Over the past few months, construction projects in most states have carried on because construction was deemed essential and projects were exempted from government orders that closed businesses. In the jurisdictions that halted construction operations, state and local authorities are now easing those restrictions and allowing construction to resume. In “Safety Measures for Construction Projects During the COVID-19 Pandemic,” colleagues Laura Bourgeois LoBue and Jose L. Lua-Valencia discuss just how different construction sites will be than they were a few months ago under this new normal.
A recent court order issued as part of an ongoing litigation involving a Manhattan hotel held that a mezzanine lender may proceed with a UCC foreclosure sale of the mezzanine loan collateral despite N.Y.E.O. 202.8, which prevents creditors from initiating judicial foreclosures. In “Distressed Real Estate During COVID-19: New York State Court Order Finds UCC Foreclosures Are Not Suspended by New York E.O. 202.8.,” colleagues Robert J. Grados, Caroline A. Harcourt and Jacob A. Axelrod addresses the court’s denial of injunctive relief to the UCC foreclosure and determination that damages were an adequate remedy may have significant effects even after the COVID-19 pandemic, and also to mezzanine borrowers considering their defenses to UCC foreclosure proceedings.
On May 13, 2020, proposed California Senate Bill No. 939 was amended to not only prohibit landlords from evicting commercial tenants during the pendency of the COVID-19 state of emergency, but to extend protections to certain qualifying tenants permitting express rent reduction negotiation rights and lease termination rights. In “Proposed California Bill Would Ban Commercial Evictions During the State of Emergency and Grant Lease Termination Rights to Qualifying Tenants,” special counsel Carmela D. Nicholas explores how California Senate Bill 939 goes beyond the COVID-19 eviction moratorium imposed in most cities and counties across the state.
On Friday, May 15, New York began reopening businesses after widespread closures in response to the coronavirus pandemic. New York Forward, the New York plan to reopen the state, divides the state into ten (10) regions. Each region may reopen in a four-phased process as it satisfies certain metrics. In “COVID-19: New York and New Jersey Announce Phased Reopening of Businesses,” colleagues Cassie Lentchner, Adam R. Poliner and Simone A. Wood discuss the steps reopening businesses must take to protect employees and customers.
Building on existing New York State protections, the New York City Council has passed a bill providing protections for individuals who have guaranteed leases for premises affected by COVID-19. In “New York City Council Proposes Extensive Protections for Commercial Lease Guarantors,” colleagues Andrew J. Weiner and Adam J. Weaver discuss that the proposed legislation would make personal guaranties temporarily unenforceable if certain conditions related to the COVID-19 pandemic are satisfied, but the scope of the relief is not clearly defined.
On May 13, 2020, one day before the expiration of the relevant “safe harbor” deadline, the Small Business Administration (SBA) issued new guidance to borrowers who have been considering whether to return their CARES Act Paycheck Protection Program (PPP) loans in the event that the borrowers failed to consider their access to alternative sources of liquidity before certifying the “necessity” of the PPP loans. In “SBA Issues Critical New Guidance on PPP Borrowers’ Certification of Necessity,” colleagues Alexander B. Ginsberg, John E. Jensen, David B. Dixon, Elizabeth Vella Moeller and Matthew Oresman discuss how this new guidance purports to reduce significantly the risk to borrowers arising from a later determination by SBA that the borrower lacked an adequate basis for its certification.
On Thursday, May 7, California rolled out a modified stay-home order and issued guidance to move into “Stage 2” of reopening certain sectors of the economy. In “California Allows Localities to Reopen Certain Businesses Consistent with State Guidance,” colleagues Robert A. James, Callie A. Bjurstrom, Michelle A. Herrera and Stacie O. Kinser discuss how this new statewide order, and the county-level reactions to it, create another layer in the patchwork of compliance requirements, but provide a pathway for certain industries to open doors sooner than others.
Boston Mayor Martin J. Walsh first limited construction in the City of Boston to essential work on March 17. This pause in non-essential construction has been extended indefinitely by order of the Boston Public Health Commission on April 24. On April 27, Mayor Walsh confirmed that he will not re-open the City on May 4, the date the Commonwealth is scheduled to re-open (Massachusetts Governor Charlie Baker extended his stay-at-home order on April 28 to May 18). In “City of Boston, Massachusetts Extends Construction Moratorium,” partner Paul Shapses discusses how non-essential construction is not presently permitted in Boston, but draft best practice guidelines and an associated contractor certificate identify the way forward for owners and contractors.
With many struggling to make housing payments due to COVID-19, dues owed to multifamily condominium associations are likely to go unpaid—especially if homeowners feel deprived of the use of common areas, such as pools, gyms and playgrounds. In “How Chapter 11 Solved One Multifamily Condo Regime’s Dual Challenges of Mounting Liabilities and Unpaid Dues,” colleagues Patrick J. Potter, David L. Miller and Dania Slim discuss how multifamily condominium regimes with mounting liabilities and unpaid dues during COVID-19 may find answers in bankruptcy to the obstacles posed by individually titled units.