Governor Signs New Eviction And Foreclosure Moratorium

A new moratorium will protect tenants, landlords and homeowners in New York State from eviction or foreclosure through January 15, 2022.

Governor Kathy Hochul signed the moratorium into law on Thursday, September 2, the day after the State Legislature convened in an emergency session to address the August 31 expiration of the prior state moratorium and the U.S. Supreme Court striking down the federal eviction moratorium that was imposed by the Centers for Disease Control and Prevention. The governor’s office calls the new moratorium the “strongest eviction protections in the nation for those facing hardship due to COVID-19.”

The law extends the protections created for residential tenants by the Tenant Safe Harbor Act in June 2020. In order to qualify, tenants must be suffering financial hardship as a result of the pandemic and submit a “hardship declaration” form. Landlords can still evict tenants if they create safety or health hazards for other tenants or intentionally damage property, the governor’s office noted.

The new law allows landlords to request a court hearing if they believe their tenants have not actually suffered financial hardship. The old moratorium did not guarantee that option but then the U.S. Supreme Court ruled in August in favor of landlords who argued that their due process rights were being violated. The new law conforms with the court decision.

The law also expands the state’s Emergency Rental Assistance Program, which has distributed $1.2 billion through August 31 including more than $300 million in direct payments to more than 23,000 landlords, according to the governor’s office. Ms. Hochul urged state residents struggling to pay their rent to apply. While an application is pending, tenants are automatically protected from eviction. Tenants who qualify for assistance will receive a year of eviction protection. The application is available at otda.ny.gov/programs/emergency-rental-assistance.

An additional $125 million is allocated under the new law for rent relief for tenants with a household income between 80 and 120 percent of the area median income. In Suffolk County, that is between $101,300 and $151,900 for a family of four.

Another $125 million is designated for landlords whose tenants have refused to participate in the emergency rental assistance program, including former tenants who moved out while still owing rent payments.

Homeowners and landlords who own 10 or fewer residential units can file hardship declarations with their lenders or a court to stop a foreclosure. Small businesses with fewer than 100 employees are protected from eviction if they file a declaration.

“These steps will alleviate the crisis facing vulnerable New Yorkers who are suffering through no fault of their own,” Ms. Hochul said in a statement announcing the bill’s enactment.

New York State Senator Anthony Palumbo, whose district encompasses the East End, condemned the new moratorium in a statement.

“The extension of the eviction moratorium combined with the state’s complete failure to adequately disburse billions in federal rental assistance funds is an immeasurable blow to New York’s struggling property owners and tenants,” Mr. Palumbo said. “Once again, Albany politicians are putting radical policy proposals ahead of good public policy initiatives that would actually help New Yorkers get through these difficult times.”

He pointed out that businesses are open in New York State, and he said landlords are in business as well: “the business of managing property, maintaining property and collecting rent so tenants can reside comfortably.” He questioned when landlords will be able to get back to business the way “everyone else” has.

“Extending the moratorium simply kicks the problem down the road, instead of providing a solution to these hardships,” Mr. Palumbo continued. “If the Democrats would let evictions proceed and provide assistance for tenants in the courtrooms by the Office of Temporary and Disability Assistance (who already is charged with helping tenants), we would keep tenants in their units, and get property owners paid. That’s a win-win, but, unfortunately, the new Governor wants to show off her progressive chops and effectively cancel rent. It’s appalling and will devastate the real estate market.”