COVID & CDC Prevent More Evictions
STOP THE EVICTIONS:
On September 4, 2020, the Centers for Disease Control and Prevention (CDC), a Department within the Health and Human Services (HHS) of the Federal government, issued an Order (Under Section 361 of the Public Health Service Act (42 U.S.C. 264) and 42 CFR 70.2). This Order, as outlined below, in covered cases, prohibits eviction of tenants from residential property.
Ouch! Really, asked many landlords: How am I to pay my mortgage and other expenses, if he tenants do not pay me?!
MORATORIUM ON EVICTIONS:
This issue on moratoriums on rent payments was examined in a prior Tip. That Tip addressed the moratoriums that were issued by many state and local governments, along with one that impacted some properties that involved Federally insured loans. However, this recent CDC order is new; in many areas it provides for broader coverage than many of the prior executive orders that restricted evictions.
The 9/4 Order references the current pandemic, respiratory disease, also known as Covid-19 (C-19) and its impact in the US and throughout the world. (It is assumed that these statements were contained in the Order to provide a nexus between the CDC and its (alleged) authority to issue the Order.) After reviewing some of the history of C-19, along with the illnesses and deaths generated from the same, the Order outlined the broad scope of those impacted by the moratorium on eviction of tenants.
The Order stated:
“… a landlord, owner of a residential property, or other person  with a legal right to pursue eviction or possessory action, shall not evict any covered person from any residential property in any jurisdiction to which this Order applies during the effective period of the Order. This Order does not apply in 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 this Order.”
WHO CAN AVOID THE EVICTION?
Those tenants that are protected by this Order are those that meet the following five tests:
“(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), (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 extraordinary7 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 nondiscretionary 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.”
It is obviously easy for many tenants to meet these tests. The theory supporting this Order is that such evictions can lead to more C-19 issues and to more homeless people.
DOES THE TENANT STILL HAVE TO PAY THE RENT?
The tenant remains liable for the rent. The Order stated:
“This Order is a temporary eviction moratorium to prevent the further spread of COVID-19. This 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 this 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.”
WHAT IF THE LANDLORD VIOLATES THE ORDER?
The Order also has criminal sanctions that apply for a violation of the same. The Order was effective when published in the Federal Register and it is effective through 12/31/2020, unless otherwise modified, extended or rescinded.
There are many unanswered questions that have issued following the promulgation of this Order. One of the most fundamental questions is whether this Order is within the authority of the CDC to declare the same. The judicial system may make this determination.
Dr. Mark Lee Levine,
Professor, University of Denver