Last week, my colleague Lauren Erbst wrote about a memorandum issued by Chief Administrative Judge Lawrence Marks that detailed the updated procedures for commercial and residential foreclosure proceedings in New York State Courts.

The post is available here and is also re-printed below.  For more information, and the latest updates, be sure to monitor our COVID-19 Resources Page for New York Lawyers.

New York Revises Real Estate Foreclosure Procedures

On March 20, Governor Cuomo issued a blanket moratorium on foreclosure by lenders of any residential or commercial property until June 20, 2020[1]. This protection was extended to August 20, 2020 for residential or commercial mortgages owned by someone “that is eligible for unemployment insurance or benefits under state or federal law or otherwise facing financial hardship due to the COVID-19 pandemic[2]. On June 24, 2020, New York’s Chief Administrative Judge Lawrence Marks procedurally extended the foreclosure moratorium by forbidding until August 20, 2020[3]: (1) entertaining or deciding any foreclosure cases other than motions to discontinue a pending case and (2) issuing judgments of foreclosure except for vacant and abandoned property.

On July 24, 2020, Judge Marks revised the temporary protocol for residential and commercial foreclosure cases as follows:

1. A stay of commencement and enforcement of commercial foreclosure matters against certain mortgagors initiated by Executive Order 202.28 remains in effect until August 19, 2020. Further proceedings in particular matters may continue to be governed by the suspension of "any specific time limit for the commencement, filing, or service of any legal action, notice, motion, or other process or proceeding, as described by the procedural laws” of New York State, set forth in Executive Orders 202.8, 202.14, 202.28, 202.38, and 202.48[4]. The general stay of foreclosure proceedings directed by Administrative Order will no longer be in effect as of July 27, 2020.

2. Filing and  serving documents in foreclosure cases will continue to be governed by New York Administrative Order 121/20[5], which requires that represented plaintiffs must file initiating documents through New York Courts Electronic Filing System or mail, but unrepresented parties may file such documents in person.

3. Commencement papers in commercial and residential foreclosure proceedings must include a form notice indicating that defendant-tenants may be eligible for an extension of time to respond to the complaint.

4. Prior to any further proceedings in a foreclosure matter, the court must initiate a status or settlement conference (including a conference pursuant to CPLR Rule 3408) to address a range of subjects related to the case and COVID-19 concerns.

5. After holding such conference, the court may address and decide any pending or future motion in a foreclosure matter and may entertain other applications (including post-judgment applications). Motions may be considered in any foreclosure matter, including matters in which one or both parties are self-represented.

6. All foreclosure proceedings should be conducted remotely to the fullest extent possible.

7. No auction or sale of property may be scheduled to occur prior to October 15, 2020.

8. By September 1, 2020, each administrative judge responsible for civil matters must develop a plan for the conducting of auctions within their judicial district in a safe and healthy manner, as well as in a manner that addresses a number of outstanding procedural and administrative concerns in the auction process. These plans are subject to the review and approval of the appropriate deputy Chief Administrative Judge.

To access the revised procedures, click here

If you have questions about bringing or defending foreclosure actions under the new procedures, or about any other New York commercial real estate matters, please contact Lauren Erbst at 212 705 4898 or lerbst@fkks.com

[1] New York State Executive Order 202.8

[2] New York State Executive Order 202.28

[3] http://www.nycourts.gov/LegacyPDFS/admin/opp/Foreclosure-Proceedings.pdf

[4] New York State Executive Order 202.48 extended the suspension until August 5, 2020.

[5] https://www.nycourts.gov/whatsnew/pdf/AO-121-20.pdfjudge