The CDC Did What?!

The CDC Did What
  • On Friday, September 4, the Center for Disease Control (“CDC”) issued an emergency order that puts a moratorium on many evictions throughout the United States.
  • If a tenant provides a declaration that he or she cannot pay rent because of COVID and make less than $99,000 then the landlord cannot evict them.
  • The order went into effect on September 4 and lasts through December 31.
  • Penalties for violating this Order are severe.

On September 4, 2020, the CDC issued an order (the “Order”) under Section 361 of the Public Health Service Act to temporarily halt residential evictions to prevent the further spread of COVID-19. The CDC stated that it needed to make this order now because any delay in the action “would be impracticable and contrary to the public health” given how easily the virus is spread and how many people have been infected.

The order is effective immediately (as of September 4) and lasts through December 31, 2020. In this article, I will spend most of the time explaining what the new rules are and what this means for landlords. And then I will discuss a little at the end what challenges should be made to this order.

IMPORTANT – The CDC’s order does not supersede local rules that are more stringent. So, for example, the City of Austin has additional eviction rules that we have discussed elsewhere in this blog and on our website (CITE). Those local rules must still be followed also.

Summary of the Order

A residential landlord can still start an eviction proceeding against a non-paying tenant. The tenant then has the burden of presenting a renter’s declaration (“Declaration”) to the landlord to invoke the Order. For the Declaration to be valid, there are five (5) statements that must be included which are outlined below. Once presented with a Declaration, we strongly recommend landlords halt all notice and eviction proceedings immediately.

Responsibility is on Tenant to Provide Declaration

Under the Order, a landlord is not allowed to evict a tenant who has provided a Declaration to the landlord that states the following:

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

  2. The individual either (i) will not earn more than $99,000 for 2020 (or $198,000 if filing jointly), (ii) was not required to report income for 2019, OR (iii) received a stimulus check pursuant to the CARES Act;

  3. The individual is unable to pay rent due to substantial loss of income, loss of compensable hours of work, a lay-off, or extraordinary out-of-pocket medical expenses;

  4. The individual is using their best efforts to make timely partial payments that are as close to the full payment as circumstances allow; AND

  5. Eviction would likely render the individual homeless or force them to live in a close shared-quarters.

If the tenant provides this Declaration, the Landlord should IMMEDIATELY cease all notice and eviction activity against the tenant.

What the Order Does Not Do

The Order does not relieve any obligation to pay rent or comply with other obligations under the lease. Nothing in the Order precludes the charging/collecting of fees or penalties because of the failure to pay rent.

Furthermore, nothing in the Order precludes evictions based: (1) criminal activity; (2) threatening health and safety of others; (3) damaging/posing immediate risk of damage to property; (4) violating building code or health ordinance; or (5) violating any other contractual obligation, other than timely payment of rent.

If a state or local authority has requirements providing the same or greater level of public-health protection than those provided for in the Order, the state’s or local authority’s requirements will apply.

Problems with the Order

There are many questions and issues with the order. It was drafted inartfully – most likely because the CDC does not know anything about residential real estate. Its completely out of its element on this issue.

For example, its not clear from the order whether a landlord can provide a notice of eviction or notice to vacate to a tenant who has given the landlord a Declaration. The language of the Order is vague. In addition, its also not clear whether a landlord can challenge the assertions a tenant makes in his or her Declaration. So there are many questions that still need to be answered. But…

Penalties for Violating the Order are SEVERE

The penalties for violating the Order are severe and costly. It is very important to let your regional manager know if a Declaration is received by a tenant to avoid any penalties or fines.

An organization violating the order may be subject to a fine of no more than $200,000 per event if the violation does not result in death or $500,000 per event if the violation results in death or as otherwise provided by law.

This is why we STRONGLY recommend stopping all eviction and notices IMMEDIATELY once you receive a Declaration from a tenant. If courts allow you to challenge that Declaration in the future, then we will set up a process for that. But until then, its not worth the risk.

Challenging the Order

On Friday, a number of lawyers around the country had a zoom call with the National Apartment Association. We all strongly encouraged the NAA to challenge this Order. It does not clear to me at all that the CDC has the power to do this. I also do not think the Order is constitutional. And, of course, this does not even address whether an eviction moratorium is necessary, good policy, or incredibly damaging to property owners.

The NAA said it is looking into all of its legal options and will have a response shortly. It also put out a statement condemning the Order. Hopefully its response further includes quickly filing a lawsuit challenging the Order. I will keep you updated if and when it does.

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