COVID-19: No Evictions During Emergency

In light of the impacts from COVID-19 and the uncertainty related to its effect on business, we have seen the region quickly adjust to a new business reality. Both private industry and government have signaled they will work quickly to mitigate against the impact of slowdown in the wake of these changes. State, county and municipal governments have taken a number of measures to protect their residents. 

On Monday, March 16, 2020, the State of New Jersey Assembly passed Bill A-3859 authorizing the Governor to issue an Executive Order suspending all residential evictions and foreclosures during the public health emergency.  The identical Senate Bill S-2276 was passed on March 19, 2020. 

On March 19, 2020, immediately after the bill passed the Legislature, Governor Murphy signed the legislation into law, and issued Executive Order 106, as part of a number of measures meant to protect residents during the crisis. The Executive Order provides residential tenants relief from eviction and residential homeowners relief from foreclosure. During this time, all terms and conditions of the original leases and mortgages remain in full force and effect.

The Executive Order mandates that no lessee, tenant or homeowner may be removed from a residential property as a result of an eviction or foreclosure proceeding.  This remains in effect until up to two months after the end of the current emergency.  The Executive Order does not preclude foreclosure actions or evictions from being initiated or continued.  However, it precludes the enforcement of any judgment that is obtained unless the Court determines that enforcement is necessary in the interest of justice.  The legislation and the Executive Order do not address commercial properties and commercial tenants.   

The Department of Housing & Urban Development, Fannie Mae and Freddie Mac have announced they will also be suspending foreclosures and evictions for at least sixty (60) days. Similarly, on March 20, Governor Andrew Cuomo of New York announced a 90-day moratorium on evictions for residential and commercial tenants, meaning no one can be evicted in New York state until at least June 20th. The announcement amplifies and strengthens the moratorium already in place through the court system.  These actions are a few of the many that have been adopted since the declaration of the State of Emergency in the wake of the current public health situation.  Owners of at least 150,000 rental units in New York City and the Real Estate Board of New York (REBNY), New York City’s leading real estate trade association, also published an open letter voluntarily pledging that no warrants of eviction would be executed for the next 90 days, except for life, health and safety issues.

If you have questions about how these measures might affect your rights as a landlord or the holder of a mortgage, contact Gerard D. Pizzillo, Associate in the Commercial Real Estate and Redevelopment Group at  Genova Burns LLC for further details.