New York State Extends Prohibition on Residential Evictions & Foreclosures; Provides Relief for Certain Small Landlords

On December 28, 2020, as anticipated in our last post, New York State took further action regarding residential evictions.  The COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 (the Act) extended to May 1, 2021 protections against evicting many residential tenants.  The Act also prevents many residential foreclosures until May 1st.

The Act prohibits residential evictions until May 1st for tenants suffering COVID-related hardship.  A tenant seeking protection under the Act must submit a hardship declaration, or a document explaining the source of the hardship, using language specified in the Act .   Landlords may still evict tenants for non-rent violations if those violations are creating safety or health hazards for other tenants, as well as tenants who do not submit hardship declarations.  Landlords making written demands for rent, providing 14-Day notices, terminations for good cause or any other notice which is legally required, must include with such notice a hardship declaration.  Landlords are barred from starting an eviction for non-payment against any tenants submitting such declarations.  Pending evictions are also stayed until May 1st, if the tenant files a declaration with the court.  Sheriffs may not enforce eviction warrants, without further court action, if a tenant provides the Sheriff with such a declaration.

The Act also prohibits residential foreclosures until May 1st.  Homeowners and small landlords owning 10 or fewer residential dwellings can file similar hardship declarations with their mortgage lender, other foreclosing party or a court to prevent foreclosure.

Submitting a declaration creates a rebuttable legal presumption that the tenant, homeowner or small landlord is suffering from COVID-related hardship, thus, triggering the Act’s protection against eviction or foreclosure.  It appears that simply submitting or filing a declaration bars a landlord or lender from starting a new, or stays a pending, eviction or foreclosure unless the landlord or lender first obtains a court order authorizing the specific eviction or foreclosure.

Additionally, the Act prohibits credit discrimination and negative credit reporting related to the COVID-19 pandemic.  It extends the Senior Citizens' Homeowner Exemption and Disabled Homeowner Exemption from 2020 to 2021.  Finally, the Act prevents local governments from conducting tax lien sales or tax foreclosures until at least May 1st.

The Act does not forgive rent, mortgage or any payments due to local governments, which must still be made.  Despite this continuing obligation, we are receiving anecdotal evidence from numerous sources that rental, mortgage, tax and fee delinquencies are rising, despite enhanced unemployment benefits and other supports.  This is a growing problem that will likely result in significant budgetary, economic and policy implications in the new year.

This post is intended to be used for informational purposes only.  Legal advice is neither implied by the author nor should be inferred by the reader.  If you have specific legal questions, you should consult with your attorney.

Jeffrey Sculley is an attorney and counselor at law focusing his practice on representing landlords; providing backroom human resource and employment support to businesses and not-for-profits; representing clients in appealing adverse trial-court and administrative decisions; preparing trademark applications; and representing clients in all types of administrative, regulatory and compliance matters, before governmental agencies and administrative hearing officers and law judges.