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Governor Phil Murphy today signed legislation that will provide comprehensive housing eviction prevention and utility assistance for renters who have been financially impacted by the COVID-19 pandemic. The legislation (S3691) appropriates an additional $500 million for the COVID-19 Emergency Rental Assistance Program (CVERAP) and $250 million for utility assistance, both programs administered by the New Jersey Department of Community Affairs. The bill also mandates new eviction and foreclosure moratorium deadlines and special eviction protections for tenants who were directly impacted by the pandemic. New Jersey’s eviction moratorium continues through August for all state residents with household incomes below 120% Area Medium Income and through the end of the year for certain households with incomes below 80% AMI. The announcement from the CDC extending the nationwide moratorium on evictions for 60 days may provide additional protections for certain residents.

     The Governor also signed legislation (A4463) providing additional protections for individuals who were unable to pay rent during the public health emergency by mandating that court records pertaining to their non-payment during this period be kept confidential.

     The eviction prevention bill will gradually phase out the State’s eviction moratorium based on individual renters’ situations while mandating special protections for those who were unable to pay their rent during the period of March 1, 2020 through August 31, 2021, or, for certain tenants, through December 31, 2021. Additionally, the CVERAP program, which was previously aimed at those who were making less than 80 percent of AMI, will expand its scope of eligible applicants by August 31, 2021, to include those making less than 120 percent of AMI.

     * Ensures that eviction protection is available for tenants with household incomes below 120 percent AMI who were unable to pay their rent between the covered period of March 1, 2020 and August 31, 2021, and who provide a self-certification form to their landlords and, when applicable, to the court. Tenants meeting these requirements cannot ever be evicted for any outstanding rent during the covered period. While tenants who are covered by this special protection may not be evicted, this rent is still due to landlords and landlords may pursue this rent through a money judgment.

     * Provides additional eviction preventions for tenants with household incomes below 80 percent AMI, who have applied for state or local rental assistance, and who have experienced an economic impact due to the COVID-19 pandemic. Tenants meeting these requirements who provide a self-certification for to their landlords and, when applicable, to the courts, are protected from eviction prior to December 31, 2021, for unpaid rent accrued from September 1, 2021 through December 31, 2021. This is in addition to protection from eviction for rent accrued during the covered period as described above.

     * For the special eviction protections to take effect, the tenant MUST provide the required self-certification form to their landlord and, when applicable, to the courts.

     * All New Jersey households with income less than 120 percent AMI may apply for the COVID-19 Emergency Rental Assistance Program.

     * Landlords who are receiving rental assistance must waive any late fees accrued by tenants during the special protections period.

     * Landlords may not report delayed rent to crediting agencies and they cannot sell the debt.

     * Landlords may not disclose non-payment of rent to others and prospective landlords may not deny renting to a person who wasn’t able to pay rent during the covered period of March 1, 2020 and August 31, 2021.

     * The moratorium on home foreclosures ends on November 15, 2021, for all income levels. This includes landlords facing foreclosure who currently have tenants.

For questions regarding the legislative changes, please contact Deborah Gallo, Esq. at dgallo@friedmanvartolo.com.

On June 29, 2021 the Supreme Court issued its decision in Alabama Association of Realtors, et al. v. United States Department Of Health And Human Services, et al., 594 U.S. ___ (2021). The Court denied the D.C. District Court’s stay of the Centers for Disease Control and Prevention’s (CDC) nationwide moratorium on evictions during the COVID-19 pandemic. Justices Thomas, Alito, Gorsuch, and Barrett would have granted the application. Justice Kavanaugh concurred in the judgment. He agreed with the District Court, which held that the CDC exceeded its existing statutory authority by issuing a nationwide eviction moratorium. But since the CDC plans to end the moratorium on July 31, 2021, he voted to deny the application. Kavanaugh wrote individually to clarify that new legislation would be required to extend the moratorium beyond July 31. Kavanaugh agreed with the district court that the eviction moratorium is unlawful but refused to disturb the district court’s stay of its own order. Ultimately, we now know that there would be five votes to undo a future, similar regulation without Congressional action.

Previously, the district court concluded the Public Health Service Act, 42 U.S.C. §§ 201 – 300mm-61, did not grant the CDC the legal power to impose a nationwide eviction moratorium. The Court explained that the first clause of section 264(a) grants the CDC, with approval of the Secretary of the Department of Health and Human Services, authority to make and enforce regulations to prevent the interstate or international spread of disease. But the Court interpreted this authority as being tied to, and narrowed by, the second clause empowering the CDC to regulate “sources of dangerous infection to human beings.”

The CDC moratorium went into effect on September 4, 2020 and was extended to July 31, 2021. The CDC moratorium applied to all residential properties nationwide. Violators of the moratorium faced potential criminal penalties, including a fine of up to $250,000, one year in jail, or both, and a maximum fine of $500,000 for organizations.  As this article is written, and the Delta Variant continues to spread, the White House is imploring that Congress act and pass legislation.   For any questions, please contact Deborah Gallo, Esq. at dgallo@friedmanvartolo.com.  

Massachusetts’s pause on evictions expired on October 17, 2020. When the state moratorium expired, a federal moratorium established by the Centers for Disease Prevention and Control (CDC) became effective in Massachusetts. Through July 31, 2021, the CDC moratorium prevents residential evictions for non-payment for qualified tenants who submit a written declaration to their landlord. Courts will accept filings and process cases and may enter judgments but will not issue an order of execution (the court order that allows a landlord to evict a tenant) until after the expiration of the CDC order. Protection is limited to households who meet certain income and vulnerability criteria.

In addition, the Trial Court has changed its procedures to provide for a two-tier process that will enable tenants and landlords to access resources and mediate their disputes in order to preserve tenancies.

A state law enacted in December of 2020 added new requirements for notices to quit issued by landlords and made additional changes to court processes. Chapter 257 of the Acts of 2020, An Act providing for eviction protections during the COVID-19 pandemic emergency, as amended by sections 12 to 17 of chapter 20 of the Acts of 2021 requires landlords to provide a form containing certain information related to residential tenant’s rights and available resources when giving a written notice to quit to a residential tenant for nonpayment of rent. The Act also requires EOHED (mass.gov/noticetoquit) to (1) develop the accompanying form that a landlord will provide when given a residential tenant a written notice to quit for nonpayment of rent; and (2) receive from landlords electronic copies of any such notices to quit. This change remains in effect until January 1, 2023.

The Chief Justices of the Housing Court, District Court, and Boston Municipal Court departments each issued a standing order outlining procedures applicable in their respective court departments for summary process (eviction) cases following the expiration of the Massachusetts eviction moratorium.

To wit: “Accordingly, it is hereby ORDERED, pursuant to my authority as set forth in G.L. c. 211B, § 9, that to the extent any provisions of Trial Court Rule I: Uniform Summary Process Rules are inconsistent with the individual standing orders issued by the Chief Justices of the Housing Court, District Court, and Boston Municipal Court departments, those provisions of Trial Court Rule I: Uniform Summary process Rules are suspended until further order.

This Administrative Order is effective as of June 15, 2021 and will remain in effect until further order. This Administrative Order is temporary and may be modified or rescinded at any time, as necessary.”

We continue to monitor change and will update according.  For any questions, please contact Deborah Gallo, Esq. at dgallo@friedmanvartolo.com.

In recent case US Bank National Association v. Davis,  Supreme Court Appellate Division, 2^nd Dept., New York, 2021 WL 2816725, 2021 NY Slip Op. 04251,  decided July 7, 2021,  the Court found that the Judgment of foreclosure and sale was reversed plaintiff’s motion to confirm the referee’s report and for a judgment of foreclosure and sale is denied, cross motion of the defendants Ray Osborn Davis and 964–966 Myrtle, LLC, which was pursuant to CPLR 3215(c) to dismiss the complaint insofar as asserted against the defendant 964–966 Myrtle, LLC, as abandoned is granted, and the order dated June 14, 2017, was modified.

On July 19, 2010, the plaintiff commenced this action against, Davis and 964-966 Myrtle LLC, alleging, that Davis had defaulted on his mortgage by failing to make the payment due October 1, 2009, and all payments due thereafter. Davis filed a form answer, pro se, and thereafter, an answer and counterclaim by his attorney.  Plaintiff agreed to accept pursuant to a stipulation. Myrtle LLC failed to answer the complaint or otherwise appear in the action. In August 2013, filed for summary judgment on the complaint insofar as asserted against Davis, to strike his answer, and for an order of reference. Davis opposed the motion.

On December 17, 2015, the Supreme Court granted the plaintiff’s motion for summary judgment and appointed a referee to calculate the amount due to the plaintiff.  In September 2016, the plaintiff moved to confirm the referee’s report and for a judgment of foreclosure and sale. The defendants opposed the motion and cross-moved to dismiss the complaint.  The defendants sought dismissal of the complaint against Myrtle LLC pursuant to CPLR 3215(c) based upon the plaintiff’s failure to move for leave to enter a default judgment against it within one year of its default in answering.

In an order dated June 14, 2017, the Supreme Court granted the plaintiff’s motion and denied the defendants’ cross motion, finding that the excuse offered by the plaintiff for its failure to timely move for leave to enter a default judgment against Myrtle LLC was reasonable. In a judgment of foreclosure and sale dated June 28, 2017, the court directed the sale of the subject property. The defendants appealed.

A plaintiff establishes its standing in a mortgage foreclosure action by demonstrating that, when the action was commenced, it was either the holder or assignee of the underlying note (see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d 355, 361, 12 N.Y.S.3d 612, 34 N.E.3d 363). “Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation, and the mortgage passes with the debt as an inseparable incident” (U.S. Bank, N.A. v. Collymore, 68 A.D.3d 752, 754, 890 N.Y.S.2d 578; see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d at 361–362, 12 N.Y.S.3d 612, 34 N.E.3d 363; Citimortgage, Inc. v. Laupot, 190 A.D.3d 680, 135 N.Y.S.3d 889).

Plaintiff argued and Court found that by submitting copies of excerpts from the PSA, and its attached mortgage loan schedule, which included the subject mortgage loan, the plaintiff established, prima facie, that, as of July 1, 2006, the plaintiff, as trustee under the PSA, was an assignee of the mortgage loan and owner of the note.  Thus, it had standing to commence this action on July 19, 2010.

In opposition, the defendants failed to raise a triable issue of fact. Their assertions that a subsequent assignment of mortgage was invalid, and that the PSA did not prove the physical delivery of the note, were found irrelevant considering the proof of assignment by the terms of the PSA.

Pursuant to CPLR 3215(c), “[i]f the plaintiff fails to take proceedings for the entry of judgment within one year after [a defendant’s] default, the court shall not enter judgment but shall dismiss the complaint as abandoned … unless sufficient cause is shown why the complaint should not be dismissed.” “The language of CPLR 3215(c) is not,  discretionary, but mandatory, inasmuch as courts ‘shall’ dismiss claims (CPLR 3215[c]) for which default judgments are not sought within the requisite one-year period, as those claims are then deemed abandoned. Failure to take proceedings for entry of judgment may be excused if the plaintiff to demonstrates that it had a reasonable excuse for the delay in taking proceedings for entry of a default judgment and that it has a potentially meritorious action.  The determination is in the sound discretion of the Court.

In this case, the plaintiff served its complaint on Myrtle LLC after which Myrtle LLC failed to answer or otherwise appear in the action. Thus, Myrtle LLC was in default as of August 21, 2010. However, it was not until August 13, 2013, that the plaintiff moved, for summary judgment on the complaint insofar as asserted against Davis, and for leave to enter a default judgment.  In its opposition to the defendants’ cross motion to dismiss the complaint, the plaintiff argued that it had a reasonable excuse for not moving for leave to enter a default judgment within a year of Myrtle LLC’s default. On appeal, the plaintiff abandoned that argument and, for the first time on appeal, alleged that the cross motion was properly denied because the plaintiff had moved for summary judgment in 2013, demonstrating its intent not to abandon this case.  Additionally, the settlement conference delays ended August 2011, two years before August, 2013, when the plaintiff moved, for leave to enter a default judgment.  As far as the FEMA declaration delay, from October 2012 to March 2013, the Court found that vague and unsubstantiated.

The plaintiff’s argument, raised for the first time on appeal, that, by moving for summary judgment and leave to enter a default judgment in August 2013, the plaintiff had “manifest[ed] its intent not to abandon this case” was not supported.  Here,  the plaintiff moved for summary judgment and an order of reference almost two years after the default, when the statutory time within which to enter a default had long since expired, thus it was too late for the plaintiff to “manifest an intent not to abandon the case so as to avoid dismissal of the complaint insofar as asserted against Myrtle LLC pursuant to CPLR 3215(c). 

The many delays that were occurring during this action did not give plaintiff a sufficient argument to avoid noncompliance with CPLR 3215c.   For further information regarding this case, please contact Deborah Gallo at dgallo@friedmanvartolo.com.

On June 29, 2021, by a 5-4 majority the Supreme Court declined to vacate the CDC eviction moratorium.  The majority decision did not opine on their reason for declining to vacate the stay, however Justice Kavanaugh, who joined the majority, drafted a concurrence.  Justice Kavanaugh joined the majority because of his opinion that the remainder of the moratorium, which is scheduled to end on July 31, 2021, is brief and “will allow for additional and more orderly distribution of the congressionally appropriated rental assistance funds” by the Department of the Treasury.  However, he noted that he did agree with the petitioners’ opinion that the CDC had exceeded its authority in issuing the foreclosure moratorium and cautioned that any extension of the stay beyond July 31, 2021, would, in his opinion, require “clear and specific congressional authorization (via new legislation).”

Kavanaugh’s statement is significant as it indicates that, under the right circumstances, he would likely join the minority justices (Thomas, Alito, Gorsuch, and Coney-Barrett) in denying future moratoriums of this type.  The future implications of this decision are unknown at this time, however Kavanaugh’s statement could be read as an implicit invitation to challenge future foreclosure and eviction stays issued by Federal agencies without the explicit authorization of Congress.  For any questions regarding this announcement please contact Richard O’Brien, Esq. at robrien@friedmanvartolo.com or Deborah Gallo, Esq.  at dgallo@friedmanvartolo.com.