The COVID-19 crisis has placed significant pressure on landlords throughout the State. Governor Cuomo and the Courts have issued various stays of enforcing warrants of eviction preventing landlords from evicting both residential and commercial tenants, although there is no stay on commencing a proceeding to seek a warrant of eviction.
For example, on June 30, 2020, the Governor signed the “Tenant Safe Harbor Act” which, among other things, prohibits evictions of residential tenants but allows a landlord to obtain a money judgment for nonpayment of rent (Covid-19 Eviction updates). On August 12, 2020, the Chief Administrative Judge, Lawrence Marks, issued an Administrative Order presently staying residential and commercial evictions until no sooner than October 1, 2020 (Administrative Order for Eviction Notices).
On September 4, 2020, the Centers for Disease Control and Prevention (CDC), issued an Order under Section 361 of the Public Health Service Act, temporarily staying residential evictions until December 31, 2020, to prevent the further spread of COVID-19. “Under this Order, a landlord, owner of a residential property, or other person with a legal right to pursue eviction or possessory action, shall not evict any covered person from any residential property in any jurisdiction to which this Order applies during the effective period of the Order.” (CDC Issues Shall Not Evict Order).
There are certain eligibility requirements that a covered person must demonstrate in order to obtain the stay. These eligibility requirements include that:
- The individual used their “best efforts to obtain all available government assistance for rent or housing”;
- The individual does not expect to: (i) earn more than $99,000 in 2020, or $198,000 if they are married and filing a joint tax return; (ii) “was not required to report any income in 2019 to the U.S. Internal Revenue Service, or (iii) received an Economic Impact Payment (stimulus check) pursuant to Section 2201 of the CARES Act”;
- The individual is experiencing a “substantial loss” of income, “or extraordinary out-of-pocket medical expenses”;
- The individual is using their best efforts to make partial timely payments that are close to the full payment; and
- An eviction would likely result in homelessness or being forced to move to another place that was either more expensive or where the individual could get sick from being close to others.
According to the Bill’s explanation, “[l]andlords would still be able to obtain money judgments for unpaid rent that accrued during that time period, but tenants would remain stably located in the meantime”. The CDC Order also “does not relieve any individual of any obligation to pay rent, make a housing payment, or comply with any other obligation that the individual may have under a tenancy, lease, or similar contract.” Moreover, “[n]othing in this Order precludes the charging or collecting of fees, penalties, or interest as a result of the failure to pay rent or other housing payment on a timely basis, under the terms of any applicable contract.” The CDC Order also does not prevent evictions based upon grounds that are not related to non-payment of rent, such as criminal behavior or destruction of the property. The CDC Order also does not prevent the non-renewal of leases.
The Realities of Future Landlord/Tenant Litigation
With many tenants not paying any rent, landlords may find themselves planning to litigate at the first opportunity. The CDC Order adds another hurdle that landlords with residential tenants will need to clear before evicting a defaulting tenant. However, landlords must keep in mind the practical realities of life in a post-coronavirus world in deciding how to proceed.
When courts resume full operations and the moratorium on evictions are completely lifted, there will be a torrent of landlord-tenant cases and inordinate delays as a result. In fact, those delays have already started, as summary eviction proceeding may be commenced, albeit a landlord cannot yet enforce a warrant of eviction. Those proceedings have “return dates” that can be months in the future. Post COVID-19, substantial time and money will need to be expended if litigation is pursued. There will also be more risk involved, as judges with equitable powers may favor tenants that were forced to close their businesses or lost their jobs during the height of the pandemic. With that in mind it may make sense for landlords to consider alternatives to litigation. The other alternative is to commence litigation now, to “get in line” and not wait until the system is flooded with cases, and use the time (and leverage) to negotiate with their tenants.
Landlords should consider whether their business plans and financial circumstances would be better served by negotiation and private resolution. If you conclude that your business needs are best served by negotiating now rather than waiting to go to court, reach out to your tenants and suggest that accommodations can be made during this time, while reserving your right to later pursue collection of the full amount of rent due.
Although it may feel like the world has come to a halt, this is no time for landlords to sit on their hands. Taking a pragmatic but proactive approach to non-paying tenants will help to insulate a landlord from the chaos that will undoubtedly ensue when the moratorium on evictions is lifted.
As governmental orders and legislation can change daily and may alter a landlord’s decision and strategy, staying informed is of the utmost importance. If you need assistance, please contact Marci Zinn at firstname.lastname@example.org or Christopher E. Vatter at email@example.com.
 The CDC defines the “Covered Person” as “any tenant, lessee, or resident of a residential property who provides to their landlord, the owner of the residential property, or other person with a legal right to pursue eviction or a possessory action” who can meet certain eligibility requirements.