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.

Executive Order 202.8 states:

Ninety days from the date of the Order puts us out to June 18, 2020.

One noteworthy aspect of this Order is its application to both residential and commercial properties. 

It is vital to note, however, that this does not mean you cannot be in default of your rent or mortgage for the ninety day period. It simply states that there shall be no enforcement of evictions or foreclosures. If you are delinquent on your rent or mortgage during the term of this order, your landlord or lender could commence an eviction or foreclosure proceeding after the order expires. 

The interplay of this Executive Order with Executive Order 202.9 (see our prior blog about that, here) creates an opportunity for borrowers to leverage a forbearance with their lender ensuring that they are not delinquent on their mortgage on June 18, 2020. 

• There is a Coronavirus quarantine (voluntary or mandatory), which closes your property;
• Tenant is forced to close;
• Being closed, tenant makes no revenue or limited revenue from working from home;
• Without revenue, tenant defaults on rent;
• Without rent, landlord is now at risk of foreclosure and bankruptcy; and
• Consequently, landlord will need to enforce its lease to stave off foreclosure and bankruptcy.

Can landlord successfully enforce its commercial lease?

The Parties shall not be liable for any failure, delay or interruption in performing such Party's respective obligations hereunder due to causes or conditions beyond the control of such Party. Further, such Party shall not be liable unless the failure, delay or interruption shall result from the failure on the part of such Party to use reasonable care to prevent or reasonable efforts to cure such failure, delay or interruption.

"Causes or conditions beyond the control of such Party", shall mean and include acts of God ... war ... acts of third parties for which such Party is not responsible ... or any other condition or circumstances, whether similar to or different from the foregoing (it being agreed that the foregoing enumeration shall not limit or be characteristic of such conditions or circumstances) which is beyond the control of such Party or which could not be prevented or remedied by reasonable effort and at reasonable expense.

If the clause exists, the landlord has a shot at victory, but without the clause, the tenant will likely prevail, at least in part.

If the clause exists, the landlord's victory is dependent on the specific language of the clause. That is because of the rule that "[o]rdinarily, only if the force majeure clause specifically includes the event that actually prevents a party's performance will that party be excused." As a result, the language of the clause is everything.

Assuming the sample clause exists in the lease, here are the impending battlegrounds for ensuing litigation on enforcing the lease:

• Is Coronavirus an act of god? 
• If yes, is a quarantine resulting from Coronavirus also an act of god?
• If no, is a quarantine resulting from Coronavirus an act of third-parties? 
• If yes, did landlord undertake efforts to prevent the quarantine at the property? 
• If yes, were those efforts reasonable? 
• If no, did landlord undertake efforts to remedy the Coronavirus spread at the property?
• If yes, were those efforts reasonable?  

We know that these lawsuits are coming and they are going to come fast. These lawsuits came after 9/11 - see One World Trade Center LLC v. Cantor Fitzgerald Securities. Only this time they are going to be everywhere because unlike 9/11, Coronavirus is everywhere.

Landlords - now is the time to ascertain your rights, determine your enforcement plan and create a contingency strategy. If you cannot enforce your lease, it's time to contact your lender and seek a forbearance (temporary reprieve from mortgage payments to avoid foreclosure). Doing nothing will create a strong likelihood of foreclosure and bankruptcy. It's time to act.