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Eviction & Foreclosure During the COVID-19 Pandemic

Client Alert

Like most areas of our society, the COVID-19 pandemic has greatly impacted the business relationships between landlords and tenants and between lenders and borrowers. In most states, non-essential retailers and other businesses have closed their doors and are doing business online, to the extent that they can. Some businesses, like The Cheesecake Factory, have announced that they would not be paying rent at any of their locations for at least a month due to the pandemic. Landlords and homeowners are concerned about being able to pay their mortgages and tenants are concerned about being able paying their rent.

On April 1, 2020, Ohio Governor Mike DeWine issued an Order requesting that landlords in Ohio suspend rent payments for 90 days for small business commercial tenants. The Governor also requested that landlords agree to a moratorium on evictions of small business tenants for 90 days. Lenders have been requested to provide commercial real estate borrowers with forbearances on mortgage payments for 90 days. Importantly, the Governor’s Order makes clear that the Order does not permanently relieve small business tenants or borrowers from their obligations to pay rent or their mortgages that would have been due during the 90-day grace period that the Order calls for:

  • “Nothing in this Order shall be construed to negate the obligation of a small business commercial tenant to pay rent or restrict a landlord from recovering rent at a future time;”
  • “Nothing in this Order shall be construed to negate the obligations of a commercial real estate borrower, but rather provide a pause and time for sensible solutions to be worked out among commercial real estate borrowers and lenders; and”
  • “Nothing in this Order shall be construed to suspend any federal or state law.” 

The Governor’s Order uses the words “are requested to,” rather than “shall,” with respect to what he is asking landlords and lenders to do. However, it is very likely that, barring emergency circumstances, Courts will enforce this requested 90-day moratorium on evictions, rent and mortgage payments for small businesses.

Even prior to the Governor’s Order, the Ohio Supreme Court had recommended that evictions for non-payment should be suspended, but the specific policy being followed has depended on the local courts. Unlike the Governor’s Order, which applies only to small businesses, many of the local court policies have also placed moratoriums on residential evictions. It is highly recommended that you check with your attorney and local court regarding what the local court’s current policies are with respect to evictions. In most circumstances, evictions that may be allowed to go forward by the courts will be limited to emergency circumstances other than for non-payment of rent, such as due to criminal activity or damage to property. Additionally, the U.S. Department of Housing and Urban Development issued a moratorium on evictions from public housing for a period of 60 days from March 18 to May 18.

In addition to Governor DeWine’s requested moratorium on foreclosures for small businesses, all commercial and residential foreclosure sales have been suspended by most local courts at the recommendation of the Ohio Supreme Court. Again, check with your attorney or your local court to confirm the policy on foreclosures in your area. The U.S. Department of Housing and Urban Development has also placed a moratorium on foreclosures of federally backed mortgages (Fannie Mae and Freddie Mac) for a period of 60 days from March 18 - May 18. Some banks have issued their own policies to stay foreclosures. Check with your lender on their current foreclosure policy and how it might impact you.

Finally, here are some additional tips for handling the landlord-tenant or lender-borrower issues that you may be facing in light of COVID-19. Please do not hesitate to reach out to the team at Brennan, Manna & Diamond to discuss any legal questions or problems that you might be experiencing during this time.

Tips for Landlords and Lenders:

  • For consistently paying tenants or borrowers, wait and see what payments they make before approaching them on modification.
  • Be proactive with tenants and borrowers who have had difficulty paying in the past or who have now fallen behind.
  • Propose to accept a lesser payment amount for the month, deferring the rest of the monthly payment.
  • If you accept a lesser amount for the month or defer payment, put the terms in writing, signed or acknowledged in writing by the tenant or borrower, so there is no confusion on how the payments are being applied or what will be due going forward.

Tips for Tenants:

  • Be proactive if you know you are going to miss a payment and offer to pay a lesser amount for the month.
  • Something is better than nothing to the landlord, especially if compared to their other tenants.
  • Get the landlord’s agreement in writing to waive or defer any rent.
  • Use small business loans from the Small Business Administration (SBA) or another source towards rent.
  • Choose paying rent over paying utilities since utility companies in Ohio have suspended shutoffs.

Tips for Borrowers:

  • Be proactive with your lender and find out their current policy on foreclosures.
  • Discuss a deferment of payments or reduction in payment amount.
  • Get any loan payment modification in writing.
  • Remember that some SBA loans can be applied to mortgage interest payments.

For questions or more information, please contact Partner Matthew R. Duncan at mrduncan@bmdllc.com or 330.253.4925.


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