The New York legislature recently passed a bill granting certain eviction and foreclosure protections, among other protections, for residential tenants and homeowners suffering from hardships related to COVID-19. The “COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020” (the Act) was signed into law by the Governor on December 28, 2020, and took effect immediately (and is deemed to have been in full force and effect on and after March 7, 2020). Unless it is extended, the protections under the Act generally will expire on May 1, 2021.
The Act’s eviction protections cover residential tenants (not including people with a seasonal use lease if they have a primary residence to which they can return). The Act’s foreclosure protections are restricted essentially to individual owners or small landlords, as they only apply to actions to foreclose a mortgage relating to residential real property where the property owner or mortgagor is a natural person who owns ten or fewer units (which includes their primary residence, as well as rental units for the remaining units in the count). The protections include, among other things, a general requirement prior to initiating a foreclosure action or eviction proceeding, among other impacted actions, including those filed before the time that the Governor proclaimed a state of emergency in response to the pandemic on March 7, 2020, which remain pending, that the foreclosing party or landlord provide the tenant or owner with a “Hardship Declaration” that allows the individual to attest to certain COVID-19 related hardships. If the individual returns the Hardship Declaration, the landlord or foreclosing party is prohibited, for example, from proceeding with their action until at least May 1, 2021, absent certain limited exceptions.
The Act includes a number of other provisions, such as protections from tax foreclosure. As it relates to lending more broadly, the Act generally prohibits a lending institution from discriminating, with respect to determining whether to extend credit, because a residential real property owner (as described above) has been granted a stay of mortgage foreclosure proceedings or other protections under the Act, and the Act also generally prohibits negative reporting of certain information related to such a property owner to a credit reporting agency.