Legal Issues Associated with COVID-19 & Federal and State Regulations

5/26/2020 - Our webinar covered the following Issues, followed by Q & A.

• Federal and State governmental actions (including mortgage, lease, PPP, and Executive Order issues)
• Construction lien issues
• Contract issues
• Bankruptcy issues

Enclosed is a summary of the recent Federal legislation and Governor Whitmer’s Orders as they affect real estate issues, particularly how they impact homeowners, tenants, and landlords. The Federal CARES Act was more of an economic stimulus package, while Governor Whitmer’s Orders are based on public health issues.

In sum, under the Federal CARES Act, most homeowners are entitled to a mortgage loan payment “forbearance” (of principal and interest) for up to 360 days at no charge, although any postponed amounts will eventually still be due. This forbearance is available when the underlying mortgage was created or processed in reliance on the Federal government (the bulk of which is Fannie Mae or Freddie Mac, and which includes the vast majority of single-family mortgages).

The CARES Act also delays the start of tenant evictions for non-payment of rent until July 27, 2020, but this only applies if the tenant occupies property where the owner has a mortgage, as above, that was created or processed in reliance on the Federal government.

On the other hand, Governor Whitmer’s Executive Order 2020-54 and 2020-85 delays the start of tenant evictions for non-payment of rent until June 12, 2020, but her Order applies regardless of the status of the underlying mortgage, or even if there is no mortgage. Her Order also applies to land contract purchasers.

Accordingly, landlords must postpone evictions based on non-payment of rent under both the CARES Act and the Governor’s Order, although the rent is still ultimately due. Landlords are also limited by Executive Order 2020-42 from advertising and renting short term vacation properties.

Legislation and the Governor’s orders will change, such that these issues will require further attention (this blog article is dated  May 25, 2020).

Please contact me if you have any questions regarding real estate issues, or any other legal matter. My practice has always been to provide free consultations, and to work with clients on flexible payment schedules, and that practice will continue.

BRAG Members Only - Stream the Recorded webinar from 5/26/2020 by logging in to MemberZone here.

Scott E. Munzel
Pear Sperling Eggan & Daniels, PC
www.PSED.com
24 Frank Lloyd Wright Drive, Suite D 2000, Ann Arbor, MI 48105
734 821-1049
smunzel@psedlaw.com

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