Landlords: Beware of Important New CDC Eviction Moratorium

Effective September 4, 2020, the Centers for Disease Control and Prevention (“CDC”) imposed a moratorium on residential evictions. The CDC eviction moratorium is contained in an agency order entitled Temporary Halt in Residential Evictions To Prevent the Further Spread of COVID-19, 85 FR 55292. This Order stops evictions through December 31, 2020, to prevent further spread of COVID-19. Below are key takeaways for residential landlords.

Who is Subject to the CDC Eviction Moratorium, and Who is Not?

The Order generally applies to all landlords (including individuals and legal entities) in every State and every U.S. territory, and it prohibits them from evicting a “covered person” from any residential property (with several limited exceptions).

A “covered person” is “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 containing certain statements.

The Order doesn’t apply to any State or other local areas that provide a similar or greater level of protection. It also doesn’t apply to American Samoa, which has no cases of COVID-19 (until cases are reported).

Also, the Order explicitly does not prohibit foreclosures of home mortgages, so lenders can still foreclose if the borrower defaults on the mortgage. The Order, however, would prevent the lender (i.e., the “owner of the residential property or other person with a legal right to pursue eviction or a possessory action”) from evicting the occupant following a foreclosure proceeding if he or she is a covered person.

Exceptions to the CDC Eviction Moratorium

The Order does not prevent evictions due to a tenant:

“(1) Engaging in criminal activity while on the premises;

(2) threatening the health or safety of other residents;

(3) damaging or posing an immediate and significant risk of damage to property;

(4) violating any applicable building code, health ordinance, or similar regulation relating to health and safety; or

(5) violating any other contractual obligation, other than the timely payment of rent or similar housing-related payment (including non-payment or late payment of fees, penalties, or interest).”

Tenants Must Act to Invoke the CDC’s Order

To invoke the CDC’s Order and its prohibition on evictions, the tenant(s) must execute and deliver the required declaration to their landlord.

Before delivering the declaration to the landlord, a tenant is not a “covered person” and, therefore, not subject to the protections afforded by the Order.

What Statements Must the Tenant’s Declaration Contain?

The declaration must contain the following statements from the tenant, made under penalty of perjury:

• “I have used best efforts to obtain all available government assistance for rent or housing”

• “I either expect 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), was not required to report any income in 2019 to the U.S. Internal Revenue Service, or received an Economic Impact Payment (stimulus check) pursuant to Section 2201 of the CARES Act”

• “I am unable to pay my full rent or make a full housing payment due to substantial loss of household income, loss of compensable hours of work or wages, lay-offs, or extraordinary out-of-pocket medical expenses”

• “I am 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 nondiscretionary expenses”

• “If evicted I would likely become homeless, need to move into a homeless shelter, or need to move into a new residence shared by other people who live in close quarters because I have no other available housing options”

• “I understand that I must still pay rent or make a housing payment, and comply with other obligations that I may have under my tenancy, lease agreement, or similar contract. I further understand that fees, penalties, or interest for not paying rent or making a housing payment on time as required by my tenancy, lease agreement, or similar contract may still be charged or collected.”

• “I further understand that at the end of this temporary halt on evictions on December 31, 2020, my housing provider may require payment in full for all payments not made prior to and during the temporary halt and failure to pay may make me subject to eviction pursuant to State and local laws,” and

• “I understand that any false or misleading statements or omissions may result in criminal and civil actions for fines, penalties, damages, or imprisonment.”

A covered person can use the CDC’s form declaration or a similar document made under penalty of perjury.

When Does the Moratorium Expire?

The CDC eviction moratorium runs through December 31, 2020, unless it is subsequently extended, changed, or terminated.

Do Tenants Still Have to Pay Rent under the CDC’s Order?

Yes! The CDC eviction moratorium does not excuse tenants from paying rent or complying with other obligations under the lease. Also, landlords can still charge and collect late fees, penalties, and interest as may be provided in the lease.

Who Enforces the CDC’s Order and What Are the Penalties for Violating It?

Federal and cooperating State and local authorities are to enforce the CDC’s Order.

Violations carry hefty criminal penalties. A person faces a fine of:

• Up to $100,000 if the violation doesn’t result in death or a year in jail, or both; and
• a fine of up to $250,000 if the violation does result in death or one year in jail, or both.

An organization faces a fine of up to $200,000 per event if the violation doesn’t result in death and up to $500,000 per event if the violation does result in death.

All information and other content on this site is for informational purposes only. It is not legal advice. You should not rely in any manner upon the information on this site or otherwise construe it as a legal opinion or legal advice. Consult with your lawyer regarding your particular issues and circumstances.

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