UPDATE: On May 7, 2020, Governor Cuomo issued Executive Order No. 202.28 which extended the temporary moratorium on evictions to August 20, 2020, for those facing financial hardship from the COVID-19 crisis.
 

EVICTION AND FORECLOSURE MORATORIUM
 
Currently, and for at least 120 days, public housing landlords and/or buildings with federally backed loans cannot evict their tenants for non-payment of monthly rent. And, as of March 16, 2020, all eviction proceedings in New York City have been suspended indefinitely.
 
Government-backed lenders may not initiate a foreclosure action for at least 60 days and borrowers may request forbearance to delay mortgage payments.
 
Please see the following post on our firm’s COVID-19 Resource Center: CARES Act, Eviction and Foreclosure Moratorium For Public Housing and Government-Backed Loans, for further details.
 
The mortgage forbearance provision of the CARES Act may provide some reprieve to landlords when their tenants stop paying rent. However, the reprieve is limited to “government-backed” mortgages. Other options for relief may be available and should be examined further.
 
FEDERAL PROGRAMS UNDER THE CARES ACT
 
A. PAYCHECK PROTECTION PROGRAM OR “PPP”
 
The PPP program provides loans to businesses with 500 or fewer employees for up to two and half times last year’s average monthly payroll costs, excluding costs over $100,000 on an annualized basis for each employee. On the plus side of this loan, the loan may be forgiven in full. However, in order for the entire loan to be forgiven, the borrower must follow certain caveats including, but not limited to retaining staff and using at least 75% of the loan for payroll. For further details, please see the following post on our firm’s COVID-19 Resource Center: SBA and Treasury Department Issue Further Guidance on the Paycheck Protection Program Loans Which May be Forgiven.
 
B. PAYMENT TAX DEFERRAL PROGRAM
 
If a landlord is not eligible or chooses to not apply for the PPP loan, a landlord may qualify for a payroll deferral program. This program is not a loan but a deferral of taxes which must ultimately be repaid. The Payment Tax Deferral Program defers 6.2% of the payroll tax. The tax must be repaid as follows: 50% must be paid by December 31, 2021, and the remaining 50% must be paid by December 31, 2022.
 
C. PAYROLL RETENTION CREDIT PROGRAM
 
Similarly, to the Payment Tax Deferral Program, a landlord may apply to this program if it has not applied to the PPP program. This program is not a loan. It provides payroll tax credits for businesses that are (a) fully or partially suspended due to government orders limiting commerce, travel or group meetings due to the Coronavirus pandemic, or (b) businesses that have suffered a reduction in quarterly gross receipts of more than 50% compared to the same quarter in 2019.
 
For further details regarding subheadings B and C, please visit CARES Act,
Alternative Financial Relief For Employers If They Do Not Obtain An SBA Payroll Protection Program Loan.
 
D. ECONOMIC INJURY DISASTER LOANS (“EIDL”)
 
Unlike the prior three federal programs, landlords may apply for PPP and EIDL loans. Further, the EIDL program provides grants of up to $10,000 and the grant money does not have to be repaid under any circumstances. The grant may be used for payroll, sick leave, debts, and mortgage payments. For further details, please visit U.S. Senate Committee on Small Business & Entrepreneurship’s The Small Business Owner’s Guide to the CARES Act.
 
NEW YORK CITY PROVIDES RELIEF
 
A. NYC EMPLOYEE RETENTION GRANT PROGRAM
 
The NYC Employee Retention Grant Program provides a grant to small businesses having 1 to 4 employees. Some landlords may be eligible. There are additional qualifications, such as being located within the five boroughs and demonstrating a 25% loss in revenue due to COVID-19. Other qualifications and further discussion may be found on our firm’s COVID-19 Resource Center:
New York City Is Offering Loans And Grants To Small Businesses Affected By The Coronavirus.
 
B. NYC SMALL BUSINESS CONTINUITY LOAN FUND
 
The NYC Small Business Continuity Loan Fund, unlike the NYC Employee Retention Grant Program, is a loan and is applicable to landlords who have up to 100 employees. The loan is a 0% interest loan. The loan must be repaid, but no additional fees will accrue so long as the loan is repaid over a 15-20 year period. The qualifications are similar to those for the NYC Employee Retention Grant Program. More details are found on our firm’s COVID-19 Resource Center: New York City Is Offering Loans And Grants To Small Businesses Affected By The Coronavirus.
 
 WHAT CAN LANDLORDS DO NOW?
 
We suggest that landlords speak to their tenants. Both commercial and residential landlords may want to prepare a written lease amendment and a forbearance agreement, which set forth a plan for the very uncertain future. Please visit our recent post, The Covid-19 Emergency Has Thrown The Real Estate Market Into Disarray, for further details and guidance.
 
 As always, we are available to assist our clients during these uncertain times.