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NYS Acts to Prevent Evictions and Foreclosures … and Protect Property Owners

Mitchell Marcus

1.6.21 | Client Alert

Recognizing the ongoing devastating effect of the pandemic, Governor Cuomo has signed the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 (The Act). The legislation allows renters and homeowners to delay eviction and foreclosure proceedings until May 2021, if they can demonstrate financial hardship caused by the COVID-19 pandemic.

Under the Act, renters and homeowners will have to file a “standardized hardship eviction declaration” form with their landlord, the courts, or their lenders. A financial hardship exists if renters/homeowners have lost income; are unable to obtain meaningful employment; or have increased health, childcare, or family care expenses due to the COVID-19 pandemic. Once the declaration form is filed, active eviction proceedings would be suspended until May 1, 2021 and a landlord would not be able to file a new eviction case.

The law also stays evictions for the next 60 days to give renters/homeowners time to file the declaration form. Nevertheless, landlords can evict tenants that are creating safety or health hazards for other tenants, as well as those tenants who do not submit hardship declarations.

Protecting Property Owners

Property owners with 10 or fewer apartments can also claim financial hardship due to a decline in rent collections, an increase in expenses,  or a loss of employment, however the person filing the financial hardship must live in 1 of the units. Once a landlord files the declaration form with their local assessor, mortgage lender, or the courts, they will be protected from foreclosure, tax lien sales, or negative credit reporting related to falling behind on mortgage payments. The mortgage and foreclosure protections will only apply to single family residences, condos, co-ops, and owner-occupied multifamily residences with under 10 units.

Additional Items of Note

The Act prohibits lending institutions from discriminating against a property owner seeking credit because the property owner has been granted a stay of mortgage foreclosure proceedings, tax foreclosure proceedings or tax lien sales or because the owner is in arrears and has filed a hardship declaration with the lender.

Local governments are required to carry over Senior Citizens Homeowner Exemption and Disabled Homeowner Exemptions from the 2020 assessment roll to the 2021 assessment roll at the same levels.

Berdon will continue to monitor for further state action on evictions and foreclosures.

Questions: Contact Mitchell Marcus at 212.331.7460 | MMarcus@Berdon.com or your Berdon advisor.