Rent and Mortgage Cancellation Act of 2020
How it Works (Español Aquí)
Rent for All Tenants is Cancelled:
- Forgives rent and rent debt for residential tenants from March 7, 2020 through the end of the state of emergency, plus 90 days.
- Residential tenants means all tenants.
- Landlords cannot sue, for eviction or otherwise, for debt during this period.
- Landlords cannot report nonpayment of rent during this time period to credit reporting agencies.
Mortgages for Small Landlords are Cancelled:
- Forgives mortgages (principal and interest) for small homeowners from March 7, 2020, to end of emergency plus 90 days.
- “Small homeowner” is defined as the owner of a building with 6 or fewer units if the building also serves as their primary residence.
- Lenders can’t sue homeowners for foreclosure or for anything related to non payment of the mortgage, fees included. The nonpayment of the mortgage can’t be reported to a consumer reporting agency or negatively affect a homeowner’s credit score.
Landlord Relief Funds:
DHCR will create application procedures and funds for 4 types of landlords, so as to not cause competition between landlords for one pot of money. The four types of funds and procedures are for:
- Non-Profit Affordable Housing Landlords (Called operators in the bill)
- A general landlord relief fund for any landlord
- Public Housing Authorities
- Residential HDFC’s, who can show they lost maintenance and rental income, from March 7 to 90 days after the state of emergency, are entitled to full relief.
- In exchange for the relief, the HDFC will provide all tenants with renewal lease of at least 1 year at the same rental amount actually charged and collected 6 months prior to the application for relief.
- HDFC’s who get relief, waive their right to collect maintenance and rent from the shareholders/tenants.
- HDFC’s are ineligible for relief for any units that violate the HDFC’s bylaws, are illegal, or have serious housing code violations.
Non-Profit Affordable Housing Landlords and All Landlords can apply for relief funds for support. Here’s how it would work:
- Any landlord who can show they lost rental income, from March 7 to 90 days after the state of emergency, can apply for full relief, and non-profit landlords are entitled to be compensated for their losses. Also, small landlords get a priority in the for-profit landlord relief fund.
- In exchange for the relief, for the next 5 years, landlords must:
-Not evict for non payment of rent. Landlords can only move to evict for nuisance, illegal use or occupancy, refusing access for repairs, or lease expiration.
-Keep apartments in good repair. There can be no outstanding hazardous or immediately hazardous code violations.
-Not discriminate on the basis of sexual identity or orientation, gender identity or expression, conviction or arrest record, credit history, or immigration status;
-Not retaliate against a tenant
-Not report nonpayment of rent during this time period to credit reporting agencies
Landlords can’t double dip--meaning they can’t get mortgages cancelled and relief for the same housing, or apply for relief from more than one fund.
- If tenants already paid rent, DHCR will reduce payments to landlords by the amount of rent already received AND make direct payments to tenants for rent paid.
- If the landlord violates any part of their obligations, DHCR can take all the money back.
- Landlords can apply for exemptions to the requirements of getting relief if they can show it would cause undue financial hardship.
- If DHCR doesn’t find in favor of the landlord (for the relief or exemptions), the landlord can file an article 78 within 30 days to appeal DHCR’s decision.
Public Housing Authorities:
Can apply through DHCR to a public housing relief fund for all unpaid rent from March 7 to 90 days after the state of emergency ends. DHCR will create regulations and procedures for PH applications.
Tenants and homeowners can sue their landlords or lenders if any part of the bill is violated through the relevant state or local civil court within two years. If they are found guilty of violating the act, they are subject to a $10,000 fine for the first violation, a $20,000 fine for the second, and a $100,000 fine and/or loss of property for the third violation. The attorney general can also sue.