On April 2, 2020, Governor DeSantis signed Executive Order 20-94, which placed a moratorium on mortgage foreclosure actions, as well as residential eviction actions related to the non-payment of rent. The purpose of the moratorium was to provide targeted, temporary relief to Floridians in the wake of the COVID-19 pandemic. Since Executive Order 20-94 was enacted, three additional orders were signed by Governor DeSantis in order to extend the stay.
Most recently, on July 29, 2020, Governor DeSantis signed Executive Order 20-180, which extended the foreclosure and eviction moratorium through September 1, 2020. However, the new order made substantial changes to limit the types of cases that are covered by the moratorium.
Changes to the stay on mortgage foreclosures
Previously, all mortgage foreclosure cases were suspended, regardless of the reason the foreclosure action was filed. In contrast, under the new order, the foreclosure stay only extends to “single-family mortgagors adversely affected by the COVID-19 emergency”, and only for cases where the default is directly tied to non-payment.
The order defines “adversely affected” to mean “loss of employment, diminished wages or business income, or other monetary loss realized during the Florida State of Emergency directly impacting the ability of a single-family mortgagor to make mortgage payments.”
Changes to the stay on residential evictions
Similarly, the new executive order’s protection from eviction has been substantially curtailed. In the original order, all residential evictions for non-payment of rent were stayed, while landlords could continue to pursue commercial eviction actions and residential evictions due to non-monetary defaults. Under the new executive order, landlords are only prohibited from seeking “final action at the conclusion of an eviction proceeding” that arises from non-payment of rent by a residential tenant “adversely affected by the COVID-9 emergency.”
In other words, landlords can now file residential eviction actions for non-payment of rent (even if COVID-19 related), but cannot seek a final judgment in eviction or a writ of possession for tenants adversely impacted by the COVID-19 emergency until the stay is lifted.
What does this mean for lenders and landlords?
The newest executive order will likely result in an uptick in mortgage foreclosure and residential eviction filings, which have effectively been on hold since April 2, 2020. While this may be good news for lenders and landlords, the new executive order presents some challenges for completing a foreclosure or eviction action.
Specifically, the new order places an additional burden on lenders and landlords to evaluate whether their mortgagors and tenants are adversely affected by the COVID-19 emergency, in order to seek foreclosure and eviction relief from the court. This new requirement could delay lender or landlord’s ability to obtain a foreclosure or eviction judgment (even where non-payment is undisputed) if there is a factual dispute regarding whether the mortgagor or tenant is “adversely affected by the COVID-19 emergency.”
We will continue to monitor any changes to the moratorium and will provide an update once one becomes available (likely in early September).