As April rent came due, we armed you with what New York landlords and property managers need to know to formulate their business strategy. (Click to see Part 1.) Payment of rent on April 1 turned out to be a mixed bag, with some properties experiencing a high level of payment or partial payment and some not. Payment of May rent is expected to be worse than April.
In this Part 2, we update you as the pandemic continues.
Moratorium on Evictions
- New York's March 20 executive order from Governor Cuomo remains in effect. This order places a moratorium on evictions for residential and commercial tenants. Importantly, it does not exempt tenants from paying rent.
- The moratorium initially blocked the filing of new nonpayment or eviction cases until April 19. Governor Cuomo extended the moratorium on filing of nonpayment or eviction cases to May 7.
- Governor Cuomo extended the state's stay-at-home order to May 15. This extension does not affect the moratorium on evictions, which does not expire until June 20. Click here for further details that we reported in Part 1.
Tenant Access to Capital
- CARES Act. Funds made available to small businesses by Congress through its CARES Act forgivable loan program are now spoken for (click here for a full summary of the CARES ACT). All eyes are now on Congress for the next round of stimulus funds, which we anticipate will be approved by the president in the upcoming days.
- As of yesterday, the Senate passed the Paycheck Protection Program and Health Care Enhancement Act. This legislative package provides additional funding for the recently created Paycheck Protection Program (PPP) and the Economic Injury Disaster Loans to replenish the funds that ran out earlier this week for small businesses. The House is expected pass the bill on Thursday, April 23, and President Trump signaled he would sign the Act into law. Click here for more details.
- New York Economic Relief. Updates regarding small business funds in New York are available here.
- New York City
- Because of the overwhelming interest in the NYC Small Business Continuity Loan Fund, the City has paused application intake.
- The NYC Employee Retention Grant Program is no longer accepting applications.
- More information and resources are available to you here.
- New York City
Bankruptcy and Lease Termination
- Landlords should be preparing for the inevitable tenant bankruptcy filings. Resolving the issue of possession with a tenant before it files a bankruptcy petition can give a landlord a significant advantage. Many landlords will have questions about applying cash security deposits and drawing letters of credit. Consult a real estate and/or bankruptcy lawyer.
- If the tenant has already filed its bankruptcy petition, the automatic stay is in place and prohibits most landlord self-help actions.