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Perspectives

New York Extends Moratorium on Residential Evictions

To help protect residential tenants from the economic effects of the coronavirus pandemic, New York State has enacted the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020. This legislation was signed into law on December 28, 2020 and took effect immediately.

The Act places a moratorium on residential evictions until May 1, 2021 for tenants who have experienced financial hardship as a result of the pandemic. Tenants may assert that they have experienced such hardship by submitting a hardship declaration or documentation explaining the source of the hardship. Unlike prior eviction moratoriums, the law contains a carve-out allowing eviction proceedings where the landlord is seeking to evict a tenant who is creating safety or health hazards for other tenants.

Significantly, while a moratorium on eviction proceedings remains in effect, neither the new law nor any of the prior legislation and executive orders affects a tenant’s liability to pay the rent. Tenants still owe the full amount of their rent and, in the absence of further legislation, landlords may seek to enforce this liability in eviction proceedings once the moratorium ends.

In addition, the Act also places a moratorium on certain residential foreclosure proceedings until May 1, 2021. This aspect of the legislation protects homeowners and small landlords, but only those owning 10 or fewer residential dwelling units. Eligible borrowers must file a hardship declaration with their mortgage lender or other foreclosing party, or with the court, to stop the foreclosure proceedings from going forward. Again, the legislation does not affect a borrower’s ultimate liability to pay all amounts due – only the timing of enforcement proceedings has been delayed in the event of non-payment. Finally, the new law also prevents local governments from engaging in certain tax lien sales or tax foreclosures until May 1, 2021.

The interplay of various laws, executive orders, and court administrative directives on eviction and foreclosure proceedings is complex and anyone affected by these issues should consult with counsel.