Governor Murphy's Executive Order 106 Impacts Eviction and Foreclosure Processes

Governor Murphy's Executive Order 106 Impacts Eviction and Foreclosure Processes
On March 19, 2020, New Jersey Governor Philip D. Murphy signed Executive Order 106 which directs sheriffs, court officers, and their agents to refrain from acting to remove individuals from residential properties through the eviction or foreclosure processes during the time in which this Order is in effect. This Order will remain in effect for no longer than two months following the end of the Public Health Emergency or State of Emergency established by Executive Order No. 103 (2020) (which is currently still in effect as of this date) whichever ends later, unless the Order is first revoked or modified by the Governor in a subsequent order.
 
The thrust of Executive Order 106 is to reflect the substantial loss of income as a result of businesses closures, hour reductions and layoffs related to the COVID-19 pandemic that has crippled the economy, making some residents of the State unable to stay current on rent and mortgage payments. This Order is prefaced on the issue of public health during this pandemic, stating that housing security and stability are important to public health, particularly as homelessness can increase vulnerability to COVID-19.
 
Read the details about the Executive Order 106 here.
 
1. Any lessee, tenant, homeowner or any other person shall not be removed from a residential property as the result of an eviction or foreclosure proceeding;
 
2. While eviction and foreclosure proceedings may be initiated or continued during the time this Order is in effect, enforcement of all judgments for possession, warrants of removal, and writs of possession shall be stayed while this Order is in effect, unless the court determines on its own motion or motion of the parties that enforcement is necessary in the interest of justice. This Order does not affect any schedule of rent that is due; and
 
3. Sheriffs, court officers, and their agents shall refrain from acting to remove individuals from residential properties through the eviction or foreclosure processes during the time this Order is in effect, unless the court determines on its own motion or motion of the parties that enforcement is necessary in the interest of justice.
 
Pursuant to Order 106, “residential property” means any property rented or owned for residential purposes, including, but not limited to, any house, building, mobile home or land in a mobile home park, or tenement leased for residential purposes, but shall not include any hotel, motel, or other guest house, or part thereof, rented to a transient guest or seasonal tenant, or a residential health care facility. The State Director 4 of Emergency Management, who is the Superintendent of State Police, shall have the discretion to make additions, amendments, clarifications, exceptions, and exclusions to these lists.
 
It is very important to note that this Order by no means grants a person immunity from making required mortgage payments or rent for the next two months. Very simply, it prohibits court officers from executing eviction orders and initiating removal actions. A bank or landlord can still file and initiate a foreclosure or eviction action regardless of this Order should a person fall behind on required mortgage payments or rent.
 
Should a person fall behind on either rent or mortgage payments based upon job loss associated with the COVID-19 pandemic, it may be in the best interests to start the process of negotiating with either a lender or landlord to reach a compromise.
 
In respect to a mortgage, a bank could be inclined to enter into what is known as a “forbearance agreement.” This is a special agreement where a lender agrees to either opt not to engage in the foreclosure process or stop the foreclosure process should a person comply with certain changed terms relating to a loan. These terms may involve the reduction in payments or an extension of the loan period. This type of agreement usually presents itself when a homeowner faces severe hardship in making mortgage payments. These agreements can be beneficial to not only the borrower who has fallen behind in payments, but also the bank because it saves significant costs associated with the foreclosure process itself.
 
In respect to residential leases, it may be worth contacting one’s landlord to discuss a solution to issues that affect one’s ability to pay rent during the COVID-19 pandemic. Although many lease agreements tend to be written strongly in favor of the landlord, there may be some room to negotiate with the landlord to prevent the filing of an eviction action - especially at a time when a person cannot be removed due to Executive Order 106. It may be in the best interests to use the uncertainty of the exact date of when this Order will be lifted as a negotiating tactic. Maybe an agreement could be reached with a landlord where reduced rent can be paid now, with the exception that the remaining balance will be paid within a certain period of time.
 
The COVID-19 pandemic has affected every resident of the State of New Jersey in a detrimental way. It is clear that the future is uncertain. Should you have any questions regarding your rights related to housing at this unfortunate time in history, we are here to help.
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