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For a commercial tenant, obtaining and keeping a lease is critical to the success of the business. Losing a commercial lease through forfeiture based on an alleged lease violation can threaten a business’s survival. To make things worse, with the eviction moratorium at an end when a landlord threatens to terminate the lease or serves a notice to cure or notice of default, the tenant may have only a matter of days to resolve the problem before facing eviction.

What is a notice to cure?

The notice to cure is the first notice to be sent which informs the commercial tenant that he or she has ten or fifteen (depending on the terms of the lease agreement) days to correct the lease violation. If the commercial tenant cures the violation, then the landlord cannot take further steps to evict the commercial tenant. But, if the commercial tenant fails to cure then the next step would be for the landlord to give the commercial tenant a notice of termination.

What is a notice to terminate?

The notice of termination alerts the commercial tenant that according to the notice to cure, the commercial tenant failed to cure the violation and the landlord now chooses to terminate the tenancy. The notice of termination will inform the commercial tenant that the tenancy has been terminated because the commercial tenant failed to cure the lease violation and the commercial tenant has a certain number of days to vacate the premises.  If the commercial tenant does not move out of the space, then the landlord may begin the eviction proceedings against the commercial tenant in court.

What to do if served with a notice to cure?

Fortunately, if a commercial tenant receives a notice to cure, there is a legal remedy known as a Yellowstone injunction. A Yellowstone Injunction is a New York Supreme Court proceeding initiated by the commercial tenant when the landlord seeks to terminate the lease because of an alleged default by the commercial tenant. The Yellowstone Injunction is a type of temporary restraining order that prevents the landlord from terminating the lease during which time the commercial tenant must cure the default. Getting a Yellowstone Injunction can buy the commercial tenant some time to seek a court determination as to whether they have breached the lease, and to cure any alleged default. 

How to obtain a Yellowstone Injunction

To obtain a Yellowstone injunction, a commercial tenant must demonstrate that: (1) it holds a lease; (2) the landlord served a notice to cure; (3) the commercial tenant sought the Yellowstone injunction before the expiration of the cure period; and (4) the commercial tenant has the ability and desire to cure the alleged default. New York courts are inclined to grant Yellowstone injunction applications to avoid a forfeiture of a tenant’s interest in a valuable asset – a commercial lease. Tenants are best able to take advantage of this inclination by emphasizing their “ability and desire” to cure the alleged default.

Filing the Yellowstone Injunction and tolling the cure period is crucial for a commercial tenant. A court will only approve an injunction before the notice to cure deadline passes. Once the notice to cure period has passed, and the landlord has terminated the lease, the court will not grant the injunction. Curing the default may be as straightforward as executing an estoppel certificate, or it may be as time-consuming as installing a new exhaust system. Whatever the alleged default is, getting more time to cure the default and negotiate with the landlord is vital.

Have questions about an upcoming Commercial Eviction? 

If you are trying to stop an eviction, time is of the essence, and the matter of utmost importance is maintaining your business. Clair Gjertsen & Weathers PLLC has been helping people through this complex process for the last 40-years.  We offer free initial consultations to see which option is the best fit for you to stop a foreclosure auction sale to keep your home.  Please give us a call at 914.472.6202.

New York requires that home loan borrowers receive notice of a potential foreclosure proceedings prior to commencement. This requirement is found in RPAPL 1304 which details the specific notice that lenders must serve at least 90 days before commencement of a foreclosure action. Strict compliance with RPAPL 1304 is a condition precedent to the commencement of a foreclosure action and a lender’s failure to comply with RPAPL 1304 will result in the dismissal of a foreclosure complaint.

In order to comply with RPAPL 1304, a lender needs to prove both the contents of the notice and the service of the notice.

Service

RPAPL1304 (2) requires that the notice by sent to the borrower by registered or certified mail and also by first-class mail to the last known address of the borrower, and to the residence that is the subject of the mortgage. Plaintiff must establish service through “proof of the actual mailings, such as affidavits or mailing or domestic return receipts with attendant signatures, or proof of standard office mailing procedure designed to ensure that items are properly addressed and mailed, sworn to by someone with personal knowledge of the procedure.” JP Morgan Chase Bank, N.A. v. Williams, 94 N.Y.S. 3d 882 (2d Dept 2019).

On September 29, 2021, the Appellate Division, Second Department, held that a 90-Day notice mailed jointly to two or more borrowers, is insufficient to satisfy the requirements of RPAPL 1304. Since RPAPL 1304 requires “notice to the borrower” and not borrowers, strict reading of the statute requires notice to each borrower individually. Wells Fargo Bank, N.A. v. Yapkowitz, 59 Misc. 3d 1227

A foreclosure action will be dismissed if the lender cannot prove proper service by both first-class mail and registered or certified mail individually to each borrower. 

Contents

The contents of the 90-Day Notice must strictly comply with RPAPL 1304. This includes the notice being in 14 point font, containing the proper wording, and attaching a list of at least five housing counselors. A notice is not compliance with RPAPL 1304 if it fails to include any of the requirements. Aurora Loan Services, LLC v. Weisblum, 85 A.D.3d 95 (2d Dept. 2011).On December 15, 2021, the Appellate Division, Second Department, continued to strictly interpret the separate envelope rule in Bank of America, N.A. v. Kessler. In Kessler, the Court found “that inclusion of any material in the separate envelope sent to the borrower under RPAPL 1304 that is not expressly delineated in these provisions constitutes a violation of the separate envelope requirement of RPAPL 1304(2).” Therefore, the inclusion of any notices regarding the rights of a borrower in bankruptcy or in military service violates the separate envelope rule.

Have Questions about RPAPL 1304?

Clair Gjertsen & Weathers PLLC are proven foreclosure defense attorneys and we continue to monitor this ever-changing foreclosure landscape in New York for our clients. For additional questions regarding RPAPL 1304 and the most current foreclosure laws, we invite you to contact Clair Gjertsen & Weathers PLLC by calling 914-472-6202. We look forward to hearing from you.

Congratulations to Hon. Thomas R. Davis, Hon. James L. Hyer, Hon. Christie L. D’Alessio, and Hon. Thomas Quinones.

Wendy Marie Weathers humbly participated in yesterday’s Ninth Judicial District Supreme Court Induction Ceremony presided by the Honorable Administrative Law Judge of the Ninth JD, Hon. Anne E. Minihan, A.J.S.C.. As the Immediate Past President of the Westchester County Bar Association, Wendy Marie Weathers to be invited to say a few words at the Ninth Judicial District Supreme Court Induction Ceremony along side her colleagues, Sharon Matthie, the Immediate Past President of the Westchester Black Bar Association, and Sherry Levin-Wallach, the President-elect of the New York Bar Association.

United States Supreme Court Justice, Oliver Wendell Holmes, Jr. stated, “The great thing in the world is not so much where we stand, as in what direction we are moving.”  We are inspired and encouraged to appear before you and witness your administration of justice with the core principles of the judiciary in mind – independence, impartiality, integrity, fairness, equality, competence, and diligence. Congratulations! 

Massive blow to Debt Collectors- New York passes legislation that alters how collection lawsuits are filed.

New York Governor Hochul recently signed into law Senate Bill S153 also known as the Consumer Credit Fairness Act. The Act amends the provisions of New York Civil Practice Law and Rules, also known as the CPLR, that significantly impacts debt collection lawsuits filed by creditors and third-party debt collectors.  

What changes were made by the Consumer Credit Fairness Act?

The key changes made by the Consumer Credit Fairness Act include the following:

• For most debt collection lawsuits arising out of a consumer credit transaction, the statute of limitations is reduced from six years to three years.
• A payment toward the debt or “written or oral affirmation” of ownership of the debt by a consumer does not revive or extend the limitations period.
• A debt collector must attach to the complaint the contract upon which the action is based.
• The complaint must also include, among other things, the name of the original creditor, the last four digits of the account number, and the date and amount of the last payment.
• A debt collector must provide a completed “additional notice of lawsuit” to the court clerk when filing the proof of service for the complaint, which the clerk will then mail to the consumer.
• If a debt collector seeks a default judgment, it must submit supporting affidavits from the original creditor, any prior assignors or sellers of the debt, and a witness for the collector who can verify the chain of title for the debt.
• All debt collectors requesting a default judgment must also include an affidavit, stating that the statute of limitations to enforce the debt has not expired.

What benefits does the Consumer Credit Fairness Act give to debtors?

By reducing the statute of limitations for debt collection lawsuits from six years to three years, the Consumer Credit Fairness Act will significantly reduce the amount of debt involved in a lawsuit. Furthermore, the Consumer Credit Fairness Act will provide more transparency to what debt collectors are attempting to do once a lawsuit is filed how much debt collectors are allowed to take legal action for. By doing so, the Consumer Credit Fairness Act will target borderline exploitative debt collectors that attempt to circumvent the law. As stated by New York State Senator Kevin Thomas, “Abusive and exploitative debt collection lawsuits have become an epidemic across New York State. The consequences of these lawsuits—which often prey on the elderly, disabled, and low- and moderate-income New Yorkers—are devastating, especially at a time when New Yorkers are already suffering financial difficulties as a result of COVID-19. The Consumer Credit Fairness Act will stop these abusive and often illegal debt collection practices in their tracks.”

Do the changes made by Consumer Credit Fairness Act apply immediately?

Apart from the reduction of the statute of limitations from six years to three years and the prohibition on revival or extension of the statute of limitations period which becomes effective on April 6, 2022, the other changes described above become effective on May 6, 2022.

The importance of hiring an Experienced Consumer Debt Defense Attorney:

These changes along with the changes made by the New York Fair Consumer Judgment Interest Act, make it more important than ever to speak with an attorney that is experienced with consumer debt defense. Clair Gjertsen & Weathers PLLC is an experienced Consumer Debt Defense law firm in New York . We negotiate with debt collection law firms and remove holds on your bank accounts or wages garnishments. 

For additional questions regarding the consumer debt defense process, we invite you to contact Clair Gjertsen & Weathers PLLC by calling 914-472-6202. We look forward to hearing from you.

The New York State Legislature is currently reviewing Bill S5473D that relates to the rights of parties involved in foreclosure actions and provides additional details regarding the commencement and termination of certain actions related to real property.  The title of this Bill is the Foreclosure Abuse Prevention Act.

What is the Purpose of the Foreclosure Abuse Prevention Act?

The Purpose and Intent of the Bill is to address the ongoing problem with abuses of the judicial foreclosure process in New York and lenders’ attempts to manipulate statutes of limitations, which problem has been worsened by recent court decisions which, contrary to the intent of the legislature, have given mortgage lenders and loan servicers opportunities to avoid strict compliance with remedial statutes and manipulate statutes of limitation to their advantage.

Specifically, there is a recent decision of the Appellate Division in Citi Mortgage, Inc. v. Ramirez, 192 AD3d 70 (2020), which effectively gives mortgagees a second bite of the mortgage apple, permitting actions to be instituted on a note after a foreclosure action based on the same debt has already been adjudicated to be barred by the statute of limitations.

Furthermore, the bill seeks to amend CPLR Sec. 3217 as it concerns the discontinuance of mortgage foreclosure actions and is a direct response to the Court of Appeals recent holding Freedom Mtge. Corp. v Enge1, 37 NY3d 1 (2021). 

What is the Statute of Limitations for bringing a foreclosure action?

New York law has a six-year statute of limitations concerning contracts. See NY CPLR § 213. Because a mortgage is a contract, this limit applies to mortgage foreclosure as well, with each payment becoming its own cause of action, time-barred six years after its due date.

How will this bill help New York homeowners in foreclosure defense?

As a direct result of these judicial decisions, thousands of New York homeowners who secured closure of their cases by operation of longstanding statute of limitations principles are at risk of an onslaught of successive foreclosure actions that would otherwise be barred by the statute of limitations under longstanding statutory and case law.  This will cause the loss of countless homes and will burden the Courts with cases that should be barred by the statute of limitations and with excessive motion practice now that the foreclosure moratoriums have ended. This bill levels the fields for all homeowners and ensures the statute of limitation applies to all parties equally without exemption

There are several defenses to foreclosure. Most of the defenses are related to the lender making a mistake.  Some examples of foreclosure defenses are lender’s noncompliance to RPAPL Article 13, lack of standing, improper affidavits and statute of limitations.  

Does this Bill Apply to all Foreclosure Actions?

The legislature is seeking to apply this bill to all actions governed by CPLR 213 (4) in which a final judgment of foreclosure and sale has not yet been enforced.  

Have Questions About Foreclosure Defense? 

Clair Gjertsen & Weathers PLLC are proven foreclosure defense attorneys and we continue to monitor this ever-changing foreclosure landscape in New York for our clients. For additional questions regarding the implications of these decisions and the most current foreclosure laws, we invite you to contact Clair Gjertsen & Weathers PLLC by calling 914-472-6202. We look forward to hearing from you.

The hardship stays provided under New York’s COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 (CEEFPA) officially ended on January 15, 2022. 

How CEEFPA affected foreclosure proceedings?

The CEEFPA was the legislature’s response to protect New Yorkers affected by a financial hardship caused by the COVID-19 pandemic from the threat of immediate foreclosure or eviction. The CEEFPA provided a mandatory stay of any foreclosure or eviction proceeding in which a borrower or homeowner filed a hardship declaration with the court. 

The CEEFPA protections initially took effect on December 28, 2020, were extended by Governor Cuomo in May 2021, and were further extended by the legislature in September 2021. Despite calls for an extension of the hardship stays and protests by housing groups in Albany, the last extension expired on January 15, 2022.

CEEFPA has expired, foreclosure proceedings can now “resume in the normal course”

In response to the expiration of the hardship stay, New York’s Office of Court Administration (OCA) issued a memorandum to judges and non-judicial staff along with Administrative Order 35/22 on Monday. For the first time in almost twenty-two months since the pandemic began, the OCA stated that residential and commercial mortgage foreclosure proceedings can now “resume in the normal course.”

What does this mean for borrowers once protected by CEEFPA that are now facing foreclosure in New York?

The courts can now begin processing all active foreclosure matters. This includes:

• Deciding motions that are fully briefed and were previously submitted to the court for a decision;
• Scheduling oral argument or issuing briefing schedules for motions that have not yet been submitted to the court for a decision;
• An increase in the scheduling of settlement conferences pursuant to CPLR 3408; and
• Scheduling foreclosure sales.

Banks will be moving swiftly to get the cases back on the calendar.

Since many foreclosure matters have been stayed or stagnant since the beginning of the COVID-19 pandemic, banks will be moving swiftly to get the cases back on the calendar.

Experienced foreclosure defense attorneys can ensure the rights of homeowners in mortgage default are protected.

If you receive any notices in the mail from the courts or from the banks, it is not too late to know your options. Clair Gjertsen & Weathers PLLC help borrowers facing financial difficulties save their homes and protect them from lender abuses.  We understand the complex problems and issues faced by homeowners in mortgage default.

There are options available at every stage of a foreclosure action and only an experienced attorney in foreclosure defense can ensure that all of your rights are protected.

Clair Gjersten & Weathers PLLC has over 30 years of experience in foreclosure defense.  For additional questions regarding the foreclosure defense process, we invite you to contact Clair Gjertsen & Weathers PLLC by calling 914-472-6202. We look forward to hearing from you.