CEPOSB among other things, effectively stays all pending commercial eviction proceedings and actions through May 1, 2021 for those small businesses with 50 or fewer employees who provide their landlord (or an agent of their landlord) a “Hardship Declaration” declaring that they have been negatively impacted as a result of the COVID-19 pandemic.
The new law not only affects pending eviction proceedings but also adds additional procedural requirements when commencing new eviction proceedings.
WHAT YOU NEED TO KNOW:
WHAT TYPES OF ACTIONS ARE COVERED BY CEPOSB?
CEPOSB applies to commercial eviction proceedings including ejectment actions. This includes both evictions based on defaults in the payment of rent or for holding over after the expiration of the lease.
CEPOSB prohibits the initiation of an eviction proceeding against a commercial tenant until May 1, 2021 where a tenant has properly completed, signed and returned a Hardship Declaration to the landlord. Additionally, if a tenant returns a Hardship Declaration during the pendency of an eviction proceeding, the case will be automatically stayed until May 1, 2021.
A landlord is required to include a Hardship Declaration form with every pre-litigation notice required to be served prior to the commencement of an eviction proceeding and with every notice of petition or summons and complaint served on a tenant. KMWB will prepare the necessary Hardship Declaration form to be included with any predicate notices or petitions served on your commercial tenants.
WHICH TENANTS QUALIFY FOR PROTECTION UNDER CEPOSB?
Small businesses with 50 or fewer employees, or small businesses with 10 or less units that have suffered one or more of the following: 1) a significant loss of revenue during the COVID-19 pandemic; 2) a significant increase in necessary expenses related to providing personal protective equipment to employees or purchasing other protective equipment in relation to Covid-19 within the business; or 3) moving expenses and difficulty in securing an alternative commercial property make it a hardship for the business to relocate during the COVID-19 pandemic, then the tenant will qualify for protection under CEPOSB by filling out and returning the Hardship Declaration to the landlord.
WHAT SHOULD I DO IF I RECEIVE A HARDSHIP DECLARATION FROM MY TENANT?
If you receive a Hardship Declaration from your tenant you should immediately advise your KMWB attorney of its receipt and provide a copy to them. The failure to advise your attorney of your receipt of the a “Hardship Declaration” can negatively affect a pending or future eviction proceeding including the dismissal of the proceeding. If you receive a Hardship Declaration from a tenant, KMWB will promptly be file it with the Court as required by the CEPOSB.
CAN I CURRENTLY SERVE PREDICATE NOTICES OR PETITIONS ON COMMERCIAL TENANTS?
Yes. CEPOSB does not prohibit service of pre-litigation predicate notices or petitions. However, it requires that a Hardship Declaration form must be included with every pre-eviction notice and petition. KMWB will include the appropriate Hardship Declaration form with every predicate notice and petition we serve on commercial tenants until the expiration of CEPOSB. If the tenant does not return a properly completed Hardship Declaration form prior to the time for filing of the petition, a landlord is permitted to commence eviction proceedings.
HOW DOES CEPOSB AFFECT EVICTION PROCEEDINGS THAT ARE CURRENTLY PENDING?
Any eviction proceeding filed on or before May 7, 2020 or commenced within thirty days of March 9, 2021 is stayed for at least 60 days, or to such later date as the chief administrative judge shall determine is necessary in order to provide time for the Courts to mail Hardship Declarations to commercial tenants and give them an opportunity to return them to their landlords. Upon proper presentment of the Hardship Declaration form to either its landlord or the courts, the stay takes effect immediately.
HOW DOES CEPOSB AFFECT WARRANTS THAT HAVE BEEN ISSUED BUT NOT EXECUTED?
An eviction warrant or judgment of possession or ejectment that has been issued prior to March 9, 2021, but has not yet been executed, including proceedings commenced before May 7, 2020, is stayed at least until the court has held a status conference with the parties to determine whether the tenant has been affected by the Covid-19 pandemic and whether the tenant has had an opportunity to submit a Hardship Declaration.
ARE THERE ANY EVICTION PROCEEDINGS WHERE CEPOSB IS NOT APPLICABLE?
Yes. CEPOSB does not apply if the tenant is persistently and unreasonably engaging in behavior that substantially infringes on the use and enjoyment of other tenants or occupants or causes a substantial safety hazard to others. If your tenant is engaging in this type of activity There are however strict procedural requirements that the court will require to go forward with this type of case and you should consult an attorney in our office before doing so.
WHAT REMEDIES DO I HAVE AGAINST NON-PAYING TENANTS?
CEPOSB does not affect a landlord’s ability to sue commercial tenants in plenary actions for rent in Civil and Supreme Court. The Hardship Declaration form itself states further that the tenant will owe any unpaid rent to the landlord. As a result, landlords are urged to commence such actions in order to obtain money judgments for past due rent.
 The CEPOSB further provides certain protections related to mortgage foreclosure, tax foreclosure, credit discrimination and tax renewal exemption protections which are not discussed herein. If you would like further information regarding this aspect of the law, please contact our office for a consultation.