LATEST COVID-19 DEVELOPMENTS: NEW LAWS REGARDING EVICTIONS AND FORECLOSURES; PPP PROGRAM EXTENDED; Q&A ON REOPENING ISSUES
NEW LAWS REGARDING EVICTIONS AND FORECLOSURES;
PPP PROGRAM EXTENDED;
Q&A ON REOPENING ISSUES
MORATORIUM ON RESIDENTIAL NON-PAYMENT EVICTIONS EXTENDED INDEFINITELY. Last night Governor Cuomo signed the “Tenant Safe Harbor Act”, which bans issuance of a warrant of eviction against a residential tenant or other lawful occupant who has suffered a “financial hardship” during the “COVID-19 Covered Period” for rent that accrues or comes due during the COVID-19 Covered Period.
The “COVID-19 Covered Period” began on March 7, 2020 and ends when the Governor’s Executive Orders 202.3-8 and 202.10-14 cease to apply. Right now those Orders remain effective “until and unless later amended or extended by a future Executive Order,” i.e., until further notice.
In determining “Financial Hardship,” the court may take into account (a) income before and after March 7th; (b) other liquid assets; and (c) eligibility for other types of assistance. So if the tenant owed money before March 7th, the Safe Harbor Act will not assist them. For the text of the Tenant Safe Harbor Act, click here.
The moratorium on evictions for other reasons ends on August 9th. Despite the moratorium, under current Court Procedures, landlords are able to initiate proceedings, but have to suspend them if the tenant does not respond.
MORATORIUM ON CERTAIN RESIDENTIAL MORTGAGE FORECLOSURES BY BANKS EXTENDED INDEFINITELY. Banks are now required to grant mortgage forbearance to homeowners (including co-op shareholders) who apply for “loss mitigation” and demonstrate “financial hardship.” The homeowner can seek 6 months forbearance, with the option to obtain an additional 6 months of forbearance. The mortgagor has various options for repayment of the arrears. Exception – The guaranteed forbearance does not apply to mortgages insured by any government-sponsored enterprise (like FNMA, Freddie Mac, FHA, VA, etc.). Those agencies have their own forbearance procedures and requirements in place.
PAYROLL PROTECTION PROGRAM EXTENDED. The PPP was stalled in Congress until June 30th with approximately $115 billion still unexpended. On June 30th Congress passed an extension to make the additional funds available to businesses. Prior extensions had sought to direct funds to smaller vs. larger businesses, and to encourage audits of loans in larger amounts. These changes extend the repayment period, lower the amount needed to be spent on payroll to qualify for forgiveness, extend the loan term, and the like. For the SBA’s summary of the new provisions, click here.
Q&A ON REOPENING ISSUES. Unsurprisingly, associations have raised many new questions as buildings reopen to residents and visitors. Below we have listed some common questions and our recommendations.
Do we have to create a Reopening Plan? Yes. NYS Guidance requires “each business or entity” to develop a Reopening Plan. (For NYS Guidance on Reopening, click here.) You do not have to file it with New York State, but you must keep it on site and available for inspection by the Department of Health. If you need a template for developing a Reopening Plan, NYS has created one. [For the template, click here.] “Real Estate Activities” are subject to further guidance to protect employers and employees. For NYS Guidance for “Real Estate Activities”, click here.
How do we enforce Mask Requirements and other Restrictions? You should adopt House Rules setting forth your requirements for use of common facilities within the building, and guidelines for entry by visitors, vendors, contractors and brokers into the building. The House Rules should be circulated to all owners to become effective. Owners will be liable for violations of the House Rules by their invitees. The House Rules may be enforced in the same way as other rules and regulations are enforced at your building. If you have a fine schedule in place, add to that schedule. If you can only send notices of default, make the costs of such notices clear to owners ahead of time. We will provide model House Rules for individual buildings to adapt upon request.
How do we monitor visitors in a non-doorman building? Safety restrictions are clearly harder to enforce in a non-doorman building. We suggest the following: First, put up a sign in the lobby and other prominent common areas (elevators, laundry room) specifying your Rules. To supplement, you might install a visible security camera in the lobby with recording capabilities; or put out a box with a Visitor Questionnaire in the box. State that all visitors must sign the Questionnaire. The Questionnaire could be as basic as asking whether the visitor has been sick within the past 14 days or interacted with someone who is sick, or more detailed. Have a box where questionnaires can be placed. As for vendors and contractors, provide your superintendent with agreements to be signed before you allow entry into the building. We can provide sample forms on request.
How do we handle Open Houses and other brokerage issues? We recommend prohibiting Open Houses for now to avoid problems with maintaining social distancing and having unauthorized visitors wandering through the building. Brokers should sign entry agreements similar to other vendors, providing that they and their clients will comply with all building requirements relating to screening and personal protective equipment; they will escort clients to and from the apartment; they will schedule visits through the superintendent 24 hours in advance; and they will not go to other common facilities in the building without specific permission. We can provide sample forms on request.
We’re all well into Phase 2 now and hoping to keep momentum going into Phase 3. Have a great holiday and stay healthy.
For more information, contact:
Domenick J. Tammaro