Governor DeSantis Extends But Clarifies Moratorium on Foreclosures

Florida Governor Ron DeSantis has just extended the moratorium on evictions and foreclosures until the beginning of September 2020. Importantly, as he did so, the Governor clarified several aspects of the moratorium. See Executive Order 20-180.

First, the moratorium now only applies to residential properties, meaning that commercial properties are subject to foreclosure and/or eviction without restriction. Second, the moratorium now only applies to “final action” at the “conclusion” of a “proceeding.” This clarification allows commencement of both foreclosure and eviction proceedings during the moratorium. The order clarifies that the moratorium applies only to the foreclosure sale or writ of possession and not to the filing and continuance of proceedings. This clarification is particularly significant in the foreclosure context, because such actions sometimes proceed for a significant length of time.

Allowing actions to proceed, subject to the abatement of any final action, mitigates the backup of cases that would otherwise occur if the filing and litigation of foreclosure actions were completely prohibited during the crisis. This clarification in the order relieves local clerks and judges determining the scope of the moratorium and ensures uniform policy throughout the state. Previously, counties and circuits varied in administration of the moratorium, with some clerks refusing to docket foreclosures, while other jurisdictions simply suspended final foreclosure sales, as under the clarified order.

Parties seeking relief under the Governor’s moratorium must show “loss of employment, diminished wags or income, or other monetary loss realized during the Florida State of Emergency directly impacting the ability [to make payments].” Thus, parties who were in arrears prior to Coronavirus or who simply fail to pay without good cause linked to Coronavirus, are not protected by the moratorium. The Governor’s order does not state that the moratorium must specifically be invoked, but creditors and landlords may attempt to proceed by showing that their borrowers or tenants are not adversely affected by Coronavirus.

Under the clarified moratorium, litigation regarding commercial properties and foreclosures of multifamily properties may proceed as normal. Residential tenants and single-family homeowners, however, will continue to be protected from being forced from their homes for the duration of the moratorium. Tenants and mortgagors (homeowners) should continue to make payments if possible, however, because the Governor’s order does not relieve parties from payments. Given the economic and business realities, it is likely that many foreclosure and eviction cases will be subject to negotiated workouts or payment plans.

Michael P. Beltran is Counsel in our Florida office.