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The Upstate NY Landlord's Guide to Evictions During Covid-19

The Upstate NY Landlord's Guide to Evictions During Covid-19

On March 7, 2020, New York Governor Andrew Cuomo signed executive order #202 declaring a disaster emergency in the state of NY.  Since that initial order, Cuomo has signed subsequent Covid-related executive orders at the pace of roughly 1 every 3 daysfor most of the year, with no signs of slowing down.  In fact, as of the writing of this article, that pace seems to be accelerating as we're entering the "2nd Wave" of Covid, just in time for the holidays.  

This article breaks down everything a residential landlord in Upstate New York needs to know about handling non-paying tenants during Covid, particularly those in the Albany Capital Region.  Please be reminded that by the time you finish reading this article, it's highly likely another executive order will have been signed that nullifies this entire article, so consider yourself warned.  

DISCLAIMER: I'm not a lawyer, and this article is NOT legal advice in any way.  I'm just a licensed property manager and landlord in New York State, and below are my interpretations, opinions, and experience as it relates to tenant protections due to Covid.  Please consult with your attorney before taking any action as a result of reading this article! 

Why Everyone is Clueless About Evictions Right Now

As a landlord and property manager, here's what happens in our company each time one of these orders is signed: 

  1. Slam the brakes on operations and read the order (which is written in legal-ese and usually references dozens of prior orders)
  2. Interpret the order as best we can
  3. Make a bunch of calls to our attorneys, local landlords, and fellow property managers to get their interpretations on the order
  4. Do a Zoom call or two with the local landlord associations and attorneys to gain a consensus on what the order means
  5. Determine how it affects our current company policies and procedures
  6. Write up and distribute the new policies and memos to ensure compliance
  7. Determine how it may affect any ongoing tenant cases and figure out if we need to change strategy

And just when we think we've figured it out, a new order is signed that nullifies half of what we just worked on, and the process starts over.  Clearly, it's been a challenging year to get anything done that's not related to Covid.  

Yet as frustrating as all that may be, an even bigger issue is that the courts and municipalities are equally confounded by the mountain of executive orders and mandates rushing by them each week.  Without the assistance of legal guidance from the State and Chief Judge Marks (which has been spotty to say the least), local judges are doing their best to interpret the intent of these orders in their courts, but every judge in every court seems to have a slightly different interpretation, leading to different outcomes to identical cases in the courtroom.  

Some courts are still not hearing tenant cases, while others have been for months.  Some are still not issuing warrants while others are.  This inconsistency has made it practically impossible for a landlord to form solid policies and procedures that adhere with court practices, and its extremely difficult forming strategies for dealing with problem tenants.  

Landlord and Tenant Ethics in the Age of Covid

Despite how the media and NY politicians tend to portray landlords, the vast majority of landlords and property managers we encounter have gone out of their way to be accommodating to truly Covid-affected tenants, as they should.  Many have been voluntarily deferring rent, forgiving rent, waiving fees, and some even providing food and supplies.  

Yet during this time of constant media attention paid to Covid-related tenant-causes, an unfortunate but predictable side-effect has emerged of unethical tenants that are not Covid-affected attempting to claim protections reserved for those that are Covid-affected.  In fact, our experience thus far has been that for roughly every 4 tenants that attempt to claim to be Covid-affected, only 1 is willing to provide the requisite evidence when prompted.  

Providing Proof of Being Covid-Affected

This unfortunate situation of crying wolf has caused landlords to become understandably skeptical of practically every tenant Covid claim, particularly for tenants who were already causing problems prior to Covid.  It is our belief that tenants that have been financially affected by Covid should absolutely be given every opportunity to work out agreeable terms with their landlords during Covid and remain in their homes regardless of any legal obligation, provided that the tenants can provide evidence of their changed financial situation due to Covid.  

This evidence is easy to provide and can be in the form of bank statements, W2's, letters from employers, or other methods, and we've yet to encounter a truly Covid-affected tenant that objects to these requests.  

A Play-By-Play of the Covid Eviction Restrictions in New York State

As of this moment, there are still heaps of unanswered questions and ambiguous executive orders regarding tenant protections, as evidenced by the inconsistencies being demonstrated in courts at this very moment, and by the debates amongst various attorneys' interpretations of these mandates.  To understand how this can be possible, it's important to look back on precisely how we got here, so here's a condensed, oversimplified timeline of all that has happened since March regarding tenant protections for the State of New York:

  • March 7, 2020: Executive Order 202 is signed declaring a disaster emergency in the State of New York.  This gives the Governor exceptional powers outside of his normal authority to make policy without the troublesome red tape of, you know, the legislature.  
  • March 20, 2020: This is when it really hit the fan.  Executive Order 202.8 is signed, which kicks off the moratorium on all evictions for 90 days (which is eventually extended multiple times) with a single sentence, offering no further details: "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."  No explanation was offered regarding whether notices could still be served, whether that applied to pending evictions already scheduled, what to do about blatant lease violators (think drug dealers, harassers, etc.), and dozens of other questions left unanswered.  
  • March 25, 2020: The Coronavirus Aid, Relief, and Economic Security (CARES) Act is signed into federal law.  This provided protection from eviction and late fees due to nonpayment of rent for most tenants renting properties that had a federally-backed mortgage (Fannie, Freddie, FHA, USDA, VA).  It also provided mortgage relief for landlords for those same federally-backed mortgages.  Depending on the type of relief the owner may have received, protections may be extended through December 31.  
  • March 30, 2020: Executive Order 202.13 shuts down non-essential construction, but does not state what is considered to be essential construction, and instead punts to the Empire State Development Corp to determine what is and is not essential.  Landlords statewide are left wondering if repairing their property is now an illegal act.
  • April 9, 2020: Executive Order 202.15 closes all government buildings, including the courts, making it impossible to contact a local court to ask a question or request guidance.  
  • May 7, 2020: Executive Order 202.28 contained several more tenant protections, and was the first order that applied only to tenants affected by Covid:
    • Security deposits may be used toward rent:  "Landlords and tenants...may, upon the consent of the tenant..., enter into a written agreement by which the security deposit...shall be used to pay rent that is in arrears or will become due...Landlords shall provide relief to tenants who so request it that are eligible for unemployment insurance or are otherwise facing financial hardship due to Covid-19."  No further explanation was provided as to what constituted "financial hardship", nor was there any mention of which party would bear the burden of proof of demonstrating financial hardship or lack thereof.  
    • No late payment fees may be charged from March 20 through August 20.  This was a real headscratcher because the order came out on May 7, saying no late fees could be charged starting from 6 weeks before the order came out.  This also said nothing about being Covid affected, so tenants that were habitual late payers well prior to Covid and that were not affected by Covid in any way, now had a free pass on paying late.  
    • Eviction moratorium extended through August 20, with caveats.  Unlike the eviction moratorium launched in EO 202.8, this extension was limited to Covid-affected tenants, and only for non-payment of rent.  In theory, this could have green-lighted evictions for all matters that were not Covid or non-payment related (holdovers, lease violators, or late payers that were not Covid-affected), except for the fact that the courts were all still closed, so evictions for all matters were still effectively still nixed.  In addition, the language was added "There shall be no initiation of a proceeding...of an eviction...for non-payment of rent" which indicated that a landlord could not serve notice of non-payment.   
  • May 14, 2020: Executive Order 202.31 reopens construction.  Toilet unclogging recommences throughout the land.  
  • May 21, 2020: Executive Order 202.32 places a moratorium on collecting property taxes from all landlords who can't afford them due to non-paying tenants.  Just kidding, this never happened.  Instead, certain municipalities are granted a whopping 21-day extension of payment property taxes, despite some having not received rent for 5+ months.
  • June 30, 2020: The Tenant Safe Harbor Act is signed into law in New York State.  "No  court  shall  issue  a  warrant  of  eviction  or  judgment  of
    possession  against  a  residential tenant...that has suffered a financial hardship during the COVID-19 covered period for the non-payment of rent that accrues or becomes due during the COVID-19 covered period."  
    This will stay in effect until ALL Covid restrictions in NY have been alleviated, i.e. movie theaters reopen, concerts are rescheduled, so basically until the virus has been completely eradicated.  The burden of proof is on the tenant to provide evidence of financial hardship, which can include comparing income pre- and post-Covid; examining a tenant's liquid assets; or a tenant's eligibility for assistance or subsidies.  This does not prevent the court from issuing a judgement against the tenant for unpaid rent.  
  • September 18, 2020: Executive Order 202.64 extends eviction moratorium for Covid-affected tenants or those receiving unemployment through October 18.  
  • October 5, 2020: Executive Order 202.67 extends eviction moratorium again for Covid-affected tenants or those receiving unemployment through November 3.  
  • November 3, 2020: Executive Order 202.72 inexplicably increases the time ALL tenants have to answer an eviction proceeding from 10 days to 60 days, effectively tacking on another 2 months onto the already exceptionally long NYS eviction process.  This also includes no provision designating the protection reserved for those Covid-affected, so now all tenants, even those that are not Covid-affected, have been afforded an additional 50 days to their eviction timeline.

And that brings us to the present.  So when you find yourself wondering why no one seems to have a clue what the hell is going on regarding tenant protections and landlord rights in New York, refer to the timeline above, and it should be very clear.  Not to mention the fact that Governor Cuomo has on multiple occasions misquoted his own executive orders in televised briefings, spreading off-the-cuff misinformation about the very order he just signed, further confusing tenants, landlords, and judges.

So Can I Evict My Tenant Or Not?  

There are many factors at play here, and you absolutely must consult an attorney that specializes in landlord-tenant law to understand your particular situation, but here is the quick-and-dirty of what you need to know.  Oh, and again, this will probably all change by the time you read this.  

1. Evicting Tenants for Non-Payment that are NOT Covid-Affected

As of now, if you have a tenant that you are confident was NOT financially Covid-affected and has still not paid rent, you may serve the pay-or-quit notice and begin down the path to eviction.  However, there are still a LOT of landlords in line ahead of you waiting to evict their tenants that were served notice before March 20, 2020 when this all started, not to mention that the response time has been extended to 60 days, so it's going to take awhile.

2. Evicting Tenants for Non-Payment that ARE Covid-Affected

Not going to happen.  If a tenant can prove that Covid has affected them financially, they're protected by the Tenant Safe Harbor Act until all lockdowns are ended and the world goes 100% back to normal, and I think we'll all be driving flying cars by then.  In most courts, since non-Covid eviction proceedings have resumed, the very first question most judges are asking tenants is "Have you been Covid-affected?"  If the answer is "yes" and the tenant can prove it, your day in court is over.  If you know for a fact your tenant was Covid-affected, they cannot be evicted.

3. Lease Terminations/Non-Renewals

If a tenant is on a month-to-month lease or has a lease that is expiring, you can terminate their lease by serving notice of termination and observing the normal HSTPA guidelines for providing notice.  If the tenant does not vacate voluntarily, then you will need to proceed to evict as a holdover tenant which is allowable, but will take awhile due to the clogged courts.  However, be aware that some courts are still outright refusing to see cases, which is inexcusable and a blatant dereliction of their duty.  

One more twist to be aware of...If the tenant has had their lease terminated and still does not vacate and requires eviction as a holdover, AND they are Covid-affected, AND they are behind on rent, AND you can show no other compelling reason for terminating their lease (such as smoking in the unit, excessive noise, poor housekeeping, etc.), the judge could view this as effectively attempting to evict a Covid-affected tenant for non-payment (a condition protected by the Tenant Safe Harbor Act) and throw out your case.  

So if I Can't Evict, What CAN I Do?

While it may at times feel hopeless being a landlord in New York during Covid, there are plenty of things you can do to improve your situation.  Here are a few steps you can take when eviction is not an option:

1. Create Your Covid Policy and Procedures

Before you do anything else, if you haven't already written an internal Covid policy, do it now, and then follow it.  At a minimum it should include your collection practices, what proof is required of tenants claiming to be Covid-affected, and what you may offer to tenants that provide proof.  For multi-units, it should also include your cleaning and sanitization practices, masking requirements in common areas, as well as how you will handle maintenance and entry into occupied units.   

These won't necessarily help you collect rent any faster, but they will certainly help ensure you treat all tenants equally, safely, and reduce your liability as an owner.  

2. Educate Your Tenants

Throughout Covid, we've very few issues working with our tenants that are truly Covid-affected.  Most have been extremely cooperative and made every effort to communicate and make partial payments when possible, and eventually get back on their feet.  Instead, the biggest issues we encounter by far are dealing with tenants NOT Covid-affected that claim to be, or are just completely misinformed by the media and believe they need not pay rent.  

Your best defense against tenants attempting to take advantage is to politely inform them of the laws and provide them with reliable sources of information so they may verify themselves.  Better yet, include information about Covid protections and tenant rights in your late notices so tenants aren't tempted to test your knowledge of the situation and refusing to pay.

3. Negotiate

When the normal legal process isn't an option, look for a win-win that can benefit both the landlord and the tenant (or at least reduce the pain of a lose-lose, as many of these situations tend to be).  This might look like:

  • Landlord offering a temporary rent reduction in exchange for partial on-time payments
  • Tenant offering to vacate voluntarily in exchange for the landlord not seeking a judgement back rent owed
  • Tenant offering to make weekly payments in exchange for landlord not pursuing eviction/termination

Everyone loses in an eviction regardless of the cause, so it's always better to attempt to resolve the situation through negotiation whenever possible.

4. Maintain Communications

None of the above work unless you maintain communications with your tenants.  Tenants facing economic uncertainty can be understandably defensive, so resist the urge to make demands, threats, or harass tenants not paying rent.  Stick to your policies, educate them, have some empathy, and offer to help in any way possible.  

We make it clear to our tenants in our initial late notices that we are happy to work with tenants in finding an agreeable resolution to those that are Covid-affected, but that we can only do so if communicating.

5. Tighten Up Your Screening Criteria

This is no consolation to you if you already have a non-paying tenant occupying your property, but eventually, you'll need to place a new tenant.  When that day comes, you should screen them with extreme diligence.  It's far better to leave a unit vacant for a few extra weeks while you search for a qualified tenant than it is to fill the unit with a tenant that won't pay and can't be evicted.  

Since Covid began, our 30-day delinquency rate has never risen above 2%, thanks to our extremely tight screening criteria.  We find that tenants that have exhibited a responsible financial history generally find ways to pay rent even when Covid-affected, but even those that can't are more open to negotiations, follow through on repayment terms, and maintain communications.  

At a minimum, we recommend conducting a background and credit check, verifying identification, verifying income, verifying employment, calling all references, and calling prior landlords. 

6. Hire a Professional

Prior to Covid, the passage of the HSTPA in 2019 had already made it extremely difficult for most landlords in New York to self-manage their own rental properties and stay in compliance with the law.  Now with the avalanche of these new Covid protections and mandates, it's probably safe to say that is has become impossible.

At a minimum, work closely with an attorney that specializes in Landlord/Tenant law and performs evictions in your local market.  Better yet, consider hiring a qualified, licensed property manager that can help you navigate these landmines, find higher quality tenants, and that already has the policies and procedures in place for handling a pandemic.

Conclusion

Heading into October 2020, it seemed as though the worst for landlords with regards to Covid was in the rear-view mirror, and that the courts were beginning to shake the dust off and get back to work.  Yet as we find ourselves now on the upswing of what appears to be a second wave of Covid heading into winter, its hard to imagine what could be in store next for landlords if another wave of shutdowns leaves thousands more tenants without jobs.  Dozens of bills have been proposed in the New York legislature proposing various relief for tenants and landlords, but to date none have gained traction given the fiscal insolvency of the state, which will probably get worse before it gets better.  

Our best hope is that our elected officials begin to work alongside landlords and tenants to form the next round of Covid legislation that's meaningful, cost-effective, and actually provides solutions that help tenants without leaving landlords to bear the full burden of the Covid housing crisis, as we are now.