited the filing of eviction proceedings and suspended the enforcement of mortgage foreclosures for residential and commercial mortgages.
In March 2020, in connection with the declaration of COVID-19 as a public health emergency, Governor Cuomo enacted a nationwide moratorium to halt both residential and commercial property tenants evictions and mortgage foreclosures, which will expire on April 13. June 2020 was in force. This first piece of legislation was then followed on June 30, 2020 by the Tenant Safe Harbor Act, which, among other things, banned the evacuation of residential buildings for tenants suffering financial difficulties due to COVID-19 and, under certain circumstances, allowed monetary judgments for non-payment of rent Circumstances. As the pandemic continued to plague the nation, the Tenant Safe Harbor Act was extended and expanded through January 1, 2021 to provide additional evacuation protection for tenants in residential areas. The Executive Orders also provided financial assistance to certain tenants and landlords and prohibited landlords from charging fees or other penalties for late rental payments.
Click here for the full list of New York State Emergency Evacuation and Foreclosure Guidelines.
The 2020 COVID-19 Emergency and Foreclosure and Prevention Act
In response to the ongoing crisis, Governor Cuomo signed the COVID-19 Eviction and Prevention of Foreclosures Act of 20201 (the Act) on December 28, 2020. The law continues to suspend residential evictions and mortgage foreclosures until May 1, 2021, provided that a tenant or homeowner provides their landlord or lender with a “hardship” (as defined below) explaining their financial difficulties. The law also provides protection against credit discrimination and negative credit reports, and extends homeowner exemption for seniors and homeowner exemption for the disabled until 2021. The law focuses on the following areas:
If youThe law prohibits evacuation of new residential buildings and the completion of upcoming residential evictions by May 1, 2021 for tenants who have suffered difficulties related to COVID-19. In order to prevent eviction, tenants must present their landlord with a document with a "hardship declaration" in which the cause of the financial hardship is explained. Landlords are also obliged to provide tenants with a sample of the hardship declaration when they submit rental applications or send other communications in the context of their rental agreements in order to inform the tenant about the possibility of asserting hardship cases. The hardship statement includes options for tenants to indicate whether they have experienced a significant loss in household income or an increase in expenses due to COVID-19. whether childcare activities or the need to care for an elderly, sick, or disabled family member have significantly affected household income or increased necessary expenses; or whether other circumstances related to COVID-19 have adversely affected the tenant's ability to maintain meaningful employment, among other things. If a tenant submits a hardship declaration for a pending eviction procedure in which an eviction order has not yet been issued, including an eviction procedure filed on or before March 7, 2020, this procedure will be suspended until at least May 1, 2021. According to the law, the landlords reserve the right to do so Right to evict tenants (i) who violate the use and enjoyment of other tenants or cause significant security risks and (ii) do not make any hardship statements.
The law also temporarily suspends foreclosure proceedings for residential mortgages until May 1, 2021. Homeowners and small landlords who own fewer than 10 units can file similar hardship statements with their mortgage lender, other foreclosure party, or the competent court to qualify for the benefit of the Mortgage Foreclosure Moratorium on financial difficulties related to COVID-19 .
The law also prevents local governments from issuing tax liens or foreclosures on residential real estate (including shares in a housing cooperative) until at least May 1, 2021. However, tax payments at the local and municipal levels are still due and payable.
The law expressly forbids credit institutions from discriminating against a property owner seeking credit because the property owner has been granted a suspension of mortgage enforcement proceedings, tax enforcement proceedings or a tax lien, and also prohibits mortgage lenders from reporting such actions negatively to a credit reporting office. In addition, institutions are prohibited from discriminating against a property owner because the owner is currently in arrears and has filed a hardship statement with the lender.
The law stipulates that by May 1, 2021, local governments must transfer exemptions from SCHE and DHE for people aged 65 and over, as well as for certain people with disabilities and limited incomes, from the 2020 evaluation list to the 2021 evaluation list at the same level.The requirement provides for extension requests for people who may be eligible for a major exemption in 2021. In addition, local governments have the option to establish procedures whereby auditors can request renewal requests from beneficiaries who the auditors believe may no longer be eligible for an exemption in 2021 due to a change in their primary residence, the addition of a different owner Title deed, transfer of ownership to a new owner, etc. The beneficiaries of the exemption do not need to submit renewal requests in person.
Please click here to access the full text of the law.
CONCLUSION
In a nutshell, the new legislation will help prevent a surge in rental evictions and residential foreclosures, which will further deteriorate New York’s economy and reduce the difficulties of dealing with the COVID-19 public health crisis housing law perspective could increase. However, opponents of the law, including the Rent Stabilization Association, New York's largest landlord association, have raised concerns that a blanket eviction ban with no demonstrable proof of economic hardship could cause working tenants to stop paying rent, which could lead to an increase in bankruptcies and potentially damage New York’s affordable housing infrastructure. Opponents also believe that the eviction moratorium is being used to simply "throw the can in the street" 2 and provide a temporary solution to the larger problem of inappropriately high housing costs in New York. From a lending perspective, the temporary eviction ban can affect the ability of landlords and owners to meet their debt service requirements as tenants forego rental payments. The ultimate effects of this chain of events can contribute to the further collapse of an already unstable commercial real estate market.
1 New York Senate Bill S.9114 / A.11181
2 Jacklyn Diaz, New York, approves eviction moratorium through May, NPR (December 29, 2020).