On July 6, 2020, Governor Andrew Cuomo signed Executive Order 202.48.  This Order ended the directives contained in Executive Order 202.28 regarding prohibition on residential eviction and foreclosure proceedings.  Executive Order 202.48, however, did not affect the protections for commercial tenants and commercial mortgagors which were put into place under Executive Order 202.28.  Thus, the moratorium on commencing a commercial eviction or commercial foreclosure proceeding against tenants/mortgagors who are eligible for unemployment insurance or benefits under federal or state law or otherwise facing financial hardship due to COVID-19 remains in place until August 20, 2020.

As to residential eviction proceedings, a landlord may commence an action for non-payment against a tenant, whether the tenant is experiencing a COVID-19 financial hardship or otherwise.  Tenants experiencing a COVID-19 financial hardship, however, can now raise such financial hardship as an affirmative defense in the eviction proceeding under the protections of the Tenant Safe Harbor Act (the “Act”).  The Act was signed into law by Governor Andrew Cuomo on June 30, 2020 and it provides that, “No court shall issue a warrant of eviction or judgment of possession against a residential tenant or other lawful occupant that has suffered a financial hardship during the COVID-19 covered period for the non-payment of rent that accrues or becomes due during the COVID-19 covered period.”  The Act goes on to define the “COVID-19 covered period” as commencing March 7, 2020 and ending on the “the date on which none of the provisions that closed or otherwise restricted public or private businesses or places of public accommodation, or required postponement or cancellation of all non-essential gatherings of individuals of any size for any reason in Executive Orders 202.3, 202.4, 202.5, 202.6, 202.7, 202.8, 202.10, 7 202.11, 202.13 or 202.14, as extended by Executive Orders 202.28 and 202.31 and as further extended by any future Executive Order, issued in response to the COVID-19 pandemic continue to apply in the county of the tenant’s or lawful occupant’s residence.”  In the context of the NYForward reopening guide, the end of the COVID-19 covered period described in the Act equates to the time in which a County enters Phase 4 in the reopening of the economy.

In determining whether a tenant has experienced a COVID-19 financial hardship, the Act provides for several factors which shall be considered by the court, e.g. the tenant’s lawful income prior to COVID-19 versus the tenant’s lawful income during the COVID-19 covered period, the tenant’s liquid assets, and their eligibility to receive cash assistance, disability and/or unemployment benefits from New York State.  If the tenant successfully illustrates the COVID-19 financial hardship, the landlord cannot obtain a warrant of eviction or judgment of possession.  Such landlord, however, if successful in their petition, can obtain a money judgment against the tenant.

As to residential foreclosure proceedings, Governor Andrew Cuomo signed a new law into effect on June 17, 2020 which offers permanent protections for certain residential mortgagors facing COVID-19 financial hardship during the COVID-19 covered period as defined above.  The law does not apply to all mortgage loans; for instance, it does not affect mortgage loans made by any agency or instrumentality of the United States or any government sponsored enterprise, such as FHA loans.  For those qualifying mortgagors, the law requires the lender to offer different forbearance options to the mortgagor for mortgage payments missed during the COVID-19 covered period for up to a period of 180-days with an option to extend for an additional 180-days.  For example, the mortgagor can chose to extend the term of the loan for the period of forbearance and tack on the miss payments to the end of the loan; they can chose “to have the arrears accumulated during the forbearance period payable on a monthly basis for the remaining term of the loan without being subject to penalties or late fees incurred as a result of the forbearance,” or they can defer the missed payment(s) as a non-interest balloon payment payable at the maturity of the loan.  The lender must illustrate that it adhered to the provisions of this law and made these different forbearance options available to the mortgagor before the lender can commence a foreclosure action arising from missed payments during the COVID-19 covered period.  A mortgagor may raise the lender’s failure to comply with this new law as a defense to the foreclosure action.