As the devastating economic impact caused by the COVID-19 pandemic continues, landlords are left to wonder when and how they are going to be able to enforce their rights to collect rent from their tenants. The answers to these questions are starting to come into focus.
Executive Order 202.28 issued by Governor Cuomo on May 7, 2020 has now placed certain obligations upon a landlord or property owner in order to take legal action to collect outstanding rental arrears through at least August 19, 2020. In order to start a non-payment proceeding during the moratorium, you must first determine if a tenant is eligible for unemployment benefits or insurance, or is facing financial hardship due to the COVID-19 pandemic. This burden now obligates the landlord to ascertain the financial situation of their tenant(s) to determine whether legal action may be taken.
It is important that you formulate a strategy as to how you are going to address delinquent tenants. New York real estate lawyer can assist you in determining if a tenant has met the criteria required by the Executive Order and implement procedures to address tenant defaults, and take the appropriate legal steps to resolve these issues that are tailored to your needs.
The apparent prohibition of service of process for “non-essential” matters continues to remain in effect through May 28, 2020 and the court is still not permitting the purchase of new index numbers except in very limited circumstances. It is important to begin this process now so that you will be in the best position to avail yourself of all available legal remedies. As soon as we are permitted to serve rent demands and purchase index numbers from the court, you want to be in a position to proceed without delay, especially if a tenant owes rent and does not qualify for the exemptions in the Executive Order.
New York real estate lawyer recommends that a notice be sent now to any residential or commercial tenant(s) who have accrued rental arrears during the pandemic. Based upon the fact that the Executive Order has created a temporary limitation as to who the landlord may initiate legal action for non-payment of rent, disclosure of the tenant’s employment and financial information is a necessity in order for the landlord to comply with the Executive Order. Almost all leases contain language that obligates the tenant to comply with all federal, state, and local laws and regulations that affect the building and/or their apartment. We believe that it is in your best interest to have this notice be sent by your New York real estate lawyer so that the tenant(s) takes it seriously and it increases the likelihood the tenant(s) will fully comply.
While each individual tenant(s) financial situation is different, we believe there is certain basic financial information you should be entitled to obtain in order to ascertain the basis for the tenant’s failure to pay rent. Information such as correspondence from an employer, bank statements, pay stubs, proof of filing for or receipt of unemployment benefits are just some of the proof that should be submitted by a delinquent tenant upon request.
This notice should be sent even if the tenant(s) owed arrears that pre-date the pandemic, as their failure to make current payments will likely affect your ability to bring a nonpayment proceeding for those arrears as well. There is a possibility that further legislation may be passed affording tenants additional rent relief and/or defenses. Not only is the tenant’s financial information necessary in determining whether you can initiate a proceeding against a particular tenant during the moratorium, but this information may also serve to avoid unnecessary delays thereby expediting the proceeding once the case is heard by the court. Therefore, the tenant’s financial situation will greatly impact the prosecution of the non-payment proceeding and the time it will take to obtain a judgment from the court.
The legal landscape of this pandemic continues to evolve. New York real estate lawyer is ready to provide you with specifically tailored advice to meet your specific needs and ensure that you are prepared to succeed in this environment. Together we can explore ways to expedite your ability to collect rent during these uncertain times. Call at (212) 371-6500 or email us.