US Senate Sends "Paycheck Protection Program Flexibility Act" to President Trump's Desk

Major revisions to the Paycheck Protection Program are on the way. The "Paycheck Protection Program Flexibility Act" amends the portion of the CARES Act that established the PPP. The changes are intended to make forgiveness of PPP loans more achievable for a greater number of businesses. Major changes include:

1. 5 Year Maturity Date on Unforgiven Loan Amounts. Any portion of a PPP loan that is not forgiven is now subject to a minimum maturity date of five (5) years, up from two (2). 
2. Payroll Tax Deferral. PPP borrowers can defer 50% of their share of payroll taxes to 2021 and the remaining 50% to 2022. 
3. Expanded Forgiveness Period. What was an eight (8) week forgiveness period has been expanded to twenty-four (24) weeks from the origination of the loan or December 31, 2020, whichever comes first. 
4. More Non-Payroll Expenses. Up to forty percent (40%) of the loan can now be used for non-payroll expenses and still be forgiven. A new SBA rule may be required as existing SBA rules say only twenty-five percent (25%) of PPP funds may be used for non-payroll expenses. 
5. Full Employment Period Extension. Borrowers are now required to return to February 15, 2020 levels of full time employment by December 31, 2020 instead of June 30, 2020. 
6. Full Employment Level Exceptions. Borrowers who are unable to restore their full time employment to February 15, 2020 levels can make use of two new exceptions - if they cannot find qualified employees for unfilled positions, or if their business activity is reduced due social distancing requirements, capacity limitations, or other similar restrictions in place for employee and customer safety. 

Keep an eye out for new SBA rules once President Trump signs this bill into law. If you already have a PPP loan, inquire with your lender to see how they will handle the material changes to your promissory note that this bill requires. 

Legislation Prohibiting Evictions during COVID-19 Period on Governor’s Desk

Senate Bill S8192B / Assembly Bill 10290B passed both the Assembly and Senate and is currently on the Governor’s desk for signature. The legislation will prohibit the eviction of residential tenants who suffered financial hardship during the COVID-19 pandemic.

Specifically, the bill covers the period from March 7, 2020 until various Executive Orders which placed restrictions requiring closure of and restriction on businesses and establishments, or postponement or cancellation of non-essential gatherings continue to apply in the county of the tenant’s residence (“COVID-19 Covered Period”). Further, the bill allows residential tenants to raise a defense of financial hardship during such period in a summary proceeding and courts shall consider the tenant’s income prior to and during the COVID-19 Covered Period, liquid assets, and eligibility for cash assistance, disability, unemployment insurance, and state or federal programs.

This legislation expands Executive Order 202.8 which imposed a statewide eviction moratorium until June 18, 2020 and Executive Order 202.28 which extended the moratorium to August 20, 2020 for tenants facing financial hardship due to the COVID-19 pandemic. Unlike the previous Executive Orders, the legislation does not prohibit the initiation of summary eviction proceedings, it merely prohibits the courts from issuing judgments of possession and warrants of eviction. It does not prevent landlords from obtaining money judgments for unpaid rent.

While this legislation is a softer blow to landlords than a complete prohibition on the initiation of eviction proceedings, the main concern for landlords is that the COVID-19 Covered Period can last well up to 2021. Further, as landlords can only get a money judgment and not an eviction, the judgment does not stop the bleeding and would eventually require landlords to go back to court to obtain another judgment for rent prior to the tenants vacating the property.

A lawsuit has already been filed by landlords to nullify provisions of Executive Order 202.28 which prohibit landlords from pursuing eviction proceedings until August 19, 2020 and which allow tenants to use the security deposit toward rent payments. The landlords argue the Executive Order allows tenants to withhold rent without immediate repercussion and precludes landlords from utilizing security deposits as compensation for damages caused to the unit by the tenant. It is expected that if the bill is enacted into law, litigation will surely follow.

In the meantime, landlords should consult counsel for strategies on how to mitigate their risk due to tenants’ nonpayment.

Lieb Radio | 5/31/20 Show on Telehealth Innovation - Perspective from National Leaders

This pandemic is advancing patient care through technology and shifting the operations of medical care. Congress has allowed doctors to practice interstate telehealth through the CARES Act allowing patients to consult with top physicians around the country digitally. Learn from leaders in the field how the advancement is changing the entire medical industry and find out how Walmart is leading the future of healthcare and how that will impact real estate.

On Sunday 5/31/20 at 1pm on WRCB 103.9 FM (listen live HERE) we have the following guests:

• Robin Glasco, Healthcare Strategist / Consultant for Walmart and Board Member of the American Telehealth Association
• Dr. Ketan Badani, Professor of Urology and Vice Chairman of Robotic Operations at Mount Sinai Health System
• Andrew Starr, Chief Health Operations Officer of Tallahassee Memorial Healthcare

Live shows are on Sundays between 12pm and 1pm on WRCN 103.9FM

Podcasts are released at 1pm on Sundays after each show.

NY Businesses and Building Owners Authorized to Enforce No Mask, No Entry Policy

On May 28, 2020, Governor Cuomo signed Executive Order 202.34, which authorized business operators and building owners to exercise their own discretion in denying entry to individuals who fail to comply with Executive Order 202.17 requiring face-coverings when in a public place.

Specifically, EO 202.34 allows business operators and building owners to use their discretion in denying entry and requiring or compelling removal of persons not wearing a face-covering, unless they are under the age of two or are not able to medically tolerate it as per EO 202.17. More importantly, EO 202.34 exempts such business operators and building owners from a claim of violation of the covenant of quiet enjoyment or frustration of purpose. However, the directive must still adhere to the Americans with Disabilities Act or any provision of either New York State or New York City Human Rights Law, or any other provision of law.

While businesses and building owners can now restrict entry, they should contact counsel to create a policy that ensures compliance with the anti-discrimination laws and mitigate exposure to discrimination claims.

New York Senate and Assembly Pass COVID-19 Property Tax Relief Legislation

A COVID-19 property tax relief bill is on its way to Governor Cuomo's desk for signature. The bill, S8138B, empowers local taxing jurisdictions to defer property taxes for up to 120 days from their original due date. Alternatively, the taxing jurisdiction can create a payment plan with similar time restrictions. This special legislation will automatically expire with the State Disaster Emergency Declaration.

The bill does not require all local taxing jurisdictions to provide deferral options to taxpayers. It only gives them the option to do so. Assuming Governor Cuomo signs this bill, look to your tax assessor's office to see if your jurisdiction will make use of this new legislation to provide COVID-19 property tax relief.