New York State Extends Eviction & Foreclosure Moratorium until August 31, 2021

As Mom and Dad used to tell us (just before slapping our hands away from that plate of fresh-out-the-oven, soft and gooey oatmeal-chocolate chip cookies -- curses!), good things come to those who wait.  For New York tenants and landlords the considerable wait for relief from rental arrears may be just around the corner.  I am referring to the long-promised, $2.4 billion dollar New York State program to help tenants and landlords by paying back rent directly to landlords.

This program will be administered by the Office of Temporary Disability Assistance (“OTDA”).  The OTDA, which for months has posted nothing online beyond a one paragraph, place holding blurb about the program, has finally put some meat on the bones.  OTDA recently provided new information on what it has dubbed, the Emergency Rental Assistance Program (“ERAP”).

You can view OTDA’s full overview of the ERAP HERE.

A Frequently Asked Questions (“FAQ”) is also available and provides some of the most practical information about how the ERAP application process will actually work. 

OTDA says that it will be accepting ERAP applications “soon”.  Based on the context of the OTDA’s statements, we believe that applications will be taken exclusively online.

For the first 30 days, the ERAP will only be open to certain, prioritized, at-risk groups of tenants; afterwards, ERAP will be open to all eligible applicants.

OTDA’s online overview, FAQ and checklist documents pose three critical, immediate issues for landlords that we want to highlight for you.

First, there’s likely to be a mad rush to apply.  After the 30-day priority period, applications will be taken on a first-come, first-served basis.  As such, landlords should be ready to promptly apply for ERAP payments at the first opportunity.

We can’t emphasize how important promptly applying may be.  We anticipate significant demand for ERAP payments given that many tenants haven’t paid rent in over a year.  Although there is nothing to be done at the moment, landlords should be ready to move quickly when OTDA opens the ERAP for applications.  The funding pool is finite.  Based on the popular reporting, there does not seem to be current plans to replenish that funding.

Second, OTDA’s FAQ states that landlords are allowed to start the ERAP applications for their eligible tenants.  However, both landlords and its tenants must complete different parts of the application.  If a landlord starts an application, OTDA will email or text the tenant instructing them to complete their portion of the application.

Landlords are allowed (and should, as a practical matter, to expedite the process) help their tenants complete their parts of the application, such as their amount of arrears.

Tenants and landlords must provide certain confidential information as part of the application and must sign the application (likely via an electronic signature of some sort) indicating agreement with information included in the application.  OTDA states that neither side will be able to view the other’s confidential information.

Third, landlords must provide certain documentation and agree to specified conditions in order to receive the direct ERAP payments.

In terms of documents, landlords must provide:

1. Completed W-9 tax form;
2. Executed lease with the tenant-applicant, or if no written lease, a cancelled check, evidence of funds transfer or other documentation of last full monthly rent payment;
3. Documentation of rent due from tenant (e.g. ledger or, we hope, the statutorily-mandated 5-day notice of failure to pay rent, etc.) or attestation on application; and
4. Banking information to allow payments to be directly deposited into the landlord’s account.

Landlords must certify that the information provided, including the amount of rental arrears owed, is accurate and does not duplicate a payment received from another program.

A landlord’s receipt of ERAP payments is conditioned on it agreeing to abide by the following terms:

1. The payment satisfies the tenant’s full rental obligations for the time period covered by the payment (assumedly, even if the payment doesn’t actually equal the amount of arrears);
2. Waiving any late fees due on any rental arrears covered by the payment;
3. Not increasing the monthly rental amount above the monthly amount due at the time of application for ERAP assistance for months for which rental assistance is received and for one year from receipt of the ERAP payment; and
4. Not evicting the household on behalf of whom the payment is made for reason of an expired lease or holdover tenancy for one year from receipt of the ERAP payment.

We are monitoring developments and will post updates in this space as OTDA issues more specific guidance.  Of course, we are happy to assist you with any questions or if require assistance with the ERAP.

Rejoice, Empire State landlords and tenants!  The fresh-baked cookies of sweet, sweet rental relief are about to come out of the oven (and Momma and Pappa Albany seem ready to pass them out before dinner).

UPDATE MAY 17th, 2021:

As Claude Rains’ Inspector Louie Renault said to Rick Blaine in Casablanca, I’m shocked. SHOCKED!  To learn that the Governor signed a law extending the eviction and foreclosure moratoria until August 31, 2021.

Although the New York State Legislature’s website and the popular press didn’t report it, the bill was apparently signed on, May 4, 2021.  Regardless, it is effective retroactively to May 1, 2021.  Thus, there is no break in the general prohibition on evicting or foreclosing on individuals who have submitted Hardship Declarations.

There are no substantive changes made by the new legislation, other than extending the moratoria.

On a related note, there’s finally movement with the $2.4 billion dollar, Emergency Rental Assistance Program (“ERAP”), which appears poised to start accepting applications in the near term.  The ERAP is supposed to start distributing directly to landlords, by the end of May, money to pay rental arrears.  This program is being administered by the Office of Temporary and Disability Assistance (“OTDA”).  The OTDA recently posted new information, frequently asked questions and guidance checklists for the ERAP.  OTDA indicates that it is developing an online application portal for tenants and landlords.  I have recently posted an extensive update on the ERAP.  In addition to that post, you may view OTDA’s ERAP overview and FAQ, including eligibility criteria, online at:   https://otda.ny.gov/programs/emergency-rental-assistance/#overview.

Given the dire financial circumstances that many Empire State landlords are facing, the $2.4 billion in already-appropriated state and federal money is needed right now.  OTDA needs to ramp up the ERAP ASAP (yeah, the acronyms are a bit much, I know).  While ERAP won’t immediately remedy those circumstances, to paraphrase Rick Blaine, I think it could at least be the beginning of a beautiful friendship. 

This article is intended to be used for informational purposes only. Legal advice is neither implied by the author nor should be inferred by the reader. If you have specific legal questions, you should consult with your attorney.

Jeffrey Sculley, who may be reached at jsculley@cmrlaw.com, is an attorney and counselor at law focusing his practice on representing commercial and residential landlords; providing backroom human resource and employment support to businesses and not-for-profits; representing clients in appealing adverse trial-court and administrative decisions; logo and brand development and trademark protection; and representing clients in all types of administrative, regulatory and compliance matters, before governmental agencies and administrative hearing officers and law judges.