On March 20, 2020, Governor Cuomo issued the COVID-19 Emergency Executive Order1.prohibiting landlords within New York State from bringing an eviction proceeding against any residential or commercial tenant for 90 days (that is, until June 20, 2020). This Order also prohibited lenders from foreclosing on any residential or commercial property for the same 90-day period. Residential and commercial tenants experiencing pandemic-related financial hardship have been waiting for additional legal relief. On Friday, May 7, 2020, they got it when Governor Cuomo updated the COVID-19 Emergency Executive Orders for residential tenants and commercial tenants2. Here's a summary of what New York-area landlords and tenants need to know.
Extension of Eviction and Foreclosure Moratorium
Governor Cuomo extended the eviction and foreclosure moratorium for an additional 60 days beyond June 20, 2020 for tenants and owners who are eligible for unemployment insurance or benefits under state or federal law and/or facing COVID-19 financial hardship. As a result, until August 20, 2020:
- landlords are prohibited from bringing a proceeding or enforcing an eviction of such residential or commercial tenants; and
- lenders are prohibited from initiating a proceeding or enforcement of a foreclosure of any residential or commercial mortgage for nonpayment against such property owners.
No Late Fees for Late Rent Payment
From March 20, 2020 until August 20, 2020, landlords, lessors and grantors are prohibited from demanding -- and are not entitled to -- any payment, fee or charge for late payment of rent.
Residential Lease Relief: Use of Security Deposits for Rent
- If a residential tenant or licensee is eligible for unemployment insurance or benefits under state or federal law or are otherwise facing COVID-19 financial hardship, they may (at their sole option) request that their landlord apply their security deposit (including any accrued interest) to pay past due rent or future rent.
- To effectuate use of a security deposit for rent payments, the updated Executive Order requires landlords and tenants or licensees to execute a written agreement setting forth the material terms. The tenant/licensee will remain liable for any rent not covered by their security deposit.
- The agreement may be executed in counterparts by email.
- Landlords may not "harass, threaten or engage in any harmful act to compel such agreement."
- Starting at least 90 days from the date the security deposit was first applied to a rent payment, the tenant/licensee must begin to replenish the security deposit at the rate of 1/12 of the amount used as rent per month. Alternatively, the updated Executive Order provides that the tenant/licensee may purchase insurance that replenishes the security deposit; and that the landlord must accept such insurance as replenishment.
Footnotes
1 New York State Executive Order No. 202.8
2 New York State Executive Order No. 202.28
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