COVID-19: Maryland issues Executive Order Temporarily Halting Residential and Commercial Evictions

Maryland Governor Lawrence J. Hogan issued Order Number 20-04-03-01 on April 3, 2020 (the “Order”) that amends and restates an order previously issued on March 16, 2020 that, among other things, temporarily prohibits evictions of tenants suffering substantial loss of income due to COVID-19. The Order expands the coverage of the original order to temporarily prohibit commercial and industrial evictions.

The Order applies to Section 8—401 of the Real Property Article of the Annotated Code of Maryland (the “Real Property Article”) (i.e. repossession following failure to pay rent when due and payable) and Section 8-402.1 of the Real Property Article (i.e. proceedings upon breach of lease) and provides that:

“No court shall give any judgment for possession or repossession, or warrant for restitution of possession or repossession of residential, commercial, or industrial real property, if the tenant can demonstrate to the court, through documentation or other objectively verifiable means, that the tenant suffered a Substantial Loss of Income.”

Under the Order “Substantial Loss of Income” is defined as:

“Substantial Loss of Income” means (i) with respect to an individual, a substantial loss of income resulting from COVID-19 or the related proclamation of a state of emergency and catastrophic health emergency, including, without limitation, due to job loss, reduction in compensated hours of work, closure of place of employment, or the need to miss work to care for a home-bound school-age child; and (ii) with respect to an entity, a substantial loss of income resulting from COVID-19 or the related proclamation of a state of emergency and catastrophic health emergency, including, without limitation, due to lost or reduced business, required closure, or temporary or permanent loss of employees.

The Order further clarifies that the fact that the tenant, or any person permissibly cohabiting with the tenant in accordance with the terms of the lease, has a confirmed diagnosis of COVID-19 or is under investigation for COVID-19, shall not constitute a “clear and imminent danger” of the tenant’s or other person’s doing harm to themselves, other tenants, the landlord, the landlord’s property, or any other person on the property, for the purposes of establishing that there has been a breach of the lease.

The Order provides that the prohibitions regarding evictions are in effect until the state of emergency is terminated and the catastrophic health emergency is rescinded.

It is noted that the Order only temporarily prohibits landlord eviction actions and does not expressly relieve or reduce any tenant payment obligations (including late fees, interest or other damages) or prohibit the application of any security deposits or the drawing of any letters of credit. Although not addressed in this Alert, it is further noted that the Order expressly prohibits the initiation of residential foreclosures, but does prohibit commercial foreclosures.

Duane Morris has created a COVID-19 Strategy Team to help organizations plan, respond to and address this fast-moving situation. Contact your Duane Morris attorney for more information. Prior Alerts on the topic are available on the team’s webpage.

For Further Information:

If you have any questions about this Alert, please contact Thomas Totten, Gordon Knox or any member of the COVID-19 Strategy Team or the attorney in the firm with whom you are regularly in contact.

P-3s and Opportunity Zones – An Update on a Few Fronts

P-3s and Opportunity Zones – An Update on a Few Fronts – Brad A. Molotsky, Esquire

Infrastructure and P-3s – The Move America Act of 2019 (H.R. 1508) was re-introduced again yesterday by Reps. Jackie Walorski, R-Ind. and Earl Blumenauer, D-Ore. The Bill attempts to spur investment in infrastructure improvements through the issuance of Move America Bonds and Move America Credits.

The proposed bill would expand tax-exempt private activity bonds for infrastructure and create a federal infrastructure tax credit to fund infrastructure projects through public-private partnerships (P-3s). Sens. John Hoeven, R-N.D., and Ron Wyden, D-Ore., introduced the Senate companion bill (S. 146) in January.

Previous versions of the Move America Act were introduced in the Senate in 2015 and in the Senate and House in 2017.

According to the team at Novogradac, the House Ways and Means Committee is holding a hearing today on infrastructure reform and House leadership has tentatively targeted late spring for major infrastructure legislation on the House floor, which could include the Move America Act and other tax credit provisions from the Affordable Housing Credit Improvement Act and the New Markets Tax Credit Extension Act.

States incentivizing investments in their designated Federal Opportunity Zones.

Maryland – The Maryland legislature introduced HB 1141 this past week according to our sources at Novogradac. This bill would enable the creation of a state affordable housing tax credit effective in 2020. It would also create a “Qualified Maryland Housing Tax Credit” for properties that qualify for the federal low-income housing tax credit (LIHTC) and are in areas designated as “community revitalization areas”. These community revitalization areas are areas that include Opportunity Zones. The bill sets an annual statewide cap of $10 Million and no requirement that the development also receive federal LIHTCs.

Rhode Island – A bill in the Rhode Island House of Representatives (HB 5808) would create a tax credit for 10% of a taxpayer’s opportunity zones (OZ) investment in Pawtucket and Central Falls, R.I. Per the draft bill, a qualified opportunity fund would be required to invest at least $250,000 in the OZ for the participants to receive the credit. The tax credit could be taken in the year in which a qualified OZ business is placed in service.