NY Executive Order Extending Moratorium
As a result of the ongoing COVID-19 health pandemic, Governor Andrew M. Cuomo issued Executive Order Number 202.28 on May 7, 2020. As per the terms of the Executive Order, the state’s eviction and foreclosure moratorium was extended sixty (60) days beginning on June 20, 2020 and will expire on August 20, 2020. During this time period, no eviction or foreclosure action may be initiated or resumed for nonpayment of rental or mortgage payments, by someone that is eligible for unemployment insurance or benefits under state or federal law or otherwise facing financial hardship due to COVID-19. In addition, the moratorium on evictions against those who have financial hardship because of COVID-19 will be delayed through August 20. This leaves the question open as to whether the Courts will process warrants for eviction to execute against tenants against whom a landlord had a judgment prior to the pandemic after the original June 20 moratorium deadline. Furthermore, from March 20, 2020 through August 20, 2020, no landlord can demand or be entitled to a late fee payment for a tenant’s late payment of his/her rent. Despite mounting pressure to do so, Governor Cuomo did not go as far as to cancel rent outright.
In addition, Landlords and tenants or licensees of residential properties may, upon the consent of the tenant, enter into a written agreement that allows for the use of a security deposit to pay rent that is in arrears or will become due. If the amount of the deposit represents less than a full month rent payment, the agreement does not constitute a waiver of the remaining rent due and owing for that month. Execution in counterpart by email will constitute sufficient execution for purposes of this limited agreement. Landlords shall provide such relief to tenants who so request it that are eligible for unemployment insurance or benefits under state or federal law or are otherwise facing financial hardship due to the COVID-19 pandemic.
It shall be at the tenant’s option to enter into such an agreement, and landlords shall not harass, threaten or engage in any harmful act to compel such agreement. Any security deposit used as a payment of rent must be replenished by the tenant, to be paid at the rate of 1/12 the amount used as rent per month. The payments to replenish the security deposit shall become due and owing no less than 90 days from the date of the usage of the security deposit as rent. The tenant may, at their sole option, retain insurance that provides relief for the landlord in lieu of the monthly security deposit replenishment, which the landlord, must accept such insurance as replenishment.
As a result of this extraordinary measure, landlords need to fully understand the duties they owe to their tenants while the Order is in effect and the protections offered to tenants to avoid any potential violations of the law. Governor Cuomo’s Executive Order provides tenants with tremendous protections and management needs to be fully aware of same and prepared to deal with them. Just like most directives from the government these days, these rules and procedures are subject to further changes. The eviction and foreclosure moratorium may be extended further if the State feels it is necessary. Accordingly, it is strongly recommended that you reach out to and work with tenants who are suffering from economic hardship due to COVID-19. Our office can assist in the negotiations and preparation of any agreement that provides for the use of security deposit and necessary replenishment of the tenant’s security deposit. In addition, management may want to re-evaluate standard renewal and early termination Lease provisions to determine if changes are needed to account for these unique times. Regardless of the approach management decides to implement, my office is here to assist. Do not hesitate to reach out to my office if you have any further questions regarding the implications of Governor Cuomo’s Executive Order or would like to further discuss options available to deal with these unprecedented times.
The information in this Client Alert is provided solely for information purposes. It should not be construed as legal advice on any specific matter and is not intended to create an attorney-client relationship. The information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based upon particular circumstances. Each legal matter is unique, and prior results do not guarantee a similar outcome.
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