Tag Archives: Law

Join Virtually: Labor & Employment Strategies Around COVID-19 Relief

We invite you to join our partner Jennifer Fowler-Hermes for a virtual presentation hosted by the Lakewood Ranch Business Alliance this Wednesday, April 8.

The program will answer questions around the new aid packages available to businesses as a result of the COVID-19 crisis. With the rollout of these new programs, business owners are scrambling to quickly understand the details surrounding the offered benefits, applications processes, and eligibility requirements. Jennifer will share guidance on how employers should approach the situation from an HR perspective and will be joined by a partner with Kerkering Barberio to provide insight on the tax and accounting implications.

Participants may join by video or phone. For more details and to register, visit LWRBA.

Mortgage Relief in the CARES Act

Title IV of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), provides mortgage relief to homeowners with federally backed mortgage loans. The CARES Act allows eligible borrowers to request forbearance on loan payments for six months, and then request an additional six month forbearance period. The Act also includes a moratorium on foreclosure actions. The applicable provisions are summarized below.

Loans Secured by Property Designed for 1-4 Families

Eligibility: Federally Backed Mortgage + Financial Hardship

Only borrowers holding a “federally backed mortgage loan” are eligible for forbearance.  “Federally backed mortgage loans” are loans secured by a lien on real property designed for 1-4 families and which are insured by the FHA, the Department of Veterans Affairs, or the USDA (or made directly by the USDA), and loans purchased or securitized by Fannie Mae and Freddie Mac. Therefore, not all mortgagors will be benefitted by these provisions.  Borrowers should note that forbearance is not forgiveness of the debt. Instead, forbearance provides additional time for repaying the debt.  During the forbearance period, no fees, penalties or interest beyond the amounts scheduled or calculated as if the borrower made all contractual payments on time, shall accrue.

According to the National Housing Law Project, approximately 70 percent of single-family mortgages are federally-backed. To determine whether your loan is purchased by Fannie Mae or Freddie Mac, you can search the databases available on their websites. For other information regarding whether your loan is federally backed, you can contact your loan servicer (if you do not know the identity of your loan servicer, you can check the Mortgage Electronic Registration Systems website). Even if your loan is not federally backed, some lenders are offering similar deferral programs for borrowers who are ineligible under the CARES Act.

Additionally, a borrower holding a federally backed mortgage must have experienced “financial hardship” due to COVID-19. To receive forbearance, the borrower must submit a request to the borrower’s servicer attesting financial hardship due to COVID-19. The term, “financial hardship” is not defined in the Act, and loan servicers may not require additional documentation evidencing financial hardship.

The Act does not limit the amount of debt that may be deferred.

Loan forbearance period

Borrowers may request an initial forbearance of up to 180 days and an extension for an additional period of up to 180 days during the “covered period.”  The covered period began with the adoption of the CARE Act and will end upon the sooner of: (i) termination of the national COVID-19 emergency, and (ii) December 31, 2020.

Moratorium on Foreclosures

Except with respect to a vacant or abandoned property, a servicer of a federally backed mortgage loan (as defined above) may not initiate any foreclosure process, move for a foreclosure judgment or order of sale, or execute a foreclosure-related eviction or sale before May 17, 2020. (See below for a discussion on the temporary freeze on writs of possession, which are required to remove a foreclosed borrower.)

Loans Secured by Multifamily Property (5+ Families)

Eligibility

Section 4023 of the Act provides for forbearance for borrowers holding “federally backed multifamily mortgage loans,” which include loans secured by real property designed for 5 or more families made or insured by the federal government. This specifically includes loans made in connection with HUD and loans purchased by Fannie Mae and Freddie Mac.

Temporary financing, such as construction loans, are not eligible for forbearance. As such, many developers may not be able to take full advantage of these provisions.

Multifamily borrowers may request forbearance by attesting financial hardship due to COVID-19. However, the borrower must have been current on its payments as of February 1, 2020.

Forbearance Period

The initial forbearance period is 30 days from the multifamily borrower’s request. The borrower may extend the forbearance for up to 2 additional 30-day periods, provided the request is submitted at least 15 days prior to the initial forbearance period.  (We interpret the 15-day deadline as referring to only the first request for an extension, but the statute is unclear.)  All initial and extension requests must be made before the sooner of: (i) termination of the national COVID-19 emergency, and (ii) December 31, 2020.

Renter Protections

During the period that the multifamily borrower receives forbearance, it may not evict a tenant from a unit in the applicable property solely for failure to pay rent, charge late fees or penalties for failure to pay rent, or require a tenant to vacate a unit. Even if a multifamily borrower does not receive forbearance or has stopped receiving forbearance, it may be prohibited from performing the above actions pursuant to the moratorium on evictions described below.

Moratorium on Evictions

Under Section 4024 of the Act, borrowers holding a federally-backed mortgage or multifamily mortgage, may not, before July 25, 2020, evict a tenant from the applicable property solely for failure to pay rent, charge late fees or penalties for failure to pay rent, and require a tenant to vacate a unit. This moratorium applies to all borrowers holding a federally-backed mortgage, regardless of whether they actually apply for or receive forbearance. Even if borrowers are able to bring an eviction action against a tenant, a recent order from the Supreme Court of Florida has potentially delayed their ability to obtain a writ of possession, the final order in an eviction lawsuit used to remove an evicted tenant.

Conclusion

Given the lack of guidance surrounding the definition “financial hardship” and loan servicers’ inability to refute a borrower’s claim of hardship, the number of borrowers eligible for forbearance under the Act is potentially immense.  A borrower who is unable to keep mortgage payments current is encouraged to contact the servicer to request forbearance.  A borrower should be prepared to describe the financial hardship to the servicer, and should follow up to obtain written documentation as to the forbearance.

Our team at Williams Parker is ready to assist individuals, developers, and owners of multifamily property who are considering taking advantage of the loan forbearance provision in the CARES Act. We are monitoring governmental publications and will share any further guidance that is provided as to the circumstances that constitute “financial hardship.”

Williams Parker’s COVID-19 response team is continuing to monitor these and other developments, and advise on issues arising from the Coronavirus. View the latest updates.

Partner Terri S. Costa contributed to this post. 

Kyle D. Elliott
kelliott@willimasparker.com
(941) 329-6618

Governor Clarifies Florida Safer-at-Home Order

Late on Friday, Florida’s Governor issued clarifications through a List of FAQs regarding the Safer-at-Home Executive Order 20-91, which became effective at 12:01 a.m. April 3, 2020, as noted in our recent blog post and is currently scheduled to expire on April 30, 2020.

The FAQs explained that notwithstanding that persons in Florida who are senior citizens or individuals with a significant underlying medical condition are ordered to “stay at home and take all measures to limit the risk of exposure to COVID-19,” they may leave their homes as necessary to obtain or provide essential services or conduct essential activities, including but not limited to going to work at an essential service.

The Division of Emergency Management has posted and will maintain the Governor’s Executive Order 20-91 Essential Services List online. The FAQs remind businesses that if they are not an essential service, they must close their physical location to customers. However, non-essential businesses and their employees may continue their businesses by working from home, operating remotely, taking orders by telephone or online, and providing delivery or pick up.  Businesses that are essential services do not need any permit or documentation to remain open to customers pursuant to the Safer-at-Home Order. Likewise, individuals do not need a permit or documentation to leave their homes to go to an essential service or activity, although businesses may wish to provide a letter to employees to clarify that their business is indeed an essential service.

The FAQs also indicate that local law enforcement may enforce the Safer-at-Home Order and violation of the Order is a second-degree misdemeanor.

In compliance with the Safer-at-Home Order, Williams Parker remains dedicated to serving its clients and continues to advise and represent clients with respect to their legal matters. Our firm has launched a multidisciplinary task force of lawyers across the firm to advise on issues arising from COVID-19. This team is closely monitoring legal developments and guidance from federal, state, and local government and public health officials. For the latest updates, please visit our website.

Gail E. Farb
gfarb@williamsparker.com
(941) 552-2557

Florida Governor Suspends Mortgage Foreclosures and Residential Evictions


In recognition of COVID-19’s impact on the ability of Floridians to make mortgage and rent payments, Florida Governor Ron DeSantis issued Executive Order #20-94 on April 2 suspending the ability of mortgage lenders and landlords to bring actions for foreclosure or eviction for a period of 45 days from the date of the order (including any subsequent extensions). The order does not relieve an individual from making mortgage or rent payments.

The suspension on foreclosure proceedings applies to both residential and commercial mortgages. The suspension on eviction proceedings, on the other hand, is limited to residential tenancies.

Businesses are still subject to eviction for failure to pay rent during the COVID-19 pandemic. Although a commercial landlord can commence eviction proceedings, the landlord may not, however, be able to finalize the eviction and remove the tenant. On March 24, the Florida Supreme Court issued an order suspending the Florida Rule of Civil Procedure requiring clerks to issue writs of possession. Writs of possession are the final court orders in an eviction proceeding necessary to remove an evicted tenant.  That order stays in effect until April 17, unless subsequently extended.

The suspension on eviction proceedings is also limited to evictions arising out of a residential tenant’s failure to pay rent due to the COVID-19 emergency. Residential landlords may still commence eviction proceedings for other defaults under a lease.

Williams Parker’s COVID-19 response team is continuing to monitor these and other developments, and advise on issues arising from the Coronavirus. View the latest updates.

Nicole F. Christie
nchristie@williamsparker.com
(941) 552-2564

Governor Issues Florida Safer-at-Home Order

 

An update to this post was published April 6.

Yesterday afternoon, on April 1, 2020, to continue efforts to slow the spread of COVID-19 and to make people in Florida safer, Florida’s Governor issued a Safer-at-Home Order (Executive Order 20-91).

First, the Safer-at-Home Order mandates that senior citizens and individuals with a significant underlying medical condition (such as chronic lung disease, moderate-to-severe asthma, serious heart conditions, immunocompromised status, cancer, diabetes, severe obesity, renal failure and liver disease) stay at home and take all measures to limit the risk of exposure to COVID-19.

Next, the Safer-at-Home Order requires that all persons in Florida limit their movements and personal interactions outside of their home to only those necessary to obtain or provide essential services or conduct essential activities.

I. Essential Services

For purposes of the Order, “Essential Services” means:

  • those services listed in the U.S. Department of Homeland Security’s Guidance on the Essential Critical Infrastructure Workforce, v. 2 (March 28, 2020) (“DHS Guidance”) and any subsequent lists published; and
  • those businesses and activities designated by the Governor’s earlier Executive Order 20-89 and its attachment which consists of a list propounded by Miami-Dade County in multiple orders (“Miami-Dade Orders”).

The “Essential Services” definition may be amended to add other services and will be maintained online at the Division of Emergency Management and the Florida Department of Health.

Note that the Safer-at-Home Order also specifically encourages individuals to work from home and for all businesses or organizations to provide delivery, carry-out, or curbside service outside of the business or organization, of orders placed online or via telephone, to the greatest extent practicable.

DHS Guidance

The DHS Guidance breaks down essential workers into the following industries:

  • Healthcare/Public Health
  • Law Enforcement, Public Safety, and other First Responders
  • Food and Agriculture
  • Energy
  • Water and Wastewater
  • Transportation and Logistics
  • Public Works and Infrastructure Support Services
  • Communications and Information Technology
  • Other Community- or Government-Based Operations and Essential Functions
  • Critical Manufacturing
  • Hazardous Materials
  • Financial Services
  • Chemical
  • Defense Industrial Base
  • Commercial Facilities
  • Residential/Shelter Facilities and Services
  • Hygiene Products and Services

Included in the DHS Guidance’s extensive list of essential services are restaurant carry-out and quick serve food operations; residential and commercial real estate services, including settlement services; banks; assisted living facilities and nursing homes; property management; certain contractors and builders, those responsible for the leasing of residential properties; staff at government offices who perform title search, notary, and recording services in support of mortgage and real estate services and transactions; educators supporting public and private K-12 schools, colleges, and universities for purposes of facilitating distance learning or performing other essential functions; and many others.

Miami-Dade County Orders

The Governor’s Executive Order 20-89, issued on March 30, 2020, designated essential services pursuant to the guidelines established by several Miami-Dade County Emergency Orders.

Such list of essential services includes, but is not limited to, grocery and pet supply stores; car dealerships and auto-repair; businesses supplying office products needed for people to work from home; taxis and other private transportation providers; child care; home based care; senior living facilities; open construction sites (irrespective of the type of building); and hotels, motels, and other commercial lodging establishments; factories and manufacturing facilities; office space and administrative support necessary to perform listed essential services; and any business that is interacting with customers solely through electronic or telephonic means and delivering products via mailing, shipping, or delivery services.

We encourage you to review the complete list of essential services identified in the DHS Guidance and Miami-Dade County Orders as they are exhaustive and cumulative.

II. Essential Activities

Essential Activities” are currently defined as the following, although this list may be amended:

  • Attending religious services conducted in churches, synagogues and houses of worship.
  • Participating in recreational activities (consistent with social distancing guidelines) such as walking, biking, hiking, fishing, hunting, running, or swimming.
  • Taking care of pets.
  • Caring for or otherwise assisting a loved one or friend.

However, the Safer-at-Home Order clarified that a social gathering in a public space is not an essential activity, and that groups of people greater than ten are not permitted to congregate in any public space.

The Safer-at-Home Order will be effective from 12:01 am on April 3, 2020, through April 30, 2020, unless extended by subsequent order.

Not affected by the Safer-at-Home Order, Williams Parker remains dedicated to serving its clients and continues to advise and represent clients with respect to their legal matters. Our firm has launched a multidisciplinary task force of lawyers across the firm to advise on issues arising from COVID-19. This team is closely monitoring legal developments and guidance from federal, state, and local government and public health officials. For the latest updates, please visit our website.

Special thanks to attorney Nicole F. Christie for her assistance with this blog post.

Gail E. Farb
gfarb@williamsparker.com
(941) 552-2557

Increase in Circuit Courts’ Jurisdictional Amount

Since 1992, the Florida circuit courts have had original jurisdiction over civil lawsuits seeking more than $15,000 in damages. But on May 24, 2019, Governor Ron DeSantis signed CS/CS/HB 337, which raises the county courts’ maximum jurisdictional amount from $15,000 to $30,000, effective January 1, 2020. CS/CS/HB 337 further provides that the county courts’ maximum jurisdictional amount will rise an additional $20,000, to $50,000 in three years’ time, on January 1, 2023.

CS/CS/HB 337 has received remarkably little attention. With less than two weeks until the bill takes effect, no one (including members of the Florida Legislature) appears to have made any serious effort to study how the change in jurisdictional amount is likely to affect the operation of the county and circuit courts. Clearly the county courts will handle more cases while the circuit courts will handle less. What is not clear is how the shift in the number of cases before the respective courts will affect the litigants.

Small business disputes alone will probably place a significant additional burden on the county courts, particularly in the Sarasota area, which is home to numerous small and growing businesses. (Earlier this year, Go.Verizon ranked Sarasota second on its list of “Best Small Cities to Start a Small Business.”)

Disputes arising out of automobile accidents are also likely to impact the Sarasota and other county courts. In 2018, according to the Sheriff’s Office, Sarasota County alone had over 12,000 automobile crashes. Many of those crashes result in litigation, much of which has been filed in the county courts.  But as of January 1, 2020, a large number of car crash cases that would have been filed in circuit court will go to county court instead.

The presumptive decrease in pending cases bodes well for circuit court litigants; among other things, litigants may find more available hearing and trial dates. For county court litigants, however, the outlook is considerably more grim. The county courts may be overwhelmed by an influx of new cases, resulting in crowded courtrooms, a backlog of cases and lengthy wait times for hearings and trials. Accordingly, anyone contemplating or planning to file a civil lawsuit in which the amount of money damages at issue is between $15,000 and $30,000 should seriously consider filing suit on or before December 31, 2019.

Bailey S. Lowther
(941) 552-2565
blowther@williamsparker.com