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September 4, 2020

Relief for Residential Tenants Could Mean Hardship for Landlords

Following an Executive Order by President Trump, the Centers for Disease Control and Prevention (CDC) announced a temporary eviction moratorium intended to prevent the further spread of COVID-19, effective through December 31, 2020. The Agency Order, Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19, is available here: September 4, 2020 Agency Order.

The Agency Order prohibits landlords, owners of a residential property, or other persons with a legal right to pursue eviction or possessory action from evicting any covered person from any residential property. According to administration officials, this includes evictions that were already in process. A “covered person” means any tenant, lessee, or resident of a residential property who provides to their landlord, the owner of the residential property, or other person with a legal right to pursue eviction or a possessory action, a declaration under penalty of perjury indicating that:

1) The individual has used best efforts to obtain all available government assistance for rent or housing;

2) The individual either

(i) expects to earn no more than $99,000 in annual income for Calendar Year 2020 (or no more than $198,000 if filing a joint tax return), or

(ii) was not required to report any income in 2019 to the U.S. Internal Revenue Service, or

(iii) received an Economic Impact Payment (stimulus check) pursuant to Section 2201 of the CARES Act;

3) the individual is unable to pay the full rent or make a full housing payment due to substantial loss of household income, loss of compensable hours of work or wages, a lay-off, or extraordinary out-of-pocket medical expenses;

4) the individual is using best efforts to make timely partial payments that are as close to the full payment as the individual’s circumstances may permit, taking into account other non discretionary expenses; AND

5) eviction would likely render the individual homeless— or force the individual to move into and live in close quarters in a new congregate or shared living setting— because the individual has no other available housing options.(The CDC has published a declaration form that tenants may use that contains all the prerequisite language.)

The Agency Order is effective immediately in every jurisdiction, except that it does not apply to any State, local, territorial, or tribal area with a moratorium on residential evictions that provides the same or greater level of public-health protection than the requirements listed in the Agency Order. Nor does it apply to American Samoa.

Notably, the order “does not relieve any individual of any obligation to pay rent, make a housing payment, or comply with any other obligation that the individual may have under a tenancy, lease, or similar contract. Nothing in [the] Order precludes the charging or collecting of fees, penalties, or interest as a result of the failure to pay rent or other housing payment on a timely basis, under the terms of any applicable contract.” The Agency Order places no restrictions or caps on interest and penalties, so the terms of the lease (as governed by pre-existing law) will apply.

Finally, tenants may still be evicted for reasons other than not paying rent or other housing payment (including late fees, penalties, or interest). So, if the lease has other restrictions or if the lease terminates and is not renewed, the restrictions on evictions will not apply.