Mortgage Foreclosure and Eviction Issues During and After The COVID-19 Pandemic

Bart R. Valdes, Partner

Ruben Laboy, Associate Attorney

In response to the COVID-19 pandemic there has been a flurry of government action to try to keep people in their homes until the health crisis subsides.  For example, the Governor of the State of Florida signed an Executive Order to “suspend and toll” certain statutes dealing with mortgage foreclosure and residential evictions through mid-May.  The Florida Supreme Court also directed the Clerks of Court to stop issuing Writs of Possession (which are necessary to dispossess people from their homes).  Several Sheriff’s Offices around Florida stopped serving the papers necessary to complete an eviction or foreclosure.  Further, many state court judges have limited what types of cases can be heard and, in some instances, stopped foreclosure and eviction cases altogether. 

None of this government action relives borrowers from making monthly mortgage payments or residential tenants from paying rent.  In fact, the Executive Order signed by Governor Desantis specifically states that “[n]othing in this Executive Order shall be construed as relieving an individual from their obligation to make mortgage payments or rent payments.”  This means that everyone must still pay their lender or their landlord the full amount of the mortgage payment or rent each month or risk falling into default.

Also, business owners and commercial landlords should know that the Executive Order only applies to residential tenancies.  There is nothing in the Executive Order about commercial landlord-tenant relationships.  As such, businesses do not have the same “protection” as individuals.  If you lease space for a restaurant, store, office, gas station, shop, or any other type of business, the relationship with the landlord will continue to be governed by the lease agreement and Florida law relating to commercial tenancies. 

Once the Executive Order expires, and the courts are back up and running, any default in the payment of rent, or failure to make mortgage payments, may lead to an immediate eviction or foreclosure lawsuit.  This includes any failure to make payments during March, April or May 2020.  Further, any tenant, including a residential tenant, that breaches the terms of the lease other than for non-payment of rent, may be evicted immediately.  Any eviction is subject to the Florida Statues, the Florida Rules of Civil Procedure and a wealth of case law.  There is no “self-help” and an eviction (or foreclosure) must go through the court system.  The failure to take the right step, at the right time, may lead to a tenant losing a defense or a landlord being stopped in its tracks.    

Importantly, there are several provisions contained within mortgages and lease agreements that may impact the rights and duties of the parties.  It is absolutely critical to read the contract, and then also understand the law, in order to make appropriate decisions.  For example, there may be a “time is of the essence” clause that makes any late-payment a material breach of the contract.  There may be a “force majeure” clause (also known as an “act of God” clause) that may excuse a failure to perform, even in commercial leases.  There may also be “notice” provisions that lay out the specific manner in which a landlord or lender must provide notice of, and an opportunity to cure, a breach or default.   As such, if you have any questions about your rights, claims or defenses as a tenant or a landlord, a borrower or a lender, then you should seek a lawyer experienced in this area of the law.

Bart R. Valdes is the managing partner of the firm's Tampa office. Mr. Valdes is one of only 237 lawyers in the entire state of Florida that is a Florida Bar Board Certified Specialist in the area of Business Litigation. For almost 20 years Mr. Valdes has handled commercial and residential foreclosure and eviction cases across the State of Florida. Additionally, Mr. Valdes has litigated extremely complex contract and real estate cases in state business courts and federal courts. 

Ruben Laboy is an Associate Attorney in the Firm’s Orlando office.  Mr. Laboy has experience in handling foreclosure, eviction and bankruptcy cases.

This article is for informational purposes only and you should seek professional legal advice before taking any action based on this article.  Further, this information is subject to change due to the rapidly changing legal, political and business environment.