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04.06.20   |   COVID-19, Insights

Governor DeWine Requests Suspended, but not Negated Rent Payments and Loan Payments

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Ohio Governor Mike DeWine signed Executive Order 2020-08D on April 1, 2020, to address commercial evictions and foreclosures in relation to the COVID-19 crisis.

The Order is intended to provide relief to small business tenants and commercial real estate borrowers who may be suffering from the economic impacts of Ohio’s Stay-At-Home Order dated March 22, 2020, as amended April 2, 2020, and the COVID-19 pandemic.

Recognizing that during this public health emergency, commercial evictions and foreclosures would destabilize local economies and threaten designated essential businesses and operations, Governor Dewine requested the following actions in the Order:

  1. Landlords are requested to suspend for at least ninety (90) consecutive days, rent payments for small business commercial tenants in the State of Ohio that are facing financial hardship due to the COVID-19 pandemic; and
  2. Landlords are requested to provide for a moratorium of evictions of small business commercial tenants for a term of at least ninety (90) consecutive days; and 
  3. Lenders are requested to provide commercial real estate borrowers with a commercial mortgage loan for a property located in the State of Ohio an opportunity for a forbearance term of at least ninety (90) consecutive days for said mortgage as a result of financial hardship due to the COVID-19 pandemic.

Key Takeaways:

The Order expressly states that it shall NOT be construed to:

  1. Negate the obligation of a small business commercial tenant to pay rent, but requests that the landlord’s collection of rent be suspended for at least ninety (90) consecutive days.
  2. Relieve a commercial real estate borrower of its obligations to make loan payments, but that those obligations be paused to provide time for sensible solutions to be worked out among commercial real estate borrowers and lenders.
  3. Suspend any state or federal law.

In addition, the Ohio Supreme Court had previously tolled time limitations and deadlines for civil, criminal, and administrative proceedings that were set to expire between March 9, 2020, and July 30, 2020.  That administrative order may allow landlords and lenders to delay taking action that otherwise would have been required by the Ohio Rules of Civil Procedure.

Note that the Order is a request and not a demand upon commercial landlords and lenders.  There are no penalty provisions for failure to abide by the requests of the Governor.  The Order does not address tenants or commercial borrowers who may have already been in default prior to the arrival of the COVID-19 pandemic. The order remains in effect through July 1, 2020, unless modified or rescinded by Governor DeWine prior to that date.

Critchfield, Critchfield & Johnston has spent significant time in the past few weeks helping commercial landlords, tenants, borrowers, and lenders to analyze their options and prepare forbearance documentation.  We encourage you to reach out to one of our attorneys if you need any assistance.

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