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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: March 19, 2021

Covid Eviction Ban Did Not Require Dismissal of Commercial Foreclosure Actions

On March 4, 2021, Justice Knipel of the Kings County Commercial Division issued a decision in U.S. Bank N.A. v. Middle Dam St. Inc., 2021 NY Slip Op. 30686(U), holding that the Covid eviction ban did not require the dismissal of a commercial foreclosure action, explaining:

Executive Order 202.2, issued on March 20, 2020, provides, in relevant part, that “[t]here shall be no enforcement of either an eviction of any tenant residential or commercial, or a foreclosure of any residential or commercial property for a period of ninety days,” Thus, Executive Order 2022 merely provided a slay for all applicable foreclosure actions.

Executive Order 202.28, issued on May 7, 2020, provides, in relevant part, that: “[t]here shall be no initiation of a proceeding or enforcement of… a foreclosure of a residential or commercial mortgage, for nonpayment of such mortgage, owned or rented by someone that is either eligible for unemployment insurance benefits under state or federal law or otherwise facing financial hardship due to COVID 19 pandemic for a period of sixty days beginning on June 20, 2020.”

Executive Orders 202.48, 202.64 and 202.70, which were issued on July 6, 2020, September 18, 2020 and October 20, 2020, respectively, extended the pause period through January 1, 2021.

Importantly, the aforementioned Executive Orders do not authorize the dismissal of commercial foreclosure actions commenced during the COVID-19 pause period, pursuant to CPLR 3211. Consequently, defendants’ dismissal motion is denied, since the Executive Orders do not provide a basis for the relief that defendants seek.

We frequently litigate disputes over the sale or leasing of commercial property. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you are involved in a dispute regarding a commercial real estate transaction.

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