Nuts & Bolts of Stimulus Package - House Passes 2 Trillion Dollar Stimulus Package

The House passed the Senate's massive stimulus package today, paving the way for the President to sign the bill into law.

The bill includes the following:

• Tax free payments to individuals of up to $1,200; $2,400 for married couples and additional $500 for children under the age of 16. Amount of payments are dependent on adjusted gross income. No eligibility if:
• Individuals earning $99,000 or more
• Married couples earning $198,000 or more;
• Employees will be entitled to an additional $600 of weekly unemployment benefits in addition to the amount they are entitled to from their State. Part-time employees and independent contractors, even if not covered under their State law, will be entitled to these federal payments, as well;
• $377 billion in loans and grants for small businesses;
• $500 billion in loans for struggling businesses;
• $150 billion for hospitals treating coronavirus patients;
• Defers student loan payments for six (6) months; waives interest;
• Foreclosures and evictions are stayed where mortgages are backed by the federal government.

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.

Penalties for Keeping Your Real Estate Opened in Coronavirus Expanded

By Executive Order 202.11, Governor Cuomo enacted new penalties, in addition to what we discussed in our blog - What Happens When You Ignore the Essential Services Executive Order, if you keep your real estate open in violation of an Executive Order.

The new penalty order states as follows:

During the period when an Executive Order limiting operation of a type of facility or limiting the number of persons who may occupy any space is in effect, any operation of such a facility or occupancy of any such space by more than the number of persons allowed by said Executive Order shall be deemed to be a violation of law and in particular, but not by way of limitation, shall be deemed to be a violation of the Uniform Code or other local building code in effect in the jurisdiction in which the facility or space is located. In the event of any such violation, any state, county, or local police officer authorized to enforce laws within the jurisdiction in which the space or facility is located is authorized to remove persons from such space or facility. In addition, in the event of such violation, any state, county, or local code enforcement official or fire marshal authorized to enforce the Uniform Code or other local building code within the jurisdiction in which the facility or space is located is authorized to issue an appearance ticket, a Notice of Violation, an Order to Remedy such violation, which shall require immediate compliance, and/or a Do Not Occupy Order to any owner, operator, or occupant of any such facility or space. Nothing in this provision shall limit the authority of any governmental unit or agency to take such other and/or additional enforcement actions to the extent necessary to ensure compliance with such occupancy-related directives or facility operation-related directives.

 As such, here is your exposure:

• Charge of "violation of law"
• Charge of "violation of the Uniform Code or other local building code"
• Removal by police
• Receipt of an appearance ticket, Notice of Violation, and/or Order to Remedy
• Receipt of a Do Not Occupy Order to the "owner, operator, or occupant of any such facility or space"

Oh, by the way, you are KILLING people. So, stop it and close when you are ordered to close.

The end.

Real Estate Brokerage / Salesperson License Renewal Extended

By way of Executive Order 202.11, licensees "time to renew a license" has been extended "to the 30th day following the expiration of this Executive Order."

This Executive Order expires on April 26, 2020 and as such renewal is extended to May 26, 2020 for real estate brokers and salespersons.

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 

Podcast | Creative Lease Workout Options

Latest Podcast - Sharing creative lease solutions for commercial landlords and tenants who have lost revenue from coronavirus.

Click here to listen to podcast

Podcast | Foreclosure Avoidance Through Forbearance Negotiations

Businesses devastated by quarantine should proactively negotiate forbearances with their lenders to avoid foreclosure and monetary judgments.

Click here to listen to the Podcast

NYS 90-Day Mortgage Relief Plan – DFS Regulation Issued

On March 24, 2020, the details of NYS’ COVID-19 mortgage help came to light.

Specifically, the New York State Department of Financial Services promulgated 3 NYCRR 119 in response to Governor Cuomo’s Executive Order 202.9.

Here is a Q&A about the details: 

What is the COVID-19 Relief Program?
The COVID-19 Relief Program requires DFS regulated institutions to make applications for a 90-day forbearance of any payment due on a residential mortgage of New York Property to individuals residing in New York and who demonstrates financial hardship as a result of the COVID-19 pandemic.

How long is the Program effective?
The Program shall be in effect until June 19, 2020, but may be extended if necessary.

Are mortgage payments waived under the Program?
The Program does not expressly require institutions to waive mortgage payments.

When can a borrower apply for the Program?
On or before April 3, 2020, regulated institutions are required to e-mail, publish on their website, mass mail, or broadly communicate to customers how to apply for COVID-19 relief and provide their contact information.

Which institutions are covered under the Program?

DFS-regulated institutions are covered under the Program. They are New York regulated banking organizations covered by the New York Banking Law and all New York regulated mortgage servicers regulated by DFS. This means that the program does not cover National Association lenders (federally charted banks). The Program does not apply to mortgage loans made, insured, or securitized by the United States, Government Sponsored Enterprise, Federal Home Loan Bank, and lenders, issuers, servicers or trustees of such loans, as well as, servicers for the Government National Mortgage Associations.

Does the Program cover commercial loans?
The Program does not apply to any commercial mortgage or other loans not described in 3 NYCRR 119.

Aside from a 90-day forbearance, is there additional relief available under the Program?
From today until June 19, 2020, or until extended, lenders will provide the following relief to individuals who experience financial hardship from COVID-19:

• Waive fees for use of automated teller machines (ATMs);
• Waive overdraft fees; and
• Waive credit card late payment fees.

Institutions are not limited to offering the above types of relief and are encouraged to take additional reasonable and prudent actions to COVID-19 affected individuals.

Who is qualified to receive COVID-19 relief?
Regulated institutions must develop their own clear, easy to understand, and reasonably tailored criteria for assessing qualified individuals. The qualifications and process for applying for relief should be published by institutions on or before April 3, 2020.

How are applications processed under the Program?
Regulated institutions are required to develop and implement procedures for expedited processing where they must process and respond to requests immediately and no later than 10 days of receipt of all information reasonably required to process the application. All determinations must be communicated to the applicant in writing and must explain the reasons if the application was denied and a statement that the applicant may file a complaint with DFS if he believes the application was wrongly denied.

Is the Program ready to launch?
More clarity concerning the Program is expected once regulated institutions have published their process for applying for relief. Individuals who are seeking mortgage assistance as a result of the COVID-19 pandemic are encouraged retain counsel as soon as possible to negotiate with their mortgage lenders or servicers. Don’t assume you qualify and get all terms in writing before you stop making mortgage payments.

Title Examination, GAP Insurance, and Recorded Deeds - Closing Title in a Quarantined World

As of March 24, 2020, both the Nassau County and Suffolk County Clerks have suspended in-person access to their offices. As previously reported on our blog, the Chief Administrative Judge of the Courts has ordered that county clerks shall no longer accept any filings, electronic or otherwise. It's still an open question whether this precludes the electronic recording of documents, but there is no doubt that title insurance is a whole lot more complicated right now.

How will your title insurer examine title and issue a policy if they cannot pull non-electronic records? While some clerks have a more robust electronic system than others, can title insurers be confident that the records are up to date given limited staffing and restrictions on filing?

What about the period between closing of title and the recording of your deed? It has always been theoretically (and unfortunately in some instances, actually possible) for a grantor to encumber title to the property you just bought after your title insurer had already performed its search, cleared for closing, and locked in its policy. If there is an even further extended period between closing and recording due to coronavirus closures, it is more vital than ever to ensure that you are protected against these unseen encumbrances.

Traditionally this "GAP Period" requires a special endorsement that protects the purchaser against encumbrances that occur after closing but before the deed is recorded, but will title insurers be willing to insure such an unknown and potentially length time period?

If you are closing in the next few weeks, make sure your attorney has all these questions answered.

What Happens When You Ignore the Essential Services Executive Order

Beyond injuring others and being a terrible person, have you looked-up the exposure for violating Executive Order 202.8.

To remind you, 202.8 is what provides, in pertinent part, that "[e]ach employer shall reduce the in-person workforce at any work locations by 100% no later than March 22 at 8 p.m."

As to exposure for violating 202.8, it provides that "[a]ny business violating the above order shall be subject to enforcement as if this were a violation of an order pursuant to section 12 of the Public Health Law." Then, section 12 of the Public Health Law provides for "a civil penalty of not to exceed two thousand dollars for every such violation" for the first violation and a penalty "not to exceed five thousand dollars for a subsequent violation." However, if your violation "results in serious physical harm to any patient or patients, the penalty is "not to exceed ten thousand dollars."

So, if you infect someone, you are getting charged with a $10K penalty per violation.

Oh, by the way, the State can also get an injunction against your continued violations and potentially shut down your business, remote or otherwise, with that injunction.

Don't be crazy and ignore the order. Instead, if you believe you are essential, apply for a designation here.