FORECLOSURES AND EVICTIONS TEMPORARILY SUSPENDED DURING CORONAVIRUS PANDEMIC
by Caitlin Szematowicz on April 11th, 2020 in Business & Corporate Law, Litigation
The number of cases of coronavirus in Pinellas County has continued to rise. Pinellas County recently confirmed four hundred and thirteen cases of COVID-19 in Pinellas County alone. Pinellas County also just extended its local state of emergency.
Related to this pandemic is the reality that the coronavirus has had severe financial repercussions on Florida residents. Businesses have closed, employees have been laid off or furloughed, and there have been a drastic rise in unemployment claims. As a result, many people and businesses have simply been unable to make their mortgage payments or rent payments to their landlord.
Two common questions for many people in the State of Florida during these difficult times are whether foreclosures and eviction proceedings can be brought during the pandemic.
A foreclosure action occurs when a homeowner fails to pay the mortgage. A foreclosure lawsuit is the legal process wherein the lender takes control of the property due to the homeowner’s default under the loan by failing to pay the mortgage payment when due.
Florida Statute Chapter 83 governs the landlord and tenant relationship. This Chapter is divided into residential tenancies and nonresidential tenancies, and it details in what circumstances an eviction can occur for both residents and nonresidents.
A residential eviction happens when a landlord files a lawsuit to remove the tenant from the property. One of the reasons for a residential eviction is the nonpayment of rent. If the tenant fails to pay his or her monthly rent, then the landlord can move forward with evicting the tenant from the home.
“Nonresidential” under the Florida Statute refers to renting or leasing a property for a reason other than for residential purposes. This is commonly known as commercial leases (business leases). A commercial lease eviction occurs when a landlord seeks to remove the tenant from the commercial property, and one of the reasons for eviction is the tenant’s non-payment.
With many people wondering if they will be sued for foreclosure for failing to make their mortgage payment – or evicted for failing to make their rental payment – the State of Florida has responded to these concerns.
On March 24, 2020, Chief Justice Charles Canady of the Florida Supreme Court issued an order entitled “Emergency Measures in the Florida State Courts.” The order provides that the requirement in Florida Rule of Civil Procedure 1.580(a) for the clerk to issue a writ of possession “forthwith” shall be suspended through the close of business day on April 17, 2020. This essentially means that the clerks will stop issuing writs of possession (which is the final step of an eviction wherein the resident is actually removed from their home). This order did not address a landlord filing, or proceeding with, an eviction action.
On April 2, 2020, Governor Ron DeSantis issued Executive Order 2020-92 regarding Mortgage Foreclosure and Eviction Relief which answers these questions by temporarily suspending foreclosure and eviction actions for forty-five days.
The Executive Order finds that the emergency related to COVID-19 has impacted the ability of many Floridians with single-family mortgages to make their mortgage payments and that targeted temporary relief for this issue is in the best interest of the State and its people.
The Executive Order Issued the Following Action:
- The Governor of the State of Florida suspended and tolled any statute providing for a mortgage foreclosure cause of action under Florida law for forty-five days (from the date of issuance of the Executive Order, including any extensions), and
- The Governor of the State of Florida also suspended and tolled any statute providing for an action under Florida law related to the non-payment of rent by residential tenants due to the pandemic for forty=five days (from the date of issuance of the Executive Order, including any extensions).
It is important to note that the Executive Order explicitly states that nothing in the Executive Order shall be construed as relieving an individual from their obligation to make mortgage payments or rent payments. This means that the Order does not eliminate/erase the owed payments during this time – rather, it means that mortgage foreclosure and eviction actions for non-payment are suspended during the time period set forth in the Governor’s Order.
It is also significant to note that the Executive Order only applies to residential evictions. The Executive Order does not reference commercial evictions – which means that if you are a business owner who has a commercial lease, evictions may still proceed against you during this time period (assuming, of course, that the courts are open and that the Sheriff’s Office is serving eviction notices).
Thus, if you are a business owner, you may be wondering what your options are during this pandemic. There have been several measures announced to assist business owners. In addition to traditional Small Business Association funding programs, the “Coronavirus Aid, Relief, and Economic Security Act” has announced several programs to assist business owners during the coronavirus pandemic.
Such measures include federal aid programs which give businesses access to loans (namely, the paycheck protection program and economic injury disaster loans). The paycheck protection program provides loan forgiveness for retaining employees by temporarily expanding the SBA 7(a) loan program. The EIDL loan advance provides up to ten thousand dollars of economic relief to businesses that are experiencing difficulties. SBA express bridge loans are available to access up to twenty-five thousand dollars, if the business has an existing relationship with an express lender. The SBA is also providing debt relief to small businesses during this pandemic.
There has also been federal action taken regarding these matters which may apply if you have a single-family mortgage. On March 18, 2020, the Department of Housing and Urban Development authorized the Federal Housing Administration to implement an immediate foreclosure and eviction moratorium for FHA-insured single-family mortgages for sixty days due to the coronavirus pandemic. On March 18, 2020, the Federal Housing Finance Agency directed Fannie Mae and Freddie Mac to suspend foreclosures and evictions for certain single-family mortgages for at least sixty days.
Our civil litigation attorneys are experienced in foreclosures and evictions, including commercial foreclosures and commercial evictions. The civil litigation and commercial litigation lawyers at Battaglia Ross Dicus & McQuaid are here for you during these difficult times. Contact us for a consultation.