VIDEO: COVID-19's Effect on Landowners, Renters, and Lenders
April 1, 2020 | Speakers: Daniel Hahn
Across the State and across the country, there are no institutions spared uncertainty in the era of COVID-19. Remote work, social distancing, and rapid, regionally varied legal responses have flipped the well tread landscape of our day-to-day lives into something foreign, something stressful, and something potentially frightening. These developments have hit home no harder than at the home itself—for landlords, for tenants, and for landlords.
Although so much is changing almost daily across the State of New York, here are the facts as they stand now and how it affects you as a landowner, renter, or lender.
As of today, March 30, 2020—S.B. 8125 is in committee. As written, it would take effect immediately upon passing. As written, this bill would restart the 90-day clock initiated by the Executive Order 202.
The summary of this bill reads that it: “suspends all rent payments for certain residential tenants and small business commercial tenants if such tenant has lost employment or was forced to close their place of business and certain mortgage payments for landlords of such tenants in the state for ninety days following the effective date of this act in response to the outbreak of coronavirus disease.”
Later in the same document, the proposed bill states the purpose is to: “waive small business commercial and residential rent for 90 days for tenants that have lost income or been forced to close their place of business as a result of government ordered restrictions in response to COVID-19, and waive certain mortgage payments for 90 days for mortgagors who experience financial hardship due to COVID-19.”
Certain mortgage payments are defined in Section 1(b)(i) which details the formula for determination of forgiveness. It is involved so be sure to visit the site for a full review of said formula or to seek the assistance of legal professionals in its interpretation.
So, with the facts laid out, the short of it is this: currently, eviction proceedings cannot be brought against tenants in New York State until June 20th, 2020. Rent is not forgiven, only suspended. Lenders, by executive order, are required, not just urged but required, to allow for forbearance of payments for a mortgage for a person or entity facing financial hardship due to COVID-19. Additionally, bear in mind that many regional Judges have issued County wide prohibitions further defining what has been, and has not been, deemed a suspended court proceeding. You are therefore advised to seek advice by your counsel regarding what is and is not prohibited in your specific county as it may be broader than foreclosures and evictions.
Looking forward, this situation is evolving rapidly with developments every day. Were I to engage in speculation, it would be that landlords approach lease language, their own lease language, with skepticism as different judges may enforce, or not enforce, penal terms such as late fees, defaults, or the like with undetermined variance. Should S.B. 8125 pass, it would dramatically change the landscape for tenant and landlord alike, most notably shifting the verbiage used regarding rent payments from suspension (as it stands in Executive Order) to waiver. Note that the same holds true for mortgage payments as presently, the Executive Order allows for forbearance while the proposed legislation, again, calls for waiver. In all, a reasonable course of action is to stay in close communication with your lenders, your landlords, your tenants, or your debtors (depending on how you personally arraign in the situation) as cooperation between the parties is sure to be critical in navigating the days to come. Though perhaps more prudent still—would be to keep in touch with your attorneys as where cooperation may break down, the law will not.
My name has been, again Daniel Hahn, Attorney at Law from Pullano and Farrow PLLC in downtown Rochester, thank you all for your time, and stay well.