Richard Price, Harry Kelly and Brian Donnelly presented a virtual program on "Understanding mortgage forbearance, the eviction moratorium, and how owners can work with tenants." The presentation included a discussion of the current CDC order as state moratoria are scheduled to end.
Key takeaways from their conversation:
CDC Order
The CDC order went into effect on September 4, 2020. It prohibits eviction based on the nonpayment of rent to prevent the spread of COVID-19. It is an order to address public health, not a rule subject to the usual notice-and-comment process under the Administrative Procedure Act. If a state or local order is more restrictive, the state or local order takes precedence. The order does not prevent fees or penalties for not paying rent. The CDC order does not forgive rent that accrues during the moratorium period, so any unpaid rent at the end of the moratorium could be the basis for an eviction action at that point. Landlords are subject to criminal penalties for evictions in violation of the order, which can be anywhere from $100,000 to $500,000 and up to a year in jail. Tenants are subject to penalties if they perjure themselves when completing the form declaration required to trigger eviction protection under the order.
What is required by the declaration?
The form of declaration by the CDC must be completed by each adult listed on the lease or rental agreement. They must certify, among other things, that they meet certain maximum income requirements; that they have used best efforts to obtain government assistance; that they cannot pay rent due to loss of income or medical expenses; that they will make their best effort to make partial payments; and that they would become homeless or live in close quarters with others if evicted. They must also acknowledge their obligation to pay rent, interest and fees. A copy of the declaration form can be found here.
Can the CDC do this?
We will find out. There is a lawsuit pending in federal court in Georgia brought by four individual landlords of single-family properties and the National Apartment Association. The plaintiffs challenge the CDC order on statutory and Constitutional grounds. A preliminary decision in the case is expected sometime after October 16, 2020.
Is the CDC Order limited to COVID-19 related issues?
The questions on the form do not directly ask if the tenants' inability to pay rent is due to COVID-19-related causes. There are a number of different certifications a tenant must make, and they must satisfy all criteria. The CDC order does not prohibit eviction for causes other than nonpayment of rent, including criminal conduct, violence or violating other contractual obligations.
State/Local moratoria
There are limited protections in 19 states and Washington, DC, and they vary widely. For example, some states prohibit the filing of eviction proceedings, some allow landlords to file but automatically stay eviction proceedings, and some require tenants to appear in court to benefit from COVID-19-related eviction protections. We suggest checking with local counsel in states and locations where a property is located for the most up-to-date and accurate information about that jurisdiction's laws.