In December, New York Governor Andrew Cuomo signed the COVID-19 Emergency Eviction and Foreclosures Prevention Act of 2020, which supplied a moratorium on residential eviction and foreclosures proceedings till Could 1, 2021. This act, nevertheless, didn’t present any extensions of the moratorium on business evictions and foreclosures initially supplied by Govt Order 202. The newest extension of the business ban (pursuant to Govt Order 202.91) expired on February 22, 2021. On February 22, 2021, Governor Cuomo issued Govt Order 202.95, which typically continued “the suspensions and modifications of regulation and any directives, until outdated, modified or in any other case expired, made by Govt Order 202” for thirty days till March 24, 2021. Apart from this blanket extension, business eviction and foreclosing protections had not been addressed.
On March 9, 2021, Governor Cuomo signed the COVID-19 Emergency Defend Our Small Companies Act of 2021 (the “Act”), which offers eviction and foreclosures protections for small companies. The Act applies to business tenants which are resident in New York, independently owned and operated, not dominant of their area and have fifty or fewer workers (individually, a “Small Enterprise,” or collectively, “Small Companies”). The Act offers that no Small Enterprise could also be eliminated by any means previous to Could 1, 2021, besides pursuant to a proper eviction continuing (i.e., “self-help” evictions are prohibited). Any eviction proceedings pending on March 9, 2021, or commenced inside thirty days thereof, can be stayed for at the least sixty days.
Landlords are required to incorporate a “Hardship Declaration” with each written discover required to be supplied earlier than the graduation of an eviction continuing or with each discover of petition or summons and criticism served on a Small Enterprise. The Hardship Declaration offers discover to the Small Enterprise that if it has misplaced important income or had considerably elevated crucial prices through the pandemic, then it can’t be evicted till at the least Could 1, 2021, for nonpayment of hire or holding over. The owner should additionally present the Small Enterprise a mailing deal with and e‑mail deal with to which the Small Enterprise can return the Hardship Declaration. If the Small Enterprise confirms its monetary hardship by signing and delivering the Hardship Declaration to the owner, such Small Enterprise can’t be evicted till Could 1, 2021. Nevertheless, the Small Enterprise should still be evicted for violating its lease persistently and unreasonably participating in conduct that considerably infringes on the use and pleasure of different tenants or causes a considerable security hazard to others (collectively, “Unreasonable Habits”). Pursuant to the Act, courts are prohibited from accepting any petition to start an eviction continuing until the owner recordsdata an affidavit of service, demonstrating the style by which the owner served a replica of the Hardship Declaration on the Small Enterprise and an affidavit testifying both that (i) on the time of submitting the owner had not acquired a signed Hardship Declaration or (ii) though the Small Enterprise returned a signed Hardship Declaration, the Small Enterprise is participating in Unreasonable Habits.
Moreover, the Act offers protections in opposition to foreclosures for Small Companies that personal ten or fewer business items, whether or not straight or not directly. The ten or fewer business items could also be in multiple property or constructing so long as the full combination variety of ten items are at present occupied by a tenant or can be found for hire.
The Act doesn’t apply to any mortgage loans made, insured, bought or securitized by a governmental company. Much like the moratorium on eviction proceedings, any foreclosures actions in opposition to a Small Enterprise pending on March 9, 2021, or commenced inside thirty days thereof, can be stayed at the least sixty days. The mortgagee is required to incorporate a Hardship Declaration with each discover required to be supplied to the Small Enterprise previous to submitting an motion for foreclosures, and if the Small Enterprise returns the Hardship Declaration to the mortgagee, the mortgagee can’t provoke a foreclosures motion till Could 1, 2021. The Act additional offers a moratorium on actions to foreclose on delinquent taxes or to promote a tax lien regarding business actual property till Could 1, 2021, if the Small Enterprise submits a Hardship Declaration. It additionally prohibits discrimination within the dedication of whether or not credit score needs to be prolonged to any Small Enterprise that owns business actual property or reported negatively to a credit score reporting company as a result of such Small Enterprise has been granted a keep of mortgage foreclosures proceedings, tax foreclosures proceedings or tax lien gross sales.
© Copyright 2020 Cadwalader, Wickersham & Taft LLPNationwide Legislation Assessment, Quantity XI, Quantity 75