Updated: COVID-19 Related Moratorium on Foreclosures and Evictions
In connection with the COVID-19 distancing recommendations and mandates, many businesses, and in some cases entire industries, have suffered a significant drop in business or forced shutdowns resulting in layoffs and closings. In response, the federal government and many state and local authorities have implemented, among other things, temporary emergency restrictions on foreclosures and evictions. Below is a summary of the federal restrictions and state and local government restrictions for:
Note, the guidance and restrictions are very fluid and evolving as we learn more about the COVID-19 virus and what needs to be done to hopefully prevent the spread of this virus. Thus, the situation has been and continues to have the potential to change on a daily basis. Further, please note, in many instances the directives do not make a distinction between commercial and residential foreclosure proceedings (though as noted some expressly include commercial).
As we receive more information, we will provide updates.
FEDERAL GOVERNMENT—Temporary Residential Foreclosures and Eviction Moratorium
On March 25, 2020, the United States Senate passed H.R. 748, which is the "Coronavirus Aid, Relief, and Economic Security Act" (the "Act"). The Act provides mortgage, foreclosure, and eviction relief for certain residential and multi-family borrowers with Federally-backed mortgages, subject to various restrictions. The Act was approved by the United States House of Representatives on Friday, March 27, 2020 and was signed by President Trump on March 27, 2020. Three sections of the Act restrict actions (under certain conditions) lenders and servicers of Federally-backed mortgage loans may take and may provide certain relief to the related borrowers and even tenants.
- Section 4023 applies to multi-family loans with borrowers who attest – and can document – that they are experiencing hardship due to COVID-19. A multi-family borrower is a borrower of a mortgage loan secured by a lien against a multifamily building with 5 or more dwelling units. Affected borrowers may request forbearance for one, 30-day period. Upon request, that period can be extended for two, additional 30-day periods. An affected borrower who accepts forbearance may not, during the forbearance period, evict tenants because of late-rent or charge late fees.
- Section 4022 applies to residential borrowers who attest they are experiencing financial difficulties related to the COVID-19 crisis. Affected borrowers may request forbearance (g., a suspension of payments) for one, 180-day period. At the borrower's request, forbearance may be extended for an additional 180-day period. Section 4022 prohibits servicers from initiating or acting on foreclosure and eviction proceedings through May 17, 2020 (i.e., a period of 60 days).
- Finally, Section 4024 establishes a 120-day moratorium on residential evictions, whose mortgages are Federally-backed.
Previously, on March 18, 2020, the U.S. Department of Housing and Urban Development (HUD) issued a "Foreclosure and Eviction Moratorium." Effective immediately, "[p]roperties secured by FHA-insured Single Family mortgages are subject to a moratorium on foreclosure for a period of 60 days. This moratorium applies to the initiation of foreclosures and to the completion of foreclosures in process. Similarly, evictions of persons from properties secured by FHA-insured Single Family mortgages are also suspended for a period of 60 days. In addition, deadlines of the first legal action and reasonable diligence timelines are extended by 60 days."
STATE GOVERNMENTS — Restrictions
On March 13, 2020, the Alabama Supreme Court issued an order suspending, "[a]ll in-person proceedings in all state and local courts" through April 16, 2020. The order does "not affect courts' consideration of matters that can be resolved without in-person proceedings." Although the order does not specifically address eviction or foreclosure proceedings, it is likely to delay them.
At this time, we are not aware of any executive orders or other specific restrictions on commercial foreclosures and evictions in Alabama.
On March 25, 2020, the Governor of California announced 90-day mortgage payment relief during the COVID-19 crisis. Various financial institutions have agreed that they will not "initiate foreclosure sales or evictions, consistent with applicable guidelines." Details regarding the program are not currently available. The announcement does not distinguish between commercial and residential properties.
Previously, on March 16, 2020, the Governor issued an executive order requesting that lenders pause commercial and residential foreclosures and evictions related to COVID-19. Specifically, the order states:
Financial institutions holding home or commercial mortgages, including banks, credit unions, government-sponsored enterprises, and institutional investors, are requested to implement an immediate moratorium on foreclosures and related evictions when the foreclosure or foreclosure-related eviction arises out of a substantial decrease in household or business income, or substantial out-of-pocket medical expenses, which were caused by the COVID-19 pandemic, or by any local, state, or federal government response to COVID-19.
The order also authorizes local governments to enact restrictions on commercial and residential evictions and foreclosures. Several cities have done so, including Los Angeles and San Francisco.
On March 15, 2020, the mayor of Los Angeles issued an order suspending residential evictions. The order states, in pertinent part:
Finally, I hereby order that no landlord shall evict a residential tenant in the City of Los Angeles during this local emergency period if the tenant is able to show an inability to pay rent due to circumstances related to the COVID-19 pandemic. These circumstances include loss of income due to a COVID-19 related workplace closure, childcare expenditures due to school closures, health care expenses related to being ill with COVID-19 or caring for a member of the tenant’s household who is ill with COVID-19, or reasonable expenditures that stem from government-ordered emergency measures. Nothing in this subsection shall be construed to mean that the tenant will not still be obligated to pay lawfully charged rent. Tenants will have up to six months following the expiration of the local emergency period to repay any back due rent. Tenants may use the protections afforded in this subsection as an affirmative defense in an unlawful detainer action. This subsection shall remain in effect during the pendency of the local emergency period.
The order does not apply to commercial foreclosures or evictions.
On March 13, 2020, the mayor of San Francisco issued an executive order, "imposing a temporary moratorium on eviction for non-payment of rent by residential tenants directly impacted by the COVID-19 crisis." The order does not apply to commercial foreclosures or evictions.
District of Columbia
On March 13, 2020, the Superior Court of the District of Columbia advised that it, "will suspend evictions of all tenants and foreclosed homeowners" through May 1, 2020.
On March 15, 2020, the Superior Court of the District of Columbia ordered that all, "non-priority matters" are postponed until May 1, 2020. Affected proceedings include all "Landlord and Tenant," "Mortgage Foreclosure" and "Housing Court" matters. The order makes no distinction between residential and commercial foreclosures.
On March 17, 2020, the Florida Supreme Court issued an order directing lower courts to "reschedule, postpone or cancel all non-essential and non-critical proceedings and events unless the chief judge determines that such other specific proceedings or events can be effectively conducted remotely…without the necessity of in-person court appearances." Although the order does not specifically address eviction or foreclosure proceedings, it is likely to delay them.
At this time, we are not aware of any executive orders restricting commercial foreclosures or evictions on a statewide basis in Florida.
On March 12, 2020, the Miami-Dade Police Department advised that it has, "temporarily suspended all eviction activities until further notice." There is no written order stating as such at this juncture. The directive does not specify whether it applies to commercial or residential evictions.
During a press conference on March 16, 2020, the Orange County Sheriff John Mina advised that the office has, "temporarily suspended all eviction activities until further notice." As before, there is no written order stating as such at this juncture. The directive does not specify whether it applies to commercial or residential evictions.
On March 17, 2020, the Illinois Supreme Court ordered that, "[a]ll non-essential court matters and proceedings should be continued or, where possible, conducted remotely via telephone or video or other electronic means." Although the order does not specifically address eviction or foreclosure proceedings, it is likely to delay them.
On March 20, 2020, the Governor issued an Executive Order suspending residential evictions until the declared state of disaster ends. It does not apply to commercial properties.
On March 13, 2020, the Circuit Court of Cook County announced that, "no orders for an eviction or foreclosure will be entered during [a] 30-day period" beginning March 17, 2020 and continuing through April 15, 2020.
On March 14, 2020, the Cook County sheriff's office announced that it has, "suspended all court-ordered evictions for the next 30 days."
Neither order distinguishes between commercial and residential properties.
On March 23, 2020, Governor Laura Kelly issued an executive order limiting residential foreclosures. It does not apply to commercial properties.
The order also rescinds the Governor's March 17, 2020 executive order, which originally prohibited all commercial foreclosures and evictions through May 1, 2020.
On March 13, 2020, the Kentucky Supreme Court issued an Order suspending most eviction proceedings through April 10, 2020. The Order does not distinguish between commercial and residential evictions.
On March 25, 2020, the Governor of Kentucky signed an executive order banning residential foreclosures and evictions for the duration of the COVID-19 pandemic.
On March 18, 2020, the Michigan Supreme Court ordered that, with some exceptions, all "civil and business court matters, including trials, must be conducted remotely using two-way interactive video technology or other remote participation tools or they must be adjourned until after April 3, 2020." Although the order does not specifically address eviction or foreclosure proceedings, it is likely to delay them.
On March 20, 2020, the Governor issued an executive order suspending most residential evictions through April 17, 2020. The Order does not apply to commercial properties.
On March 13, 2020, the 36th District Court limited its docket to certain high priority mattes (e.g., criminal bench trials) and adjourned "all civil…matters scheduled through Sunday, April 5, 2020." See Order. This order has been reported as an "immediate moratorium on evictions." The order does not specify whether it applies to commercial or residential evictions.
On March 13, 2020, the Minnesota Supreme Court entered an order suspending certain district court proceedings through March 30, 2020, including unlawful detainer eviction hearings and mortgage foreclosure hearings. See case priority category definitions. Expedited eviction hearings are unaffected by the order. The order does not distinguish between commercial and residential proceedings.
Governor Walz also entered an executive order on March 23, 2020, suspending all residential eviction filings indefinitely, except eviction actions based on resident safety. The executive order further bans landlords from terminating residential leases during the emergency period or executing writs for recovery. On its face, the order appears to suspend executing writs of recovery for both residential and commercial buildings.
Governor Walz’s order also requests institutions implement a moratorium on pending and future home mortgage foreclosures resulting from a borrower’s loss of income or increase in medical expenses from COVID-19. The order does not address commercial foreclosures.
On March 22, 2020, the Missouri Supreme Court entered an order suspending, "all in-person proceedings in all appellate and circuit courts – including all associate, family, juvenile, municipal, and probate divisions" through April 3, 2020. Although the order does not specifically address eviction or foreclosure proceedings, it is likely to delay them. The Supreme Court updated the order on March 22, 2020.
At this time, we are not aware of any executive orders restricting commercial foreclosures or evictions on a statewide basis in Missouri.
On March 19, 2020, the Circuit Court of Jackson County ordered that all evictions would be suspended through April 18, 2020. Although it does not explicitly state as such, it appears the order is limited to residential properties.
On March 15, 2020, the State of New York Unified Court System issued a memorandum suspending, "all eviction proceedings and pending eviction orders…statewide until further notice." The order does not discuss foreclosures. Nor, does it distinguish between commercial and residential proceedings.
On March 19, 2020, Governor Andrew Cuomo announced that the Department of Financial Services issued a new directive to New York State mortgage servicers to provide a "90-day mortgage relief to mortgage borrowers impacted by the novel coronavirus." The directive includes:
- Waiving mortgage payments based on financial hardship
- No negative reporting to credit bureaus
- Grace period for loan modification
- No late payment fees or online payment fees
- Postponing or suspending foreclosures
Formal guidance later issued by the Department of Financial Services makes clear that these directives, "do not apply to any commercial mortgage" or other loans not discussed.
On March 19, 2020, the Supreme Court, New York County, ordered that "foreclosure auctions are postponed" and "foreclosure conferences will be administratively adjourned." The order makes no distinction between residential and commercial foreclosures.
On March 20, 2020, Governor Cuomo issued an executive order that there, "shall be no enforcement of either an eviction of any tenant residential or commercial or a foreclosure of any residential or commercial property for a period of ninety days."
On March 22, 2020, Chief Administrative Judge Lawrence K. Mark issued an order that, "effective immediately and until further order, no papers shall be accepted for filing by a county clerk or a court in any matter of a type not included on the list of essential matters attached as Exh. A." Foreclosures and evictions are not included on that list.
Together, these orders implement a moratorium on both commercial and residential foreclosures and evictions.
On March 13, 2020, the Tennessee Supreme Court issued an Order suspending all in-person hearings through March 31, 2020 that covers foreclosure and eviction proceedings. It does not distinguish between commercial and residential actions.
On March 19, 2020, the Supreme Court of Texas issued an order suspending residential eviction proceedings through April 19, 2020. It does not apply to commercial properties.
At this time, we are not aware of any executive orders restricting commercial foreclosures or evictions on a statewide basis in Texas. However, the counties in which Austin, Dallas and San Antonio are located have imposed emergency restrictions on foreclosures. Some of them include commercial properties.
On March 17, 2020, Travis County issued an order that, "[n]o eviction settings (both residential and commercial) will be held until after May 8, 2020. No writs of possession will be issued by a Justice Court until May 13, 2020."
On March 18, 2020, Dallas County issued an order advising justices of the peace to, "suspend eviction hearings and writs of possession for at least the next 60 days to prevent renters from being displaced and to prevent the potential spread of COVID-19." The order makes no distinction between residential and commercial foreclosures.
On March 18, 2020, Bexar County issued an order that, "Bexar County rental property owners temporarily suspend evictions for at least the next 30 days to prevent renters from being displaced due to the public health emergency," and that "foreclosure proceedings be temporarily suspended for at least the next 30 days to prevent the displacement of occupants." The order makes no distinction between residential and commercial foreclosures.