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04.09.2020

Many jurisdictions have implemented residential eviction moratoriums during the COVID-19 crisis, but fewer have addressed commercial tenants. Below outlines current commercial eviction moratoriums and/or orders limiting commercial evictions in Virginia, Maryland, District of Columbia, New York, Los Angeles, San Francisco, and London. These orders are changing frequently and should be checked for updates.

VirginiaOn Monday, March 16, the Virginia Supreme Court issued a declaration of judicial emergency suspending all non-essential, non-emergency court proceedings for 21 days to April 6, which was subsequently extended to April 26. The Virginia Supreme Court further extended this original order to May 17. Although some eviction proceedings have been initiated following the order, the Virginia Attorney General, Supreme Court and Governor have stated that “while new petitions for evictions may be filed, it is anticipated that eviction proceedings will be suspended for the duration of the order as they are not emergency or mission critical proceedings.”[1] Arlington County also issued its own order for suspension of evictions.[2]

Maryland – The Maryland Court of Appeals issued a judicial order suspending evictions and foreclosures related to COVID-19 during the catastrophic health emergency involving residences, but no state wide order has been issued for commercial tenancies.[3] Baltimore County has suspended all evictions for the duration of the state of emergency.[4]

District of Columbia – D.C. enacted an eviction moratorium preventing landlords from evicting commercial tenants for nonpayment during the public health emergency.[5]  Under the same legislation, D.C. prohibited residential landlords from charging late fees for late payments during the public health emergency, but this prohibition likely does not apply to commercial landlords. D.C. also passed a supplemental relief bill requiring locally regulated mortgage providers to give commercial borrowers affected by the COVID-19 pandemic the right to defer 90 days of mortgage payments without late fees, provided the landlord/borrower passes along a proportionate amount of the deferral to its tenants in the form of rent reductions/deferrals.[6]

New York – Pursuant to Governor Cuomo’s Executive Order No. 202.8, there will be no eviction enforcement on commercial tenants from March 20 to June 18.[7]  New York’s state legislature has proposed a bill for suspending rent for 90 days for small businesses.[8]  “Small business” is defined in section 131 of the Economic Development Law as “one which is resident in this state, independently owned and operated, not dominant in its field and employs one hundred or less persons.”

Los Angeles, California – The Mayor of Los Angeles City has issued an order preventing eviction of commercial tenants, extended through April 19, who can show an inability to pay due to COVID-19 and allows tenants up to three months to pay back this rent after the expiration of the emergency period.[9]

San Francisco, California – On March 17, San Francisco ordered a 30 day moratorium for evictions on small businesses.[10]  A small business is one with less than $25 million in gross annual receipts for 2019. Tenants have at least 30 days from receiving the landlord’s written notice of failure to pay, and landlords must allow one month for the tenant to pay, though they are encouraged to offer a longer cure period.  If the tenant can show its inability to pay rent is due to a financial impact related to COVID-19, the cure period is extended by one month so that the landlord and tenant can discuss the matter in good faith and attempt to develop a payment plan for the tenant to pay the missed rent. If the landlord and tenant cannot agree to a payment plan, then the tenant must, on or before the date that the cure period expires, either (1) pay the rent, or (2) provide additional documentation of its continuing inability to pay due to a financial impact related to COVID-19, in which case the cure period shall extend by one more month. Thereafter, the tenant may obtain additional monthly extensions of the cure period by providing updated documentation each month, but under no circumstances shall the landlord be prohibited from evicting for non-payment for more than six months after the date the rent was originally due. If the tenant has not paid all outstanding rent at the end of the applicable cure period, then the landlord may proceed with the eviction for non-payment.[11]

London, United Kingdom – The UK Coronavirus Act suspended a landlord’s ability to evict business tenancies in England and Wales for a tenant’s failure to pay rent in the next three months effective March 26.[12] Absent an express waiver in writing, the landlord’s failure to enforce payment during this time will not be deemed a waiver of the landlord’s right to forfeit the lease. The tenant still has the obligation to pay, but the landlord’s responsive action is temporarily suspended.

Please contact Sarah Mikowski at 804-771-9506 or smikowski@hirschlerlaw.com or Jack Kendall at 804-771-9535 or jkendall@hirschlerlaw.com for more information or research on additional states/jurisdictions.

[1] https://vplc.org/update-on-evictions-during-covid-19-outbreak/.

[2] http://www.courts.state.va.us/news/items/covid/2020_0317_arlington_gd.pdf.

[3] https://www.courts.state.md.us/sites/default/files/admin-orders/20200325suspensionofforeclosuresevictions.pdf.

[4] https://www.baltimoresun.com/coronavirus/cng-co-evictions-suspended-coronavirus-20200316-57acojc32zgfnbuqr7fmuexjqe-story.html.

[5] D.C. Act 23-247 and https://www.dcpolicycenter.org/publications/covid19-emergency-legislation/.  

[6] http://lims.dccouncil.us/Download/44543/B23-0733-Introduction.pdf

[7] https://www.governor.ny.gov/news/no-2028-continuing-temporary-suspension-and-modification-laws-relating-disaster-emergency

[8] https://www.seyfarth.com/news-insights/proposed-legislation-in-new-york-would-suspend-some-rent-payments.html.

[9]https://www.lamayor.org/sites/g/files/wph446/f/page/file/CommercialEvictionMoratoriumFINAL.pdf; https://www.lamayor.org/sites/g/files/wph446/f/page/file/March232020OrderEllisalcoholparking_0.pdf

[10] https://sfmayor.org/sites/default/files/Supplement_v4_03182020_Stamped.pdf.

[11] https://sfmayor.org/sites/default/files/Supplement_v4_03182020_Stamped.pdf.

[12] https://www.dlapiper.com/en/uk/insights/publications/2020/03/coronavirus-a-uk-real-estate-perspective.

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Kristen M. Chatterton
804.771.5637
kchatterton@hirschlerlaw.com

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