New York's Governor Extends COVID Protections
For New York landlords (and their many cash-strapped tenants), it looks like the existing rent-collection stalemate will be continuing for a bit longer.
On January 8, 2021, Governor Andrew Cuomo announced a legislative proposal which will afford further protections to tenants during the ongoing pandemic, and would extend the statewide moratorium on commercial evictions until May 1, 2021.
Governor Cuomo first imposed this stay of evictions back in March of last year. An Executive Order postponed most proceedings from March 7, 2020 “until the date on which none of the provisions that closed or otherwise restricted public or private businesses or places of public accommodation… continue to apply….” Since then, that original Order has been extended a number of times, with the most recent one set to expire on February 26, 2021.
Instead of issuing another extension thereafter, Governor Cuomo has set forth a legislative proposal, (which has already been passed by the state senate and the assembly, but is still being fine-tuned by legislators and the governor's office), which will effectively push the moratorium's time-frame to over a year. If signed, the proposal will prevent evictions until May 1, 2021, for some commercial tenants, particularly those that are independently owned, not dominant in their field, and have 50 or fewer employees.
Governor Cuomo explained the need for the extension: "COVID-19 has produced enormous hardship for homeowners and commercial and residential tenants as we implement restrictions necessary to protect the public health, and we owe them safety from eviction until they are able to get back on their feet.… The pandemic shouldn't get in the way of our ability to provide space for our businesses and roofs over our heads, and this assistance will foster a faster and stronger recovery when we finish defeating COVID."
In addition to the commercial eviction moratorium, Governor Cuomo also signed the “COVID-19 Emergency Prevention Act of 2020,” which provides, among other things, a moratorium on residential foreclosures and tax lien sales until May 1, 2021. After its expiration, homeowners able to demonstrate financial hardship related to COVID-19 are eligible for 360 days of mortgage forbearance. However, the homeowner’s lender can then extend the loan term for the duration of the forbearance, and any government taxes that may come due are not forgiven but deferred or postponed. The Act also protects against credit discrimination and negative credit reporting related to the pandemic. Further, the ban on late payments or fees for missed rent payments will also be extended, and tenants will continue to be able to apply any security deposits still retained by the landlord towards rent owed.
As COVID cases decline and the vaccination process revs up -- (the daily rate of new U.S. infections dropped to 108,144, as of February 9, 2021, compared to over 250,000 the month prior) -- there will hopefully be no need for any additional extensions. While affording tenants and homeowners opportunities to “stop the bleeding” may be good in the short term, the long-term effects of deferring those obligations, and the burdens such deferrals place on all concerned, will likely come at a significant cost to everyone, including American taxpayers.