On December 28, 2020, Governor Cuomo signed into law the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 (L. 2020, c. 381; “Act”). The Act provides immediate relief to respondents and defendants in residential eviction proceedings and foreclosure actions in New York State, including, among other things:
- Staying pending residential eviction proceedings (“Proceedings”) and residential real property mortgage foreclosure actions (“Actions”) for sixty days.
- Staying Proceedings and Actions filed within thirty days of December 28, 2020 for sixty days.
- Publishing form “Hardship Declarations” to be used by tenant-respondents in eviction matters and defendant-mortgagors in residential foreclosure actions in reporting financial hardship during or due to the COVID-19 pandemic.
- Staying Proceedings and Actions until at least May 1, 2021 in Proceedings and Actions where a tenant-respondent or defendant-mortgagor submits a completed Hardship Declaration.
Several elements of the enacted legislation left many questions unanswered and/or unclear. Therefore, administrative orders were issued in line with the legislation and to provide the Courts’ expectations. Administrative order AO 340/2020 addresses eviction proceedings and Administrative order AO 341/20 addresses foreclosure actions. Additionally, forms of Hardship Declarations for both have been created.
As to AO/340 -Residential eviction proceeding pending on December 28, 2020, including eviction proceedings filed on or before March 7, 2020, and any residential eviction proceeding commenced on or before January 27, 2021, are stayed for 60 days. However, the Court may hear cases where other tenants’ rights are being infringed or creating safety issues. There is a bar on the issues of default judgments. Where a warrant of eviction has been issued, but, not executed upon, there is a stay pending a status conference. Where there was a prior judgment for objectionable or nuisance behavior, the Court will be required to hold a hearing. Finally, the Petitioner must serve the hardship declaration in English or the tenant’s primary language.
As to AO 341- Act immediately stays pending residential foreclosure actions for sixty days, and provides that, where a mortgagor/owner submits to the foreclosing party or the court a declaration attesting to hardship arising from or during the COVID-19 pandemic, proceedings will be further stayed (or commencement tolled) until May 1, 2021.
-The Act does not cover vacant and abandoned property that was first listed on the statewide vacant and abandoned property electronic registry before March 7, 2020. A hardship declaration, in blank format, must be provided to the defendant (6 most common languages). The Courts are still working how to achieve the goal economically. Where no hardship declaration is returned, the matter may proceed after 60 days (or proceed with status conference). If the Hardship declaration is returned to the plaintiff the matter is stayed to at least May 1, 2021.
In pending actions, where a judgment was issued before December 28, 2020, the matter is stayed until the Court holds a status conference with the parties. If the Defendant submits a Hardship Declaration to the plaintiff, the Court, etc, the action will be stayed until at least May 1, 2021. A prior COVID 19 Assessment Conference does NOT satisfy the new conference requirement.
The Court cannot accept a new residential foreclosure proceeding filing unless it is accompanied by both an affidavit of service of the Hardship Declaration and an Affidavit from the foreclosing party that no Hardship Declaration has been received from the owner/mortgagor. At the earliest opportunity following a new file, the Court must seek confirmation, on the record, or in writing, that the owner/mortgagor receive the blank Declaration and has not submitted a completed Declaration to plaintiff (or agent). Where procedures were followed, the matter may proceed. If not followed, then the Court must stay proceedings for no less than 10 business days to give the owner/mortgagor an opportunity to submit the declaration.
As New York continues to work through the challenges of the pandemic, the Legislators and Court officials work toward extending protections to homeowners, borrowers, and tenants which have had a significant loss of income. However, many others view the extension with a Hardship Declaration, without proof of economic hardship, as likely to result in further economic decline for the state and those doing business in New York.
For any questions regarding these changes, please contact Deborah Gallo, Director of Operations, at firstname.lastname@example.org.