The past year has seen a great deal of news pertaining to eviction moratoriums. Federal level, state level, residential, commercial, expired, extended – frankly it has been difficult to keep straight what law is in place at any given time. This blog offers a brief overview of the laws and lawsuits that have molded federal and state eviction moratoriums, and the current status of New York law with respect thereto.

The Federal Eviction Moratorium

In 2020, lawmakers enacted the very first nationwide eviction moratorium as part of a federal stimulus package. The moratorium was set to expire on July 25, 2020. After its expiration, with COVID cases still on the rise, the Centers for Disease Control and Prevention (“CDC”) issued a national eviction moratorium, which went into effect in September 2020 and lasted throughout the first half of 2021. In July, when that moratorium expired, the CDC issued a new one that applied only to regions of the country with high COVID transmission rates.

The CDC moratoriums have undergone a number of legal challenges, a notable instance of which reached the United States District Court for the District of Columbia. The federal government argued that the moratorium was an exercise of “legislative powers” granted to Congress and delegated to the CDC. In opposition, the plaintiffs (which included landlords along with the Georgia and Alabama chapters of the Association of Realtors) contended that the CDC had well-exceeded those powers. Although the landlords won on summary judgment, the Court stayed enforcement of that order pending the government’s appeal. When the Court later denied the plaintiffs’ emergency application to vacate the stay, the plaintiffs appealed to the Supreme Court. The Supreme Court denied the motion to vacate, and the stay remained in place.

At the end of July, with the then-existing stay set to expire, the CDC issued yet another moratorium, prompting the plaintiffs’ return to court. In doing so, they challenged the new moratorium and again challenged the stay of the District Court’s order. The District Court denied the motion, holding that the stay of enforcement applied to the newly enacted moratorium.

Upon appeal to the Supreme Court, however, the landlords finally prevailed. Specifically, in August 2021, the Supreme Court vacated the stay of enforcement and held that the moratorium was unlawful because the CDC exceeded its statutory authority. Accordingly, any eviction moratorium in place since then has been at the state level, as discussed below, rather than at the federal level.

The New York Eviction Moratorium

New York’s moratorium on eviction proceedings began in March 2020, when the pandemic first began to rear its ugly head. That month, Chief Administrative Judge Marks announced that all proceedings for residential evictions were suspended. However, the state moratorium did not become law until December 2020, when former governor Andrew Cuomo signed the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 (“CEEFPA”). That act banned eviction and foreclosure proceedings against residential tenants who filed a declaration that they were experiencing financial hardship due to COVID or that at least one member of the household was “high-risk” for contracting COVID and, therefore, that moving would pose a significant health risk.

Protection for certain commercial tenants came in March 2021, when the state created a commercial eviction moratorium for small businesses that (1) had 50 or fewer employees; (2) were residents of new York; (3) were independently owned and operated; and (4) were not dominant in their field. It likewise created a foreclosure moratorium for small businesses with one additional requirement – that they have 10 or fewer commercial units in total.

Needless to say, the state moratoriums have not gone unchallenged. A group of five landlords and one association filed suit in federal court alleging that the moratorium violates property owners’ rights to due process and free speech. Initially, the plaintiffs were unsuccessful as the district court found, among other things, that the law did not implicate procedural due process. However, the plaintiffs fared better on an emergency appeal to the U.S. Supreme Court[1] and, on August 12, 2021, the Supreme Court enjoined the moratorium in part, finding certain provisions thereof insufficient with respect to due process protections. (Chrysafis et al. v. Lawrence K. Marks, Docket No. 21-civ-2516).

Importantly, however, the particular statute at issue in those cases was set to expire at the close of August. Accordingly, state lawmakers took to the drawing board and, on September 1, 2021, Governor Kathy Hochul signed into law a four-month extension of the moratorium (into January 2022). Unlike its predecessor, this latest moratorium applies to, among others, businesses with 100 or fewer employees (as opposed to 50 or fewer, under the old law).

However, it also includes a mechanism (allegedly addressed to due process concerns) pursuant to which landlords and foreclosing lenders may challenge the tenant’s hardship declaration. For those instances where the hardship declaration is challenged, the landlord or lender can move for a hearing as to whether the hardship claim is invalid. Moreover, even where the hardship claim is deemed valid, the court will direct the tenant to apply for federal or local rental assistance, presuming the tenant is eligible and has not yet applied.

Unhappy with what they viewed as a workaround for the Supreme Court’s injunction,

the plaintiffs took to court and challenged the newly enacted law. However, the Second Circuit examined only the then-expired law (as it was the law in existence when the claim was filed) and found the plaintiffs’ due process challenge moot in light of the “change of legal framework.” The Court also recommended that the plaintiffs amend their complaint to address the newly enacted legislation.

Conclusion

In sum, while the federal eviction moratorium has been lifted, a New York-specific moratorium remains in place (at least for now). However, this latest New York moratorium offers landlords a procedural mechanism to challenge claims of hardship. For more on the new eviction moratorium statute and your rights with respect thereto, contact Daniel Shapiro at dshapiro@jaspanllp.com or Rachel Morgenstern at rmorgenstern@jaspanllp.com.

[1] The plaintiffs first sought emergency appeal from the Second Circuit, but were denied.