COVID-Related Legislative Update

Eviction Moratorium Extension

On May 4, 2021, Governor Cuomo signed a bill extending the eviction moratoriums set forth in the COVID-19 Emergency Protect Our Small Businesses Act of 2021 (the “Commercial Moratorium”) and the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 (the “Residential Moratorium”). These extensions (collectively, the “Extension”) continue to protect residential and commercial tenants who claim to have suffered economic hardship as a result of the pandemic by prohibiting residential and commercial evictions, foreclosure proceedings, credit discrimination and negative credit reporting until August 31, 2021

Eviction Proceedings: 

• The Extension extends the expiration of the Commercial and Residential Moratoriums until August 31, 2021 for tenants who claim a COVID-19 related hardship. 
• Landlords are required to serve tenants with a hardship declaration form, which tenants must sign and return in order to either prevent the initiation of an eviction proceeding or stay a pending proceeding through August 31, 2021. Landlords may move forward with eviction proceedings against tenants who (1) do not return a hardship declaration, or (2) even if they submit a hardship declaration, persistently and unreasonably engage in behavior that substantially infringes on the use and enjoyment of other tenants or occupants or causes a substantial safety hazard to others.
• Currently, the Commercial Moratorium applies to small businesses with 50 or fewer employees that demonstrate a financial hardship and which otherwise meet the statute’s requirements. However, this standard will likely change to encompass more commercial tenants (see discussion of S.5742 and A.7127 below). 

Foreclosure and Tax Lien Sales: 

• The legislation extends the moratorium on tax lien sales and residential/commercial foreclosure proceedings until August 31, 2021. 
• Residential property owners that own 10 or fewer dwellings can file hardship declarations to prevent foreclosure and tax lien sales. 

Credit Discrimination and Negative Credit Reporting: 

• Lending institutions are prohibited from discriminating against property owners that have been granted a stay of mortgage foreclosure proceedings, tax foreclosure proceedings, or tax lien sales.

Expansion of Commercial Tenants Covered by Eviction Moratorium

In addition to the foregoing, the New York State Senate and Assembly have passed a bill (S.5742 and A.7127) expanding the Commercial Moratorium’s protections, which has been delivered to Governor Cuomo for signature. As noted above, the Commercial Moratorium currently applies to commercial tenants with up to 50 employees, among other requirements. However, this legislation expands the Commercial Moratorium’s application to tenants with up to 100 employees, or up to 500 employees if the tenant’s business was shut down by state order for a two-week period between May 15, 2020, and May 1, 2021. 

Emergency Rental Assistance Program

The COVID-19 Emergency Rental Assistance Program (“ERAP”), enacted as part of this year’s New York State budget, began accepting applications on June 1, 2021. ERAP will assist low and moderate-income households in relation to the pandemic by providing rent relief of up to 12 months of past due rent, up to three months of additional rental assistance, and up to 12 months of utility arrears for eligible applicants. 

To be eligible, New York residents must meet all of the following criteria: 

• Household gross income is at or below 80 percent of the Area Median Income (AMI). These income limits differ by county and household size. A household may qualify based on current income or calendar year 2020 income that is at or below 80 percent AMI. 
• On or after March 13, 2020, a member of the household received unemployment benefits or experienced a reduction in income, incurred significant costs or experienced financial hardship, directly or indirectly, due to the COVID-19 pandemic. 
• The applicant is obligated to pay rent at their primary residence and has rental arrears (rent overdue) at their current residence for rent owed on or after March 13, 2020. 
• The household must be at risk of experiencing homelessness or housing instability, which can be demonstrated by having rental arrears owed on or after March 13, 2020.

There are no immigration status requirements to qualify for the program.

For the first 30 days of the program, New York will prioritize applicants in the following order: 

1. Households with income that is at or below 50% of the Area Median Income and a household member who has been unemployed for the last 90 days; is a veteran; is experiencing domestic violence or has survived human trafficking; has an eviction case pending; resides in a mobile home; lives in a ZIP code that was hit disproportionately hard by COVID-19; or lives in a building with 20 or fewer units.
2. Households with income at or below 50% of the Area Median Income.
3. Households with income at or below 80% of the Area Median Income and a household member who meets one of the criteria listed in No. 1.
4. Households with income at or below 80% of the Area Median Income.

After the first 30 days, applications will be approved on a first-come, first-served basis. 

Payments will be made directly to the landlord and/or utility company on behalf of the tenant. 

In order for landlords to accept the rental arrears payments, they must provide certain specified documentation (including, among other things, a W-9, an executed lease or other proof of tenancy, and proof of rent past due). Landlords must also agree to all of the following conditions:

• The ERAP payment satisfies the tenant’s full rental obligations for the time period covered by the payment. 
• Waive any late fees due on any rental arrears covered by the ERAP payment. 
• No increase in the monthly rental amount above the monthly amount due at the time of application for ERAP assistance for months for which rental assistance is received and for one year from receipt of the ERAP payment. 
• No eviction of the household on behalf of whom the ERAP payment is made by reason of lease expiration or holdover tenancy for one year from the receipt of the ERAP payment. An exception to this requirement shall be made if the dwelling unit contains four or fewer units and the property owner or owner’s immediate family members intend to immediately occupy the unit for use as a primary residence.

Because funding is limited, applications should be submitted as soon as possible. For further information on the ERAP program, please visit this link. Rosenberg & Estis, P.C.’s Litigation Team is prepared to answer any questions you may have regarding the foregoing. 

---

Contributing Advisors