UPDATED: New York State Stays Evictions and Foreclosures Due to the COVID-19 Pandemic

For a more recent update on the status of evictions and foreclosures in New York, please see Executive Orders, Administrative Court Orders, and Legislation: The Ever-Changing NY Landscape on Foreclosures, Evictions, and Out-of-State Travel

Update:  On May 20, 2020, Chief Administrative Judge Marks issued Administrative Order 111/2020 announcing that e-filing through the NYSCEF system, including the filing of new non-essential matters, will be restored state-wide as of May 25, 2020, including in regions that have not yet re-opened.  This will allow for filings in pre-existing eviction and foreclosure matters, but the moratorium on eviction and foreclosure judgments set forth in Executive Order 202.8 will continue in effect through June 20, 2020.  Executive Order 202.28 also remains in effect and continues the moratorium on evictions and foreclosures until August 20th so long as the non-payment of rent or mortgage is by “someone that is eligible for unemployment insurance or benefits under state or federal law or otherwise facing financial hardship due to the COVID-19 pandemic.”

Original Post:

Recent Executive Orders by New York Governor Cuomo and Administrative Orders by the New York State courts effectively have stayed the enforcement of residential and commercial evictions and foreclosures in New York through June 20, 2020, and barred the commencement of any such new proceedings until further order of the courts.  Governor Cuomo also directed the Department of Financial Services (“DFS”) to issue emergency regulations to allow “consumers” to apply for forbearances due to financial hardship resulting from COVID-19.  DFS has issued only regulations pertaining to residential mortgages of properties located in New York State, not commercial loans.  On May 7, 2020, Executive Order 202.28 was issued thereby extending the initiation or enforcement of eviction and foreclosure proceedings until August 20, 2020 for anyone whose inability to pay has been caused by COVID-19-related financial hardship.  Executive Order 202.28 also permits residential landlords, with the consent of the tenant, to apply the security deposits and interest thereon to satisfy rent obligations.  Finally, Executive Order 202.28 bars landlords or lessors from assessing charges for late payment of rent during the period of March 20, 2020 through August 20, 2020.   

Evictions.  On March 20, 2020, Governor Cuomo issued Executive Order 202.8, which mandates, among other things, that from March 20, 2020, “there shall be no enforcement of either an eviction of any tenant residential or commercial, or a foreclosure of any residential or commercial property for a period of ninety days.”[1]  On May 7, 2020, Executive Order 202.28 extended the moratorium on evictions and foreclosures another sixty days to August 20, 2020, so long as the non-payment of rent or mortgage is by “someone that is eligible for unemployment insurance or benefits under state or federal law or otherwise facing financial hardship due to the COVID-19 pandemic.”  The distinction between the two orders is subtle, but significant.   Executive Order 202.8 bars the enforcement of any foreclosure or eviction proceeding until June 20th – period.  Executive 202.28, on the other hand, bars the initiation of any foreclosure or eviction proceedings against only those owners or renters who face financial hardship due to the pandemic for a 60-day period commencing June 20.  This Order effectively establishes a financial hardship defense to a foreclosure or eviction proceeding.  In practice, if a landlord or lender is unwilling to accept a tenant or borrower’s showing of COVID-19-related financial hardship, the landlord or lender may initiate a proceeding and the tenant or borrower will have to assert financial hardship as a defense.  However, no proceeding can be initiated until the New York State court reopen to allow the commencement of new actions.

While Executive Order 202.8 prohibits any evictions until June 20, 2020, New York Courts have essentially stayed any such proceeding indefinitely.  A March 15, 2020 Memorandum from Chief Administrative Judge of the Court Lawrence K. Marks ordered that, “[e]ffective March 16, all eviction proceedings and pending eviction orders shall be suspended statewide until further notice.”  Judge Marks issued an Administrative Order on March 22, 2020 that barred the “filing of any court papers, in person or electronically, with the exception of a discrete list of “essential proceedings,” which order is “effective immediately and until further order.”  Evictions have not been exempted as essential proceedings.[2]  As discussed below, while New York courts have begun to reopen virtually, the bar on filing any new non-essential proceedings remains in effect.

The combined effect of Executive Orders 202.8, 202.28, the Memorandum, and Administrative Order is that commencement of any new eviction proceedings is barred until issuance of further order by the New York courts, but, in no event, shall any such order be effective before June 20, 2020.  Eviction proceedings are further barred until August 20, 2020 with respect to any tenants showing financial hardship due to the pandemic.

Foreclosures.  In New York, all mortgage foreclosures are judicial foreclosures, meaning the foreclosing lender must commence and prosecute a lawsuit.  As with evictions, Executive Order 202.8 barred the initiation of any foreclosure of any residential or commercial property until June 20, 2020, regardless of financial hardship.  Executive Order 202.28 extends the moratorium to August 20, 2020 so long as the nonpayment of mortgage is “someone that is eligible for unemployment insurance or benefits under state or federal law or otherwise facing financial hardship due to the COVID-19 pandemic.”  Again, the March 22, 2020 Administrative Order barring all non-essential filings in New York Courts bars commencement of any foreclosure action “until further order.”  Thus, the commencement of any new foreclosure action is barred until the later of June 20, 2020, or a further order from the New York Courts.   At that point, all foreclosure actions resulting from pandemic-related financial hardship will be further barred until August 20, 2020.

On March 21, 2020, Governor Cuomo issued Executive Order 202.9, which directs the DFS to “ensure under reasonable and prudent circumstances that any licensed or regulated entities provide to any consumer in the State of New York an opportunity for the forbearance of payments for a mortgage for any person or entity facing a financial hardship due to the COVID-19 pandemic.”  Order No. 202.9 continues, “The Superintendent [of DFS] shall promulgate emergency regulations to require that the application for such forbearance be made widely available for consumers.”  “[S]uch application shall be granted in all reasonable and prudent circumstances solely for the period of such emergency.”  On March 24, 2020, DFS promulgated a new regulation, Emergency Relief for New Yorkers Who Can Demonstrate Financial Hardship as a Result of COVID-19.   Those regulations provide relief for residential mortgages of properties located in New York, but explicitly do not apply to commercial mortgages or any other loans.  It remains to be seen whether any future regulations implementing Executive Order No. 202.9 will be issued. 

Existing Pre-COVID-19 Eviction and Foreclosure Actions.  In early April 2020, New York courts began reopening virtually.  Initially, no new non-essential matters were permitted to be filed, nor were any papers to be filed in pending non-essential matters – effectively continuing the wholesale ban on filings in new or existing foreclosure or eviction matters.[3]  As of April 30, 2020, the virtual courts have been expanded to allow electronic filings of new motions and responsive papers to motions in pending cases.[4]  That means that, while the moratorium on enforcement of foreclosures and evictions remains in effect through June 20, motions are allowed in pending foreclosure and eviction actions. 

That being said, individual courts and judges are issuing individual rules and procedures, so it is important to check the specific court and judge’s rules to confirm what is allowed even in pending cases.  For instance, in New York Supreme, Civil Term Temporary Procedures were promulgated on March 19, 2020, specifically stating that “continuing until further notice … foreclosure auctions are postponed; foreclosure conferences will be administratively adjourned.”[5]  Whether any motion practice will be entertained in an existing action will therefore depend on the individual court and judge’s current operating procedures.

Mintz will continue to monitor and analyze the rapidly changing legal landscape.

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