Executive Order 202.28: Landlord / Tenant Issues

Dear Clients,

As the novel coronavirus (COVID-19) pandemic has developed, so too have the related challenges and the responses to those challenges evolved. Rosenberg & Estis P.C. continues to monitor guidance and directives that impact your business operations. This memo will update you with respect to some issues of significant concern. As always, we are available to discuss any matters and to provide advice to you.

EXECUTIVE ORDER 202.28

On May 7, 2020, Governor Cuomo issued Executive Order 202.28, which contains substantive provisions with respect to your management of residential and commercial tenants. Please note the following:

Provisions Related to All Tenants

  • Landlords are prohibited from initiating proceedings for the non-payment of rent against both residential and commercial tenants who are "eligible for unemployment insurance benefits under state or federal law or otherwise facing financial hardship due to the COVID-19 pandemic" through August 20, 2020. In addition, the moratorium extends to enforcement of evictions of both residential and commercial tenants for non-payment of rent, as well as foreclosure of any residential or commercial mortgage, to the extent that tenant or property owner is "eligible for unemployment insurance benefits under state or federal law or otherwise facing financial hardship due to the COVID-19 pandemic." The Executive Order does not define "otherwise facing financial hardship," and the interpretation of that catch-all will likely be interpreted by the Courts. In addition, the Executive Order appears to permit commencement of holdover proceedings (as long as they are not predicated on a failure to pay rent), once the courts begin to accept new filings. The Executive Order appears to permit the execution of warrants which were previously issued in holdover proceedings, however, the City Marshals are overseen by the New York City Department of Investigation, which has not yet provided guidance as to whether such evictions may proceed.

Provisions Related Only to Residential Tenancies

  • Landlords may not demand, charge or collect any payment, fee or charge for late payment of rent for the period from March 20, 2020 through August 20, 2020.
  • At the request of a tenant or licensee, and subject to a written agreement, landlords may apply a security deposit and any accrued interest to pay rent in arrears or rent that will become due. Landlords must comply with such a request from a tenant who is eligible for unemployment insurance or benefits under state or federal law or is otherwise facing financial hardship due to the COVID-19 pandemic. Any such agreement may be executed in counterpart by email.
  • If a landlord applies a security deposit at the request of a tenant or licensee, the security deposit must be replenished in equal installments over a 12-month period, beginning no later than 90 days from the date of the application of the security deposit to rent.
  • In lieu of replenishing the security deposit, a tenant or licensee may, at its sole option, obtain insurance that provides relief for landlords in lieu of the monthly security deposits, and landlords are obligated to accept such insurance.

COURT OPERATIONS

Although new filings are still not being accepted, the Courts are beginning to resume more normal operations at all levels.

Appeals:

Both the First and Second Departments have resumed hearing cases and accepting filings on pending appeals.

In the First Department:

  • Previously filed appeals are being heard in two special terms - from May 4 through May 29, 2020 and from June 1 through June 26, 2020. All appeals will be taken on submission or orally argued via Skype;
  • If an appeal was previously calendared for the June term, responding briefs must be filed on May 8, 2020 and reply briefs on or before May 18, 2020;
  • The deadlines for appeals for the September through December, 2020 terms of the Court are reinstated;
  • The deadline for submission of motion papers that were due between March 16 and May 4, 2020 is May 22, 2020.

In the Second Department:

  • Any papers, including briefs, records, appendices and responsive papers which were due to be filed between March 16 and March 31, 2020 must be filed on or before June 5, 2020;
  • Any papers, including briefs, records, appendices and responsive papers which were due to be filed between April 1 and April 15, 2020 must be filed on or before June 19, 2020;
  • Any papers, including briefs, records, appendices and responsive papers which were due to be filed between April 16 and May 6, 2020 must be filed on or before July 6, 2020.
  • Appeals for which no deadlines were previously established remain subject to the Court's prior suspension order.

Supreme Court:

  • Restrictions on the electronic filing system have been lifted, and papers with respect to previously filed motions may be electronically filed so that motions can be submitted;
  • New motions may be filed electronically;
  • Judges are conducting telephonic and Skype conferences, and the Court has implemented a process by which parties may request such conferences.

Housing Court:

  • The Housing Court has, for the first time, developed an electronic system for filing of motion papers in cases where both attorneys are represented by counsel. Motion papers both on previously filed motions and new motions may be filed, but only on consent of both parties. Papers must be submitted electronically and will be transmitted to the Administrative Judge in each county for review and assignment.
  • No new proceedings may be commenced until further notice, and there is no projection as to when the Housing Court will allow new cases to be commenced. However, the Court is beginning to conference cases that were scheduled for trial prior to the closure, and individual Judges will conduct settlement conferences on pending cases, at the request of the parties.

CARES ACT

While banks have begun to administer Paycheck Protection Plan loans, the Small Business Administration and the Treasury Department have also promulgated rules and regulations that may modify some of the initial underlying assumptions with respect to forgiveness and tax treatment. If you applied for and received a PPP loan, you may want to speak to your accountant or banker to ascertain whether the rules impact your PPP loan.

We are continuing to monitor this ever-changing and fluid situation and will update you as warranted. Please reach out to the undersigned if you have any questions or if we can assist you in any way.


Luise A. Barrack, Deborah E. Riegel and Jason R. Davidson