On Wednesday, September 1, 2020, the Centers for Disease Control and Prevention (“CDC”) issued a temporary moratorium on residential evictions in an effort to prevent the further spread of COVID-19. The order entitled, “Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19” (the “Order”), is effective upon publishing in the Federal Register. It is currently scheduled to publish on September 4, 2020 and will continue through December 31, 2020. The Order is issued by the CDC as an “emergency action” under 42 C.F.R. 70.2, which gives the director of the CDC the authority to implement measures to prevent the spread of diseases where actions taken by state and local offices are determined to be inadequate or insufficient.

Unlike the 120-day moratorium on eviction filings under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, which expired on July 24, 2020 and applied only to those tenants in federally-funded rental properties, the Order applies to all residential properties nationwide, regardless of how the property is financed. Unfortunately, however, the Order does not provide any financial support or loan forbearance options to landlords or owners of rental property impacted by a tenant’s failure to pay.

I. Applicability of the Order

Pursuant to the Order, “a landlord, owner of a residential property, or other person^[1] with a legal right to pursue eviction or possessory action shall not evict any ‘covered person’ from any ‘residential property’ in any jurisdiction in which the Order applies” through December 31, 2020. “Residential property” means “any property leased for residential purposes, including any house, building, mobile home (or land in a mobile park), or similar dwelling,” but excludes any hotel, motel, or other property rented to temporary or seasonal tenants. “Covered person” means any tenant, lessee, or resident of a residential property that provides the Declaration (as defined below) certifying, under penalty of perjury, that they meet the criteria listed in Nos. 1-8 of Section II below to their landlord or other person with a legal right to pursue eviction. The Order does not, however, apply in any jurisdiction with an eviction moratorium in effect that affords equal or greater protection than that set forth in the Order.

To be clear, the temporary halt on evictions does not relieve the tenant’s responsibility to pay rent, make housing payments, or comply with other contractual obligations under a lease or similar contract but merely precludes landlords from evicting tenants while the Order is in effect (except in those circumstances listed in Section III below). As such, a tenant’s payment obligations are only deferred, and tenants will be required to pay all outstanding amounts upon expiration of the Order or risk an eviction action. Because of this, tenants are encouraged to and in fact required under the Declaration to certify that they will use best efforts to make timely partial payments that are as close to the full payment as the tenant’s circumstances allow. The Order also allows landlords to charge and collect fees, penalties, or interest that accrue due to a tenant’s failure to timely pay or perform other contractual obligations. Notably, the Order excludes “foreclosures on a home mortgage” from the definition of “evict” or “eviction.” Thus, the Order will not apply where a homeowner fails to make a timely house payment to a lender under a mortgage loan.

II. Declaration to Invoke the Protections of the Order

To utilize the protections under the Order, each person listed on a lease, rental agreement, or housing contract must provide an executed copy of the “Declaration Under Penalty of Perjury for the Centers of Disease Control and Prevention’s Temporary Halt in Evictions to Prevent Further Spread of COVID-19” form (the “Declaration”) to their landlord or other person who can have the tenant(s) evicted. You can find a copy of the Declaration form attached to end of the Order here. The Declaration requires individuals to self-certify that they meet certain income and hardship standards, that they have performed certain actions, and that they acknowledge the implications of the Order and the Declaration (Nos. 1-8 below) to take advantage of the eviction moratorium. In other words, other than the Declaration, a tenant does not have to provide any supporting documentation to a landlord to prove that they meet the criteria to be afforded the protections under the Order. The Declaration requires each individual tenant to certify, under penalty of perjury, that:

1. The individual has used best efforts to obtain all available government assistance^[2] for rent or housing;
2. The individual (i) expects to earn no more than $99,000 in annual income for the 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 Internal Revenue Service, or (iii) received a stimulus check;
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 layoff, or extraordinary out-of-pocket medical expenses^[3];
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;
5. If evicted the individual would likely be rendered homeless, need to move into a homeless shelter, or require the individual to move into a shared residence and live in close quarters with individuals because the individual has no other available housing^[4] options;
6. The individual understands that he/she/they must still pay rent or make housing payments, and perform all other contractual obligations under the lease and that the individual may be subject to fees, penalties, or interests due to late payments or non-payment;
7. The individual understands that, upon expiration of the Order, the landlord or owner of the subject residence may require payment in full of all outstanding amounts due under the lease or similar agreement, and an individual’s failure to pay may subject such individual to eviction; and
8. The individual understands that the Declaration is offered under the penalty of perjury and any false or misleading statements or omissions may result in civil or criminal actions, including fines, damages, or imprisonment.

III. Exception to Eviction Moratorium

It is important to note that, under the Order, tenants may still be evicted for: “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 timely payment of rent or similar housing-related payment.”

IV. Criminal Penalties for Violation

Any person found to have violated the Order “may be subject to a fine of no more than $100,000 if the violation does not result in a death or one year in jail, or both.” If a violation results in a death, however, the person may be subject to a “fine of no more than $200,000…or one year in jail, or both, or as otherwise provided by law.” On the other hand, organizations that violate the Order “may be subject to a fine of no more than $200,000 per event if the violation does not result in a death…or $500,000 per event if the violation results in a death or as otherwise provided by law.”

As stated above, the Order is not yet in effect and, therefore, is subject to change prior to publishing in the Federal Register (it is scheduled to publish on Friday, September 4, 2020). Ulmer’s Real Estate Practice Group is tracking and reporting on rapidly occurring changes in the real estate industry as a result of COVID-19 and will continue to provide updates regarding the Order as more information becomes available.

^[1] The Order defines “person” to include corporations, companies, associations, firms, partnerships, societies, joint stock companies, and individuals.

^[2] “Available government assistance” means any governmental rental or housing payment benefits available to the individual or any household member.

^[3] An “extraordinary medical expense” means an unreimbursed medical expense likely to exceed 7.5% of the tenant’s adjusted gross income for the year.

^[4] “Available housing” means any available, unoccupied residential property, or other space for occupancy in any seasonal or temporary housing that would not violate federal, state, or local occupancy standards and that would not result in an overall increase of housing cost to you