LIEB BLOG

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Showing posts with label coronavirus legal updates. Show all posts
Showing posts with label coronavirus legal updates. Show all posts

Monday, October 12, 2020

Residential Eviction Suspension Being Lifted Today (October 12, 2020)

Effective October 12, 2020, residential evictions are back in NYS with suspensions being lifted.

Specifically, Chief Administrative Judge Lawrence K. Marks issued Administrative Order 231/20, which permits the prosecution of residential evictions commenced after March 17, 2020.

As of October 12, 2020, here are the rules are in place for residential and commercial proceedings:

Residential Eviction Proceedings
  • Proceedings Commenced Prior to March 17, 2020:
    • The court must conduct a status or settlement conference wherein the court reviews the procedural history of the case, any effect of the COVID-19 pandemic, if any, upon the parties, any other relief or protection available to the tenant, among others. Thereafter, the court may take further steps it deems appropriate, including allowing the matter to proceed and allowing the enforcement of warrants of eviction. 
  • Proceedings Commenced After March 17, 2020: 
    • All residential eviction matters (nonpayment and holdover) may proceed subject to: 
        • Current or future federal and state laws affecting evictions; 
          • For evictions based on nonpayment of rent: 
          • FHAFannie MaeFreddie Mac borrowers are prohibited from starting nonpayment evictions and are encouraged to seek forbearance and other options with their lenders; 
          • The CDC also halts evictions for nonpayment of rent until December 31, 2020. You can read more about it and the penalties HERE
        • The individual court’s scheduling requirements as affected by health and safety concerns due to COVID-19. 
          • Courts are prohibited from issuing a warrant of eviction or judgment of possession against a residential tenant or other lawful occupant who suffered a financial hardship during the COVID-19 period and is being evicted for non-payment of rent due during such period. 
          • Currently, the COVID-19 period runs from March 7, 2020 to January 1, 2021, as extended by Executive Order 202.66 and subject to any further extensions. This means that courts will only issue money judgments (no warrants of evictions and judgments of possession) on eviction proceedings based on nonpayment of rent due during the COVID-19 period. 

Commercial Eviction Proceedings

  • Proceedings Commenced Prior to March 17, 2020:
    • May proceed in the normal course subject to:
        1. Any existing prohibition on the prosecution or enforcement of evictions (as of this writing, there are none); and
        2. The suspension of statutory deadlines until November 3, 2020 per Executive Order 202.67.
  • Proceedings Commenced After March 17, 2020:
    • Eviction proceedings for nonpayment of rent are prohibited until October 20, 2020 per Executive Order 202.64 and subject to any further extensions.
    • Holdover eviction proceedings may be commenced but remain suspended until further order of the court per Administrative Order 160A/20. This means the petition may be filed and the tenants may file an answer, but the proceedings shall remain suspended. However, if all parties are represented by counsel, the matter may be eligible for calendaring virtual settlement conferences with the court.

All Evictions
  • All proceedings will be conducted remotely whenever appropriate.
  • Mediation and other alternative dispute resolution methods are encouraged where either all parties are represented by counsel; or all parties are unrepresented by counsel.
  • All petitions must include the Notice to Respondent Tenant.
  • Filing and service may be done through NYSCEF, if available and by mail, if not.

Landlords should immediately file their evictions and preserve their rights.


Friday, October 09, 2020

OSHA Guidance on COVID-19 Reporting Requirements for Employers

On September 30, 2020, the Occupational safety and Health Administration (OSHA) published additional frequently asked questions and answers (FAQs) regarding an employer’s reporting requirements for in-patient hospitalizations and fatalities for employees who contracted COVID at work.

The new FAQs require employers to report in-patient hospitalizations and fatalities for work-related, confirmed, cases of COVID-19.

For in-patient hospitalization, the specific rules are:
  • Employers must report in-patient hospitalization within 24 hours of the work-related incident. A work-related incident means that the employee was exposed to COVID-19 in the workplace.
  • The 24-hour reporting period starts when the employer:
    • learns that an employee was in-patient hospitalized within 24 hours of a work-related incident; and
    • determines afterward that the cause of the in-patient hospitalization was a work-related case of COVID-19.
  • The above rules only apply to reporting but not to record keeping. Employers must still record work-related confirmed COVID-19 cases regardless of whether an employee was hospitalized.

For employees who died due to a work-related, confirmed, case of COVID-19, the specific rules are:

  • Employers must report them within 30 days of the work-related incident or the employee’s exposure to COVID-19 in the workplace.
  • The employer must report the fatality to OSHA within 8 hours of knowing or determining:
    • that the employee died within 30 days of exposure to COVID-19 in the workplace; AND
    • that the cause of the death was a work-related case of COVID-19.
  • Similar to in-patient hospitalization, the above limitations only apply to reporting and not to record-keeping.

Employers are advised to consult counsel to ensure compliance and to roll out a tailored record keeping and reporting procedures compliant with OSHA’s requirements.




Tuesday, September 01, 2020

Legally Speaking: Rentals, Rights, Reality...What's a Landlord to do?

Thursday, July 09, 2020

Attorney Affirmation/Petitioner’s Affidavit No Longer Required for Evictions and Foreclosures

Effective immediately, landlords and lenders no longer need to submit an attorney affirmation or petitioner’s affidavit with the petition or complaint in an eviction or foreclosure proceeding pursuant to Administrative Judge Marks’ July 7, 2020 memorandum.

This directive amends the procedure for eviction and foreclosure proceedings as set forth on Judge Marks’ June 18 and June 23, 2020 memoranda and as explained in our blogs HERE and HERE. All other requirements and rules stated therein remain in effect. This includes the requirement to serve the Notice to Respondent Tenant or the Notice to Respondent with the commencement documents, as well as rules concerning the calendaring of hearing and motion practice as stated therein.

Alcohol Take-Out and Delivery Allowed until August 5, 2020

Governor Cuomo signed Executive Order 202.48 which extended existing executive orders, including Executive Order 202.3. Effectively, Executive Order 202.48 allows off-premises consumption of alcohol, including take-out or delivery, until August 5, 2020.

Restaurant and bar owners should still contact counsel to ensure compliance with the Executive Orders and with the limitations set by the State Liquor Authority as violations can result in penalties of up to $10,000 for retail and $100,000 for manufacturers, and/or suspension, cancellation, or revocation of their liquor license.

Tuesday, July 07, 2020

Eviction and Foreclosure Stay Continued for Commercial Properties Not Residential

On July 6, 2020, Governor Cuomo signed Executive Order 202.48 which affects the validity of many existing executive orders but most notable of which, is that it extends the stay on evictions and foreclosures proceedings to August 5, 2020 for commercial properties, but not for residential properties.

Essentially, Executive Order 202.48 extends the validity of Executive Order 202 up to 202.14, as continued and contained in Executive Order 202.27, 202.28, and 202.38 for another thirty (30) days through August 5, 2020 with some exceptions.

Real estate professionals should be aware that it does not extend the eviction and foreclosure moratorium in place as ordered in Executive Order 202.28 for all residential tenants and mortgagors. However, for commercial properties, an eviction and foreclosure stay is still in place until August 5, 2020.

As such, landlords and lenders should take note of the following:
  • Residential evictions may now be commenced but courts are prohibited from awarding warrants of eviction and judgments of possession for tenants experiencing financial hardship for non-payment of rent that accrues or becomes due during the COVID-19 period pursuant to the Tenant Safe Harbor Act. Money judgments may be awarded. For more information, read our blog HERE;
  • Residential foreclosure proceedings based on nonpayment due to COVID-19 are prohibited until August 20, 2020 pursuant to Executive Order 202.28;
  • Commercial foreclosure proceedings based on nonpayment due to COVID-19 are prohibited until August 5, 2020 pursuant to Executive Order 202.48;
  • Commercial evictions based on nonpayment are prohibited until August 5, 2020 pursuant to Executive Order 202.48; and
  • Commercial holdover proceedings may be commenced beginning June 21, 2020 pursuant to Executive Order 202.8.

Landlords and lenders are advised to contact counsel to ensure that all laws, executive orders, and court directives in place due to the coronavirus pandemic are followed. As noted in our recent blog HERE, eviction and foreclosure proceedings now require that the petitioner/plaintiff file additional forms with the commencement documents pursuant to recent directives from Administrative Judge Lawrence K. Marks dated June 18, 2020 and June 23, 2020.


Statute of Limitations Tolled until August 5, 2020 by Executive Order

Governor Cuomo signed Executive Order 202.48 which extends most Executive Orders due to the coronavirus pandemic. Among others, Executive Order 202.48 specifically extends the tolling of statute of limitations until August 5, 2020 as provided by Executive Order 202.28. As we’ve previously noted in our blog, the Executive Order does not toll all deadlines in pending and ongoing actions. A copy of Executive Order 202.48 and 202.28 can be found HERE and HERE.

Stay tuned to our blog for changes to the current commercial eviction landscape pursuant to Executive Order 202.48.

Friday, April 24, 2020

New SBA Guidance on Paycheck Protection Program and Good Faith Certifications

On April 23, 2020, the U.S. Small Business Administration issued new guidance on the Paycheck Protection Program under the CARES Act, specifically concerning the SBA’s position on good faith certifications and limiting PPP funding to public companies.

All applicants and recipients of PPP funds should pay close attention to Question 31 of the SBA Guidance: 
31. Question: Do businesses owned by large companies with adequate sources of liquidity to support the business’s ongoing operations qualify for a PPP loan?

Answer: In addition to reviewing applicable affiliation rules to determine eligibility, all borrowers must assess their economic need for a PPP loan under the standard established by the CARES Act and the PPP regulations at the time of the loan application. Although the CARES Act suspends the ordinary requirement that borrowers must be unable to obtain credit elsewhere..., borrowers still must certify in good faith that their PPP loan request is necessary. Specifically, before submitting a PPP application, all borrowers should review carefully the required certification that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” Borrowers must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business. For example, it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification. Lenders may rely on a borrower’s certification regarding the necessity of the loan request. Any borrower that applied for a PPP loan prior to the issuance of this guidance and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith (emphasis added).

While the SBA Guidance specifically mentions public companies and their good faith certifications, it is important to note that the good faith certification is required for ALL borrowers. This means that all borrowers should be prepared to demonstrate their basis for their good faith certification. Thus, to mitigate exposure, borrowers are urged to contact their counsel to prepare a paper trail of their loan application process, which should include at the very least any proof that the application is indeed necessary and the basis for all amounts stated on the application (e.g. payroll, projected losses, operating expenses).

For a further discussion on disclosure, listen to the podcast HERE.


Wednesday, April 22, 2020

Does Your Commercial Insurance Policy Cover Business Interruption Due to COVID-19?

Business owners looking to their commercial policies for business interruption and loss of income coverage due to COVID-19 have likely run into a giant roadblock - an exclusion of loss due to virus or bacteria. Many insurers added these special endorsements to commercial policies after the SARS outbreak in the early 2000s, and yours probably looks something like this:

We will not pay for loss or damage caused by or resulting from any virus, bacterium or other micro-organism that induces or is capable of inducing physical distress, illness or disease.

These virus exclusions have led practitioners like myself scratching our heads for novel legal theories to find coverage where coverage is expressly denied. The New York State Assembly has taken notice and is trying to solve this problem for us with ASSEMBLY BILL A10226A


What Does The Bill Do?
The stated purpose of the bill is to "hold harmless businesses who currently hold business interruption insurance, for losses sustained as a result of the current COVID-19 health emergency, but for which no such coverage is currently offered." It accomplishes this by construing all policies insuring against loss of use and occupancy and business interruption "to include among the covered perils under that policy, coverage for business interruption during a period of a declared state emergency due to the coronavirus disease 2019 (COVID-19) pandemic." It also declares all virus exclusions null and void, and extends this special coverage for the duration of New York's declared state emergency. The new law would only apply to insureds with less than 250 full-time employees. 

To offset the costs, the bill allows insurers paying claims to apply for reimbursement from the Department of Financial Services who will collect funding for the reimbursements from other insurers, thus spreading the cost amongst all insurers except life and health  (a cost which presumably will be passed onto insureds as a surcharge). 

Most importantly, the bill is retroactive - deemed effective March 7, 2020 and applying to policies in effect on that date. 


What Should You Do Right Now?
Business owners should have their full policy examined to see: (1) if they have business interruption coverage; and (2) whether there is a virus exemption. While other exemptions may preclude coverage, these are the threshold questions. Retaining an attorney to evaluate your policy and to submit a claim is often a good investment because claims can be denied if the wrong language or explanation for your loss is given to your insurer, or if the claim is submitted in an untimely or improper manner. Talking yourself out of a covered claim because you didn't know what was covered and what wasn't is an avoidable mistake.

If your insurer denies coverage that you think you are entitled to, hiring an attorney to pursue a claim against your insurer is an appropriate next step. Federal Courts are still accepting new filings, and the Department of Financial Services is still accepting complaints from insureds.  

Policy holders with virus exemptions should contact their local assemblymember and/or state senator to express support for the proposed legislation. The New York State Senate website even lets you voice your support for the bill digitally clicking the check mark on the right side of THIS WEBSITE.

Keep your eye on our blog for status updates on this bill. If it passes and you benefit from its changes, it may make sense to submit a claim, in which case you should hire an attorney who can give you the best shot at meeting eligibility requirements. 


Is This Even Constitutional?
Expect insurers to push back on this bill because it will create, in their minds, an unfunded liability that was not bargained for when they set insurance premiums for policies in effect on March 7, 2020. Article 1 of the United States Constitution provides that "No State shall... pass any... Law impairing the Obligation of Contracts". The Fifth and Fourteenth Amendments to the United States Constitution prohibit the taking of  property without due process of law. In the past insurers have turned to both arguments when objecting to legislation that retroactively imposed new obligations. 

Long story short, the United States Supreme Court has held that the constitution permits contractual interference pursuant to a balancing test that evaluates (1) the extent of the interference, (2) the historic regulation of the industry affected by the law, (3) the legitimate public purpose for the law, and (4) whether the law is appropriate given the stated public purpose, with special deference given to laws addressing emergencies. Home Building & Loan Association v. Blaisdell, 290 US 398 (1934); Energy Reserves Group, Inc. v. Kansas Power and Light Co., 459 US 400 (1983). Litigation is inevitable and it appears that the Assembly has specifically drafted this bill with previous case law in mind.

The New York Court of Appeals has addressed retroactive insurance coverage changes in two important decisions. 

In Health Insurance Association of America v. Harnett, 44 NY2d 302 (1978), the Court of Appeals struck down legislation that required retroactive coverage for maternity care in health insurance policies, but it did so on the narrow ground that those policies were forced renewal, where the insurer could not unilaterally cancel or refuse to renew a policy after its period expired, and therefore they did not consent to the change in the substance of the policy. The Court of Appeals did recognize that the legislation could work in other circumstances, stating "while there was a genuine, identifiable public purpose to be served by the enactment of [the law], the predicament which spawned the legislation had not risen to the magnitude of a crisis which warranted overriding the terms of the agreements entered into by the parties". Contrasting the holding in Harnett, commercial policies affected by this bill are not automatically renewable and can be cancelled by the insurer. Further, the Assembly bill specifically references the fact that COVID-19 is a state emergency, giving the legislation the emergency gravitas called for. 

In American Economy Insurance Co. v. State of New York, 30 NY3d 136 (2017), the Court of Appeals upheld legislation that insurers argued retroactively imposed unfunded workers' compensation liability. The legislation did away with a special fund that was used to pay for workers' compensation claims that were closed but unexpectedly reopened many years later. This holding was on the narrow ground that the legislation did not change the actual legal enforceability of the contract between insurer and insured, only how the liability was paid for (i.e. passing the cost of the claim from the fund directly to the insurers). Here, the Assembly bill creates a type of fund that pays for the coverage imposed by retroactive changes, a provision that presumably is intended to bring the bill closer to what is permitted by American Economy Insurance Co., and further away from what is forbidden by American Economy Insurance Co., which cautions against the changing of contractual obligations between insurer and insured. 

Other state courts have attempted similar legislation. In Harleysville Mutual Insurance Co. v. State of South Carolina, 401 S.C. 15 (2012), the South Carolina Supreme Court struck down a law that retroactively changed the definition of an "occurrence" because it altered the contractual relationship between insurer and insured without addressing a pressing emergency. In Vesta Fire Insurance Corp. v. State of Florida, 141 F3d 1427 (11th Cir. 1998) legislation was permitted that limited property insurance cancellations in the wake of Hurricane Andrew. Likewise, in State of Louisiana v. All Property & Casualty Insurance Carries Authorized and Licensed to Do Business in State, 937 So2d 313 (La. 2006) the Louisiana Supreme Court upheld legislation that extended the filing deadline for claims, and the statute of limitations for insurers suing their insurers, in the wake of Hurricanes Katrina and Rita. 

So, is the proposed legislation constitutional? There are good arguments for both sides. On one hand, COVID-19 is undoubtedly an emergency and the proposed legislation serves a legitimate and pressing public purpose. The bill even attempts to fund the new liability imposed. On the other hand, the bill substantially changes the rights and obligations bargained for when the insurer issued policies in effect on March 7, 2020. It takes a specific exclusion and renders it null and void. This ham-fisted approach may prove too much - an axe when a scalpel would be more appropriate. 

Regardless, business owners need relief now. Being legally correct and receiving your insurance payout 5 years from now after a drawn out legal battle does nothing to help pay your mortgage or payroll right now. While this bill is a good idea, and if passed will bring new benefits to many business that would  not have received them otherwise, it's not a silver bullet that brings the relief business owners need immediately. It should be viewed as one arrow in the quiver and applied in conjunction with other relief programs such as the Paycheck Protection Program. 

Monday, April 13, 2020

Employer Alert - Executive Order on Essential Businesses

On April 12, employers were ordered to provide their staff with face coverings.

The Executive Order 202.16 provides:
For all essential businesses or entities, any employees who are present in the workplace shall be provided and shall wear face coverings when in direct contact with customers or members of the public. Businesses must provide, at their expense, such face coverings for their employees. This provision may be enforced by local governments or local law enforcement as if it were an order pursuant to section 12 or 12-b of the Public Health Law.  This requirement shall be effective Wednesday, April 15 at 8 p.m.
Employers must get their face coverings now!!!

Interestingly, the order does not require a specific type of face covering so it's conceivable that even a homemade option would satisfy the requirement. However, try to get N95 masks if you can - safety first. 



Thursday, April 09, 2020

New York State Courts Release Reopening Details

As expected, Chief Administrative Judge Lawrence K. Marks has issued a new administrative order detailing the first stage of court operations for nonessential matters. A full copy of the order can be read HERE.

      1. Judges will commit themselves to deciding fully submitted motions in pending cases. 
      2. Judges will examine their dockets to find matters through which video conferencing can be helpful in resolving the matter. Parties may request a similar conference, where appropriate.
      3. Judges may conduct discovery and other ad hoc conferences to resolve disputes which should not require the filing of motion papers.

The Order also contains an important clarification and limitation: litigants may NOT file any new nonessential matters, and parties may NOT file any additional (new) papers in any pending nonessential matters.

This means no new motions, no new answers, no motion opposition papers, etc. Previous orders tolling deadlines in those matters still control. Currently deadlines are tolled by executive order of Governor Cuomo through May 7, 2020

Expect expansion of the courts' capabilities and filings in the near future after successful implementation of this phase.

Reminder that federal courts are still open and capable for accepting new matters and Lieb at Law attorneys are still litigating where court intervention is not needed. 

Tuesday, April 07, 2020

Deeds & Estate Documents - Electronic Witnessing Now Permitted

Through Executive Order 202.14 and effective from April 7, 2020 to May 7, 2020, the act of witnessing as required in signing a will, healthcare proxy, disposition of remains, recording of instruments regarding real property, power of attorney and living trusts may now be done through audio-video technology.

To do so, the following requirements must be satisfied:
  • The person requesting that their signature be witnessed, if not personally known to the witness(es), must present valid photo ID to the witness(es) during the video conference, not merely transmit it prior to or after;
  • The video conference must allow for direct interaction between the person and the witness(es), and the supervising attorney, if applicable (e.g. no pre-recorded videos of the person signing);
  • The witnesses must receive a legible copy of the signature page(s), which may be transmitted via fax or electronic means, on the same date that the pages are signed by the person;
  • The witness(es) may sign the transmitted copy of the signature page(s) and transmit the same back to the person; and
  • The witness(es) may repeat the witnessing of the original signature page(s) as of the date of execution provided the witness(es) receive such original signature pages together with the electronically witnessed copies within thirty days after the date of execution.

Similarly, video notarization has been permitted since March 19, 2020 through Executive Order 202.7, which we blogged about HERE.

This is one major step closer to remote real estate closings and estate planning.

Now, the NYS legislature needs to make this permanent and not let Coronavirus innovation be a wasted opportunity.


Penalties for Violating Executive Orders on Coronavirus Expanded AGAIN

By Executive Order 202.14, Governor Cuomo enacted new penalties for violating Coronavirus Executive Orders, in addition to what we discussed in our blogs - Penalties for Keeping Your Real Estate Opened in Coronavirus Expanded and What Happens When You Ignore the Essential Services Executive Order

The new penalty order states as follows:
The enforcement of any violation of the foregoing directives on and after April 7, 2020, in addition to any other enforcement mechanism stated in any prior executive orders, shall be a violation punishable as a violation of public health law section 12-b(2) and the Commissioner of Health is directed and authorized to issue emergency regulations. The fine for such violation by an individual who is participating in any gathering which violates the terms of the orders or is failing to abide by social distancing restrictions in effect in any place which is not their home shall not exceed $1,000.
You've been warned. 


New York State Courts Are Reopening for Non-Essential Matters

New York State courts are reopening.

On April 7, 2020 Judge Marks issued a memorandum to all trial court justices and judges outlining his plan for reopening the trial courts to non-essential matters beginning on Monday April 13, 2020. A full copy of the memorandum can be found HERE.

Judge Marks' April 7, 2020 memorandum states:

Going forward, the existing prohibition on the filing of new non-essential matters will continue. However, although our planning is ongoing, starting next Monday, April 13, we will take certain preliminary steps to open up access - remote access - to the courts for non-essential pending cases. This means that judges should review their case inventories to identify cases in which court conferences can be helpful in advancing the progress of the case, including achieving a resolution of the case. Judges can also schedule conferences at the request of the attorneys, and can be available during normal court hours to address discovery disputes and other ad hoc concerns. The conferences will need to be conducted remotely, by Skype or by telephone. Judges' personal staff will be able to assist judges remotely, as needed.

New York State courts have been closed to non-essential matters since March 22, 2020 when Chief Administrative Judge Lawrence K. Marks issued Administrative Order 78/20, which we blogged about HERE.


What will change on Monday, April 13?
Immediately, it appears that the courts are finding success in their remote operations for essential matters are looking to expand those capabilities to non-essential matters which make up the bulk of the caseload in the trial courts. Not only does the memorandum permit judges to conduct remote conferences on cases that are already pending before them, it encourages them to do so. Judges can schedule conferences and parties can request them as well.

The memorandum advises judges to examine their calendars, prioritize cases that will benefit from conferences, decide pending motions to clear backlogs, and to reduce their dockets while there are no new filings.

The big takeaway is that judges' chambers will be staffed and operational - conducting conferences and resolving motions to help clear their dockets. Your pending lawsuits are no longer frozen and progress will be made.


What don't we know?
There are some key limitations in this memorandum that cannot be overlooked:

Going forward, the existing prohibition on the filing of new non-essential matters will continue.

It is clear that as of now, you cannot commence a new action in NYS courts (you can commence a new action in the Federal courts). That means no new lawsuits in NYS courts. It is not clear, however, if that means you can file new papers on pending actions. For instance, it is unclear if you are permitted to file a new motion on a pending action, or even an answer to a complaint that was already filed and served. For now, existing administrative and executive orders tolling time limitations still control.


What to expect going forward.
Judge Marks realizes that a total freeze on court operations is unnecessary. While in-person appearances in a judge's courtroom or chambers are sometimes necessary for a civil matter in the Supreme Court, it is rarely mandatory. Remote conferences can handle most preliminary conferences, discovery disputes, and status conferences. In-person appearances are unnecessary to resolve most motions, and oral argument can be conducted over Skype, Zoom, etc. Civil parts in the Supreme Court can operate at nearly 100% capacity without opening their doors to the bar. 

I expect Judge Marks to reopen the civil parts of the Supreme Court in stages, gradually increasing their capacity until everything except trials can move forward while the rest of the country remains closed due to COVID-19. 

Courts that heavily rely upon in-person appearances, such as landlord-tenant court and the housing court, will be slower to reopen, but those actions are stayed anyway so there is less emphasis on figuring out remote operations for those parts. 

Look for continuing guidance from Judge Marks and local administrative Judges later this week and early next week.


Can any of this become permanent?
It is no secret that it is exceptionally difficult to force large institutions to adopt opportunities presented by advances in technology. For example, even though we have electronic filing, attorneys still need to appear in person to file physical motion papers in some courts that are too stubborn to change their old procedures. Even though some states permit telephone conferences, some courts in New York force attorneys to appear in their courtroom just to tell the judge that they are on schedule with their discovery and don't need any help from the court. That is a waste of time, money, and the courts' limited resources.

Perhaps the changes forced by COVID-19 will open the courts' eyes to the increased efficiency and productivity that technology can bring to our stubborn industry. Listen to our podcast about the future of the courts HERE - Court System is Archaic | Modernization Needed ASAP.



Friday, April 03, 2020

Paycheck Protection Program - Regulations Explained

The Coronavirus Aid, Relief, & Economic Security Act (CARES Act), signed into law on 3/27/2020, includes expeditious relief for America's small businesses through loans funded at $349 billion.

§1102 of the CARES Act establishes the Paycheck Protection Program (PPP) under the SBA 7(a) Loan Program & §1106 provides forgiveness of up to the full principal of loan.

To fulfill the expeditious intent of providing relief to small businesses, the SBA issued its final rule on 4/2/2020 without the typical 30-day delay for effectiveness. 

We will be discussing the PPP in great detail on Real Estate Investing with Andrew Lieb this Sunday at noon on LI News Radio (WRCN / FM103.9) - If you are in business, don't miss this important segment - it could save your financial life. 

Here is a Summary of the Interim Final Rule found at 13 CFR Part 120
  • Loan Terms:
    • No collateral
    • No personal guarantee
    • No fees
    • Loan payments deferred 6 months (interest accrues)
    • 2-year maturity
    • 1% interest rate
    • Maximum loan $10MM
  • Loan Amount (calculation methodology):
    1. Aggregate payroll costs from last 12 months
    2. Subtract amounts paid to employee over $100K
    3. Divide net of steps 1 & 2 by 12
    4. Multiply step 3 by 2.5
    5. Add outstanding amount of an Economic Injury Disaster Loan made from 1/31/2020 to 4/3/2020 less advances
  • Loan Forgiveness Availability:
    • Employees are on the payroll for 8 weeks 
    • Money used for payroll, rent (lease dated before 2/15/2020), mortgage interest (obligation incurred before 2/15/2020), or utilities (service agreement before 2/15/2020)
    • 75% of loan forgiven must be used on payroll
    • Payroll includes:
      • Small business = Salary, wages, commission, cash tips, vacation / parental / family /medical / sick leave, allowance for separation / dismissal, employee benefits (health / retirement), state / local employment tax
      • Independent Contractor = wage, commission, income, or net earnings
    • Payroll doesn’t include: 
      • Employee with principal residence outside US
      • Salary over $100k (prorated)
      • Fed employment tax from 2/15/2020 to 6/30/2020
      • Qualified sick & family leave wages
    • To prove proper payments, lenders can rely on borrower’s documentation without any verification requirements
  • Application:
    • SBA Form 2483 (lender submits SBA Form 2484)
    • Applicant certifies that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the applicant.
    • Available from 4/3/2020 to 6/30/2020 or until exhausted
    • Borrower can only get 1 loan
    • First-come, first service
    • E-signature / consent permitted
  • Eligibility:
    • Must be small business, non-profit, independent contractor (sole proprietor)
    • Must have < 500 employees (certain exceptions if bigger) with principal place of residence in US
    • Must be in operations on 2/15/2020 with W2 employees
    • Must submit proof of eligibility of:
      • Payroll processor records
      • Payroll tax filings
      • Form 1099-Misc
      • Income & expenses for sole proprietorship
      • If don’t have above, bank records to demonstrate qualifying payroll
  • Ineligibility:
    • You are engaged in illegal activity under federal, state or local law (no legal marijuana) 
    • Household employer of nannies / housekeepers
    • Owner of 20% or more is incarcerated, on probation / parole, subject to indictment, criminal information, arraignment, or convicted of felony in last 5 years
    • Delinquent / defaults on SBA loan within last 7 years
  • Misuse Penalties:
    • Knowingly using loan for unauthorized purposes is fraud
    • False statements on application is up to 5 year imprisonment / up to $250K fine + up to 2 years imprisonment / up to $5K fine + up to 30 years imprisonment / up to $1MM fine
  • Lenders Fees Paid from SBA:
    • 5% of loans up to $350K
    • 3% of loans over $350K & less than $2MM
    • 1% of loans at least $2MM  
  • Agent Fees Paid by Lender from its Fees:
    • 1% of loans up to $350K
    • 0.5% of loans over $350K & less than $2MM
    • 0.25% of loans at least $2MM
·        Questions should be made to Lender Relations Specialist at the local SBA Field Office 




Wednesday, April 01, 2020

LIEB Permitted to Close Real Estate Deals by NYS

On April 2, 2020 we received word from NYS Empire State Development that "[r]eal estate law practices are deemed essential if it is necessary to be in-person to do the work."

LIEB can close your deals in-person. 

Make no mistake, we are a leader in remote closings, but sometimes lenders and title underwriters won't permit such a closing and we have been struggling to find a solution. So, rather than guessing, we made request of the Empire State Development to tell us. This is something every business must do before acting because the penalties are outrageous for non-compliance

We just got our answer and we are already scheduling closings. 

Some people might say that this is a terrible move for a public health advocate. However, my favorite professor during my Master's program taught me to never ignore any of the dimensions of health while only focusing on physical health. Yes, the physical dimension is important. Yet, one can never ignore the spiritual, emotional, social and mental dimensions as well. To that end, there are people who need to close their real estate deal to be healthy. They may be living in limbo with no place to go, there can be financial stress of continued home ownership, there could be too many people occupying one space, or a plethora of other reasons that a closing is necessary.

Remember not to judge someone else's circumstances. 

We will be sure to keep social distance and avoid any gatherings to never forget the physical health needs of our team, our clients and ever other individual who is involved in our closing process.




Saturday, March 28, 2020

Evictions Stopped Under Coronavirus Stimulus - CARES Act

The Coronavirus Aid, Relief, and Economic Security or “CARES” Act was enacted into law on March 27, 2020. In addition to the relief enumerated in two of our recent articles (Nuts & Bolts of Stimulus Package - House Passes 2 Trillion Dollar Stimulus Package and Forbearance and Foreclosure Moratorium in Coronavirus Stimulus), the CARES Act also provides relief to residential tenants.

Under the CARES Act, from March 27, 2020 to July 25, 2020, landlords of 1- to 4-family and multifamily (5 or more) properties with FHA, Fannie Mae, or Freddie Mac mortgage loans may NOT:
  • Initiate a legal action to recover possession based on nonpayment of rent or other fees or charges;
  • Charge fees, penalties or other charges related to the nonpayment of rent;
  • Require the tenant to vacate with less than 30-days’ notice; and
  • Issue the 30-day notice to vacate until after July 25, 2020.
In addition, landlords who obtain a forbearance on their multifamily mortgage due to a financial hardship caused by the COVID-19 outbreak are prohibited from doing the above before their forbearance period expires.

Forbearance and Foreclosure Freeze in Coronavirus Stimulus

On March 27, 2020, the historic stimulus package known as the Coronavirus Aid, Relief, and Economic Security or “CARES” Act was enacted into law.

In addition to the relief enumerated in our recent blog (Nuts & Bolts of Stimulus Package - House Passes 2 Trillion Dollar Stimulus Package), the CARES Act also includes mortgage relief in the form of forbearance periods and foreclosure moratoriums for federally backed mortgages on 1-4 family homes and multifamily (5 or more) homes.

Which mortgages are covered?
  • Federally backed mortgage loans secured by a first or subordinate lien on residential real property (including individual units of condominiums and cooperatives) for 1- to 4-families and for on multifamily residential real property (5 or more dwelling units) are covered, these include loans:
  • insured by the Federal Housing Administration;
  • insured under section 255 of the National Housing Act;
  • guaranteed under section 184 or 184A of the Housing and Community Development Act of 1992;
  • guaranteed or insured by the Department of Veterans Affairs;
  • guaranteed or insured by the Department of Agriculture;
  • made by the Department of Agriculture; or
  • purchased or securitized by the Federal Home Loan Mortgage Corporation (Freddie Mac) or Federal National Mortgage Association (Fannie Mae).


What relief is available? 
For 1-4 family properties:
  • Forbearance period of 180 days, which may be extended for an additional 180 days, upon the borrower’s request;
  • No late fees, interest, or penalties during the forbearance period beyond those scheduled or calculated as if borrower is current on the mortgage; and
  • Foreclosure moratorium – servicers are prohibited from moving for a foreclosure judgment or order of sale, or execute a foreclosure-related eviction from March 18, 2020 to May 17, 2020;
For multifamily properties
  • Forbearance period of 30 days, which may be extended for up to 2 additional 30-day periods, upon the borrower’s request. Note that the forbearance is only applicable to multifamily mortgage loans that were current on payments as of February 1, 2020. Also, tenants may not be evicted nor issued a notice to vacate for nonpayment or late payment of rent during the forbearance period.
  • Foreclosure moratorium: servicers are prohibited from moving for a foreclosure judgment or order of sale, or execute a foreclosure-related eviction from March 18, 2020 to May 17, 2020. 


What is the process for requesting a forbearance?
  • For 1-4 family properties: Requests for a forbearance may be made by submitting a borrower’s attestation to a financial hardship caused by the COVID-19 emergency. No other documentation is required for the initial 180-day forbearance to be granted.
  • For multifamily properties: Requests for a forbearance may be submitted to the servicer orally or in writing, through an affirmation that the multifamily borrower is experiencing a financial hardship during the COVID-19 emergency.

Friday, March 27, 2020

No More Construction - Essential Service Guidance Updated

On March 27, 2020 at 11AM, Empire State Development refined the definition of essential businesses or entities in NYS as to construction, as follows:
All non-essential construction must shut down except emergency construction, (e.g. a project necessary to protect health and safety of the occupants, or to continue a project if it would be unsafe to allow to remain undone until it is safe to shut the site). 
Essential construction may continue and includes roads, bridges, transit facilities, utilities, hospitals or health care facilities, affordable housing, and homeless shelters. At every site, if essential or emergency non-essential construction, this includes maintaining social distance, including for purposes of elevators/meals/entry and exit. Sites that cannot maintain distance and safety best practices must close and enforcement will be provided by the state in coordination with the city/local governments. This will include fines of up to $10,000 per violation. 
For purposes of this section construction work does not include a single worker, who is the sole employee/worker on a job site.
Be warned.


Podcast | NY Court System is Archaic | Modernization Needed ASAP

Attention Governor Cuomo the court system needs your leadership. We need e-signature protocols, e-notarization rules, servers, virtual meetings, and so much more. It’s time to modernize the legal industry and revamp the economy for both the state and businesses alike. As a true leader, you can transform the Coronavirus shutdown from a negative into a blue ocean opportunity for New York State.

Listen to our podcast here