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Commercial Division Blog

Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: February 26, 2021

Pandemic-Related Foreclosure Stay Did Not Apply to Commercial Foreclosure

On February 9, 2021, Justice Knipel of the Kings County Commercial Division issued a decision in Bridgecity Capltal QOB LLC v. 1717 E. 8 St LLC, 2021 NY Slip Op. 30406(U), holding that the pandemic-related foreclosure stay did not apply to a commercial foreclosure, explaining:

Executive Order 202.28 provides that:

There shall be no initiation of a proceeding or enforcement of either an eviction of any residential or commercial tenant, for nonpayment of tent or a foreclosure of any residential or commercial mortgage, for nonpayment of such mortgage, owned or rented 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 for a period of sixty days beginning on June 20, 2020.

Executive Order 202.28, by its plain terms, only applies to someone that is eligible for unemployment insurance or benefits under state or federal law. 1717 East 8 St LLC, the borrower under the mortgages and the owner of the 8’th St. Property and the Kings Highway Property, is a limited liability company, and therefore, Executive Order 202.28 is inapplicable.

Even assuming Executive Order 202.28 is applicable, defendants have failed to demonstrate that 1717 East 8 St LLC faced financial hardship due to the COVID-19 pandemic. Jacobov merely attests that the COVID-19 pandemic has severely impacted my income as tenants have ceased making rental payments. However, Jacobov’s personal financial hardship is irrelevant, and defendants have failed to demonstrate that 1717 East 8 St LLC’s rental income has decreased due to the COVID19 pandemic.

(Internal citations omitted).

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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