CDC Eviction Moratorium: Questions and Answers for Landlords
On September 4, 2020, the Center for Disease Control issued an order entitled, “Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19.” While the title of the order would seem to be more or less self-explanatory, many landlords were left with questions about the order and its potential effect on rental property and income. Several of those questions are explored here based on information available as of December 2, 2020.
What are the basic terms of the order?
Very generally, a landlord may not evict a residential tenant for nonpayment of rent if: (1) the tenant has used best efforts to obtain government assistance for housing, (2) the tenant expects to earn less than $99,000 in 2020, (3) the tenant is unable to pay rent due to a substantial loss of income or extraordinary out-of-pocket medical expense, (4) the tenant is using best efforts to make timely partial payments as circumstances permit, and (5) eviction would likely render the tenant homeless or force the tenant to live in close quarters with others in a new shared-living arrangement.
Does the CDC have the power to halt evictions?
For the time being, it appears so. Across the country, landlords have filed numerous lawsuits arguing that the order amounts to an unconstitutional taking of property by the government without just compensation. Judges have declined to grant these landlords temporary injunctive relief, thus putting on hold until the order expires or the case is tried or settled any evictions for nonpayment of rent of tenants who satisfy the order’s requirements.
Are rent payments still owed during this period?
Yes, renters still owe rent during this period. The order does not erase or forgive rent payments due during the term of the order. Rather, it simply disallows eviction as a remedy for nonpayment of rent. Additionally, tenants remain liable for applicable fees, such as late fees, that accrue during this time.
What about evictions for other reasons?
The order’s restriction on evictions is limited to evictions for nonpayment of rent. Landlords still may evict tenants for violation of other lease terms, such as engaging in criminal activity on the property or endangering the health and safety of other tenants.
When does the order expire?
At present the order expires on December 31, 2020. While 2020 has proven to be a difficult year in which to make predictions, an extension of the order, perhaps with some modification, seems likely. The imminent Presidential transition adds another layer of uncertainty regarding potential extension of the order.
What about mortgage payments on rental property?
To the consternation of many landlords, the order does not include any relief from mortgage payments on rental property affected by the order or any protection from foreclosure during the time the order is effective. However, many lenders have shown a willingness to work with mortgagees that are unable to meet their mortgage obligations during the pandemic. To assist in working out an agreement, or to help with other alternatives, landlords should consider consulting an attorney with experience in commercial lending matters to chart the best path forward.
by Andrew J. Gille