1. Are mortgage payments suspended for 90 days?
Answer: Yes. Pursuant to Executive Order No. 202.9, Governor Andrew Cuomo has directed banks to grant a forbearance for ninety (90) days on mortgages to individuals and businesses suffering from financial hardship as a result of Covid-19 pandemic. This, however, does not mean that there is a waiver of payments by any means. It just means that there won’t be any late charges assessed or your failure to make the payment will not be reported to the credit bureau.
2. Do I still have to pay my rent?
Answer: Yes, there is no rent-freeze order or directive currently in place. Both businesses and individuals are still required to make their rent payments. However, businesses and individuals should reach out to their landlords and ask if smaller payments can be made or a payment plan can be offered. Some landlords may be willing to accept a smaller rent payment than nothing at all. Also, note that, if you do not pay rent, the landlord has to wait until the courts open up and start accepting filings before they can commence a nonpayment proceeding against you. At this time, the courts are only accepting emergency filings (related to repairs, heat, hot water, etc). Even if the courts were to accept nonpayment proceedings, the 90-day moratorium on evictions will halt any eviction of residential and commercial tenants, as discussed below.
Moreover, if you are a business, check to see if you purchased a business interruption insurance. Some commercial landlords require their tenants to purchase business interruption insurance to cover 12 months of rent in their leases. In the event you did purchase this insurance (or the landlord purchased it on your behalf and you paid the premiums), you would have to review the lease agreement and policy to see whether the insurance policy would cover your losses due to the pandemic.
3. Are evictions suspended by 90 days?
Answer: Yes, pursuant to the “New York State on PAUSE” executive order, which went into effect on March 22, 2010, there is a 90-moratorium on residential and commercial evictions. What this means is that in the event a warrant of eviction was issued by the courts, the City Marshal or Sheriff (outside of New York City) is the only one that can execute on the warrant by changing the locks. This moratorium prevents them from doing just that.
4. I cannot afford this apartment anymore - can I break my lease?
Answer: Depends. You should review your lease and see if it provides for an early termination of the lease (if it does, it generally includes a penalty with a certain notice requirement). Unless the landlord is breaching a warranty of habitability, or you are being constructively evicted, you are not allowed to breach the lease. If you vacate the premises prior to the expiration of the lease, the landlord can hold you responsible for rent through the end of the lease or until the landlord finds another tenant. In the event you cannot afford to remain in the apartment due to the current pandemic, you should reach out to your landlord and see if the landlord will relieve you from the lease with some sort of a penalty. For commercial tenants, review your lease with an experienced attorney to see if you are allowed to terminate the lease under “Good Guy Guarantee” or other theories such as “act of god”, “force majeure”, “frustration of purpose” or “impossibility” based on Covid-19 pandemic.
5. Is there any financial assistance available to small business affected by the Covid-19?
Answer: Yes. New York City is offering some financial assistance to small businesses affected by the pandemic. If you are a small business with four (4) or fewer employees that can demonstrate a decrease of 25% or more in revenue as a result of this pandemic, you may be eligible to receive a grant covering up to 40% of your payroll for two (2) Months, up to $27,000.
Your business must also be in operation for at least six (6) months and have no outstanding tax liens or legal judgments against you. In addition, the city is also making zero interest loans for up to $75,000 available to business with under hundred (100) employees. Likewise, the business must be in operation for at least (6) months and have no outstanding tax liens or judgment against it. Both of these forms of assistance can be applied on the city’s website at: https://www1.nyc.gov/site/sbs/businesses/covid19-business-outreach.page
Information provided herein is not intended to be comprehensive nor should it be construed as legal advice. Should you wish to discuss your options related to the aforementioned issues or any other landlord tenant issues, feel free to contact our firm at 212-729-6920.