Summary of Legislative Relief for Tenants and Mortgage Borrowers in New York State in Response to COVID-19

Set forth below is a summary of the current state of affairs of legislation in New York State in reaction to the coronavirus pandemic impacting (i) tenant eviction proceedings under real estate leases, and the related obligation to pay rent, and (ii) real estate mortgage foreclosure/forbearance proceedings, and the related obligation to pay debt service. This is a rapidly evolving landscape, with new orders and directives being promulgated daily. Tannenbaum Helpern is actively monitoring these orders and directives and we will keep you posted.


  • 90 day moratorium on evictions in New York State for residential and commercial tenants until June 20, 2020 (Executive Order 202.8, issued by Governor Cuomo on March 20).
  • As New York State Courts have suspended the filing of non-essential proceedings until further notice, the consequence is that new and pending non-payment and eviction proceedings will be suspended indefinitely until there is a further order from the Governor and the Courts.
  • The Executive Order does not address the obligation to make rental payments or what will occur with pending or new evictions once the moratorium expires. Late fees and termination rights are also not addressed.
  • There is pending legislation in the New York State Senate (S.B. 8125) and the New York State Assembly (AB 10224) which would suspend rent payments for 90 days from the date of the Act for any (a) residential tenant or (b) small business commercial tenant in New York State that has lost income or has been forced to close its place of business as a result of government ordered restrictions in response to the outbreak of COVID-19. The bills further provide that rent during that 90-day period is “waived” and cannot be collected, nor can late fees be accrued during that period and then later collected. The bills also provide that if a residential or small business commercial lease expires during the 90-day period, the tenant is entitled to an automatic renewal of the lease at the current rent charge. The bills do not prescribe the length of the renewal term. “Small businesses” are defined as businesses that are resident in New York State, independently owned and operated, not dominant in their fields and employ one hundred or fewer persons. In addition, the bills provide that any landlord “who faces a financial hardship as a result of being deprived rent payments for property pursuant to this section shall receive forgiveness on any mortgage payments for such property for ninety days . . . up to the total dollar amount of lost rent.” As with the suspended rent, any landlords qualifying for mortgage payment forgiveness would have their obligations to make such mortgage payments permanently waived. It should be noted that if these bills pass, many commentators expect there to be constitutional challenges.


  • 90 day moratorium on foreclosures in New York State for residential and commercial property owners until June 20, 2020 (Executive Order 202.8, issued by Governor Cuomo on March 20).
  • As the New York State Courts have suspended the filing of non-essential proceedings until further notice, the consequence is that new and pending foreclosure proceedings will be suspended indefinitely until there are further orders from the Governor and the Courts.
  • Governor Cuomo issued Executive Order 202.9, which directs the Department of Financial Services (DFS) to “ensure under reasonable and prudent circumstances that any licensed or regulated entities provide to any consumer in the State of New York an opportunity for the forbearance of payments for a mortgage for any person or entity facing a financial hardship due to the COVID-19 pandemic” and directs DFS to promulgate emergency regulations regarding forbearance applications. Executive Order 202.9 also provided that any bank that is subject to the jurisdiction of the DFS will be deemed to be engaging in an “unsafe and unsound business practice” under New York Banking Law if the bank fails to grant a 90-day forbearance to any person or business with a financial hardship as a result of the pandemic.
  • To date, DFS has promulgated regulations providing relief for residential mortgages only. The DFS regulations provide relief for certain residential borrowers who can demonstrate financial hardship from COVID-19, including mandating that certain New York-regulated financial institutions grant these borrowers loan forbearances.
  • If the pending legislation referenced above under the Evictions heading is enacted, it would likewise impact commercial mortgages, as described above.
  • The United States CARES Act provides forbearance relief to residential owners of properties (i.e., properties designed principally for the occupancy of one to four families) encumbered by federally backed mortgages, such as Fannie Mae and Freddie Mac. The Act also provides conditional forbearance relief to multifamily owners of properties (i.e., five or more units) encumbered by federally backed multifamily mortgages. If the multifamily owner was current on its mortgage payments as of February 1, 2020 and is experiencing financial hardship due to COVID-19, it may request forbearance for up to 90 days. Such owners may submit their request for forbearance until the earlier of the end of the COVID-19 emergency or December 31, 2020. If the multifamily borrower is granted the forbearance under the CARES Act, it may not evict or charge late fees or penalties to tenants during the forbearance period.
  • Additionally, the CARES Act prohibits landlords from seeking to recover possession of a rental unit, or charging fees, penalties or other charges related to nonpayment of rent, for 120 days from the passage of the Act if the landlord’s mortgage is insured, guaranteed, supplemented or assisted in any way, in connection with a HUD program, or by Fannie Mae, Freddie Mac, or where the property participates in a covered housing program under the Violence Against Women Act or the rural housing voucher program. In addition, a covered landlord may not issue a notice to vacate until after the 120-day period. The CARES Act contradicts certain guidelines issued by Fannie Mae and Freddie Mac earlier in the COVID-19 emergency. It is expected that Fannie and Freddie will update their guidelines to conform to the CARES Act.

For more information on the topics discussed in this update, please contact any member of Tannenbaum Helpern’s Real Estate Law practice or your usual contact at the firm.

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04.02.2020  |  PUBLICATION: Note From The Real Estate Group  |  TOPICS: Real Estate  |  INDUSTRIES: Real Estate

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