Gravel2Gavel Construction & Real Estate Law Blog
With the financial impacts of the COVID-19 pandemic continuing to be felt by the American public, the Trump Administration has taken steps to try to allay a coming eviction crisis by enacting a moratorium on evictions through the end of 2020. With the first eviction moratorium instituted by the CARES Act expiring, lawmakers have been pushing to include eviction protections in the next COVID-19 relief package. However, with Congressional leaders still far from an agreement on the next bill, the Centers for Disease Control and Prevention (CDC) has now used its emergency pandemic powers under the Public Health Service Act to temporarily halt residential evictions.
Under the Order, a landlord, owner of a residential property, or other person with a legal right to pursue eviction or possessory actions will not be permitted to evict any covered person through December 31, 2020. Under the Order, “covered persons,” are any tenant, lessee, or resident of a residential property who meets the five-part test included in the order and delivers the executed declaration to their landlord. The five requirements in the declaration, which must be certified under the penalty of perjury are:
- The individual has used best efforts to obtain all available government assistance for rent or housing;
- 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;
- 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 extraordinary out-of-pocket medical expenses;
- 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
- 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.
Under the Order, tenants may still be evicted for reasons other than nonpayment of rent, including for criminal activity or threatening the safety of other tenants or residents, damaging property, or violating health ordinances or building codes, and does not relieve any individual of the obligation to pay rent, make a housing payment, or comply with any other obligation in the interim. The Order also does not prevent landlords or residential property owners from charging fees, penalties, or interest as a failure to pay rent or other housing payments on time.
While only a temporary measure, this Order will relieve the threat of eviction for thousands who have recently lost their income due to the COVID-19 pandemic and qualify under the relatively strict parameters required by the declaration. However, the Order fails to fully address the issue of cumulating back payments of rent or other housing payments that will still need to be paid. Anyone facing homelessness if evicted, as necessary under the declaration, will be unlikely to be able to make these payments when the Order expires at the end of 2020. This Order merely delays the eviction crisis until January, or until Congress acts to implement additional protections.
Potentially more problematic for those hoping to rely on these protections is that the Order will likely be challenged in court as improperly enacted. The CDC grounds the Order in the “historic threat to public health” posed by the COVID-19 pandemic, and highlights the need for eviction moratoria given that housing insecurity, moving into congregate housing, and homelessness all make quarantining, isolation, and social distancing difficult, if not impossible. However, this justification may not be sufficient to withstand the coming legal challenges. Under the Public Health Service Act, “The Surgeon General, with the approval of the Secretary, is authorized to make and enforce such regulations as in his judgment are necessary to prevent the introduction, transmission, or spread of communicable diseases … [including] inspection, fumigation, disinfection, sanitation, pest extermination, destruction of animals or articles found to be so infected or contaminated as to be sources of dangerous infection to human beings, and other measures, as in his judgment may be necessary.” (See 42 U.S.C. §254(a).) However, the statute also indicates that these measures must be “necessary to prevent the introduction, transmission, or spread of communicable diseases from foreign countries into the States or possessions, or from one State or possession into any other State or possession.” With COVID-19 already present in all 50 states and the District of Columbia, it is not clear that these measures would prevent the transmission from one State to another. Along with concerns that the Order was improperly signed and issued by the CDC, some have already declared it to be “almost certainly unauthorized, and to the extent that it gives hope to those in need, it delays the time for the government to [enact a bill] that will not be struck down in court.”
Ultimately, residential property owners and landlords should be familiar with these nationwide tenant protections. While legal challenges are likely, these protections will at least temporarily be in place, pausing evictions for covered individuals. With some studies indicating that a potential 30-40 million people may be facing eviction due to COVID-19, regardless of whether the CDC order is found to be legal, Congress will need to act to mitigate a coming housing crisis. Given political tensions over the next COVID-19 relief package, eviction relief measures are unlikely to be enacted prior to the November election.