Updates on the CDC’s Recent Eviction Moratorium
September 10, 2020
As we previously informed you, on Friday, September 4, the CDC published an order to the Federal Register limiting residential evictions nationwide through December 31, 2020. Not surprisingly, landlords, builders, and other groups within the housing industry are now considering their options in determining how best to respond to this extensive moratorium.
The National Association of Home Builders (NAHB), a group representing developers and contractors, was one of the first to speak up. Last week, it announced that its members are considering filing a lawsuit and had summoned its attorneys to analyze what that lawsuit would look like. While noting that it was sympathetic to the plight of renters right now, the NAHB also stressed that without financial help from Congress, landlords cannot afford to keep footing the bill for non-paying tenants. In addition to potentially filing a lawsuit, the NAHB also indicated that another option could be to seek compensation for carrying out the CDC’s order. Notably, the federal government has not put aside any new aid to reimburse landlords whose tenants have fallen behind on rent, despite the fact that landlords can do nothing to evict those tenants under the CDC’s order until 2021.
The National Multifamily Housing Counsel, which represents owners of apartment buildings, also made clear that it is looking into the enforceability of the CDC’s order, but noted that rental assistance would be a far better solution than an eviction moratorium, which merely puts housing providers at financial risk without addressing the root cause of the issue.
The order issued by the CDC is unprecedented in its nature and it remains unclear how a legal action challenging the order would play out in the event one is filed. In the meantime, the debate over additional relief is set to resume in Congress this month prior to an October 1, 2020 government funding deadline. Previously, Democrats had hoped to halt evictions while simultaneously setting aside $100 billion in rental assistance for families. Democrats argued that an eviction moratorium without rent relief would simply leave families with a massive bill once the moratorium expires. Republicans did not include significant new rental assistance in their version of the bill, which was put forward in July. A modified version of the bill may hit the full chamber as early as next week.
For now, as we previously reported, the CDC’s order includes five criteria to qualify as a “covered individual” and requires a renter to take affirmative steps in order to show they qualify as a covered individual, including that individuals must make under $99,000 a year, couples must make under $198,000 a year, or must have received stimulus payments under the Cares Act. Renters must swear under criminal penalty they have done everything in their power to pay rent and obtain other assistance before taking advantage of the new eviction protections. Renters are not released from rent payment obligations pursuant to the lease. Renters must also follow all the other terms of their lease and may still be evicted for reasons other than not paying rent. Additionally, state and local laws may supersede the CDC’s order, so long as such laws provide “the same or greater level of public-health protection” as the CDC’s order.
Landlords may be subject to penalties for non-compliance with the CDC’s order, so they are advised to consult with legal counsel on any questions about the eviction moratorium.
Levenfeld Pearlstein’s real estate and litigation attorneys will continue to monitor and report on any challenges to the CDC’s order. In the meantime, if you have any questions, please do not hesitate to contact us.