As COVID-19 numbers continue to rise across the nation, the United States approaches 250,000 deaths, and just beyond 11 million cases. Many states and cities are reevaluating their COVID-19 orders and how to best protect their citizens. For many months now, businesses, such as hotels and restaurants, have been operating at lowered capacity (or closed) due to these public health guidelines. For instance, Governor Cuomo just announced new restrictions that affect restaurants and bars. With lowered revenue streams, many hotels and restaurants face the challenge of making their mortgage payments.
How Dire Is The Mortgage Situation?
According to Trepp, an analytics firm, hotels have a nearly 20% rate of delinquency on their loans, and retail currently has a 14.9% delinquency. These numbers were current as of October.
What are Potential Solutions?
WTOP reported in October on the mortgage challenges facing commercial locations, especially. Although smaller landlords are turning to family members for personal loans, other larger landlords have more at their disposal. For example, Simon Property Group, which owns the largest portfolio of malls across the United States, is exploring purchasing J.C. Penney and while simultaneously suing the Gap for more than $100 million in back rent.
According to WTOP, “Michael Hamilton, a Los Angeles-based real estate partner at the law firm O'Melveny & Myers, said he expects to see more retail and other commercial landlords going to court to collect back rent as they get squeezed between lenders and tenants.”
Although there was an easement in New York on foreclosures, as of October 23rd, it's no longer quite as simple: “Effective October 23, 2020, all residential, commercial and in rem foreclosures may proceed in the normal course, subject to relief provisions governing time limits for commencement, limitation of remedies, and certain court scheduling requirements. Applicable limits include restrictions set by federal law and state statute related to the COVID-19 emergency.”
Contact Legal Assistance Immediately
If you are a business owner currently struggling with meeting your mortgage payments for your commercial property, it behooves you to consult with an experienced New York real estate attorney. They will be able to help you navigate the complexity of federal, state, and local guidelines. Contact The Law Offices of Melvin Monachan, PLLC today at 347-352-0275 or reach out online.
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