On April 1, 2020, Governor Mike DeWine signed an Executive Order for the state of Ohio requesting landlords and lenders put a “pause” on rent and mortgage payments for 90 days for small business commercial tenants. You can read the order here.

Rent Pause

The order asks that Landlords suspend, for a term of at least 90 consecutive days, all rent payments for such business tenants that are facing financial hardship due to the COVID-19 pandemic. In addition, landlords are requested to provide for a moratorium on evictions of small business tenants for at least 90 days. Franklin County, prior to this Order, already had a rule that evictions can still be filed, but the court hearings to move those forward for non-payment have been stayed for now.

Mortgage Pause

Since tenants not paying rent will affect landlords’ abilities to pay their mortgages, the Order has terms for lenders as well. Similarly, lenders are requested to provide their commercial real estate borrowers with at least 90 days forbearance of their mortgage. The Order defines “forbearance” to cover non-enforcement of remedies including default provisions, filing lawsuits, seizing money, and any requirement that a party waive any legal rights or admit any default arising as a result of the COVID-19 pandemic. Importantly, if mortgage payments are paused, the payments should be added to the end of the loan period. The is order is in line with the federal government previously putting a freeze on foreclosures for government-backed mortgages.

Next Steps

While this is good news for tenants and landlords with mortgages, the “requested” language is somewhat vague. It is yet to be seen how, or if, this will be enforced on tenants. Additionally, the state may have a hard time citing the authority that would give it the right to implement the terms of the Order. However, landlords and tenants would be advised to follow the Order. Next, the Order states the amount of time as “at least” 90 days. It is possible we see this order receive a time extension.

There will likely be more to come on this Order.