As part of the federal government’s response to the COVID-19 pandemic, the Coronavirus, Aid, Relief and Economic Security Act (CARES Act) established a 120-day eviction moratorium for evictions based on non-payment of rent for certain covered properties. Though this moratorium formally ended on July 25, 2020, landlords and tenants alike may still want to take care to determine whether their rental properties are covered under the CARES Act because other eviction-related restrictions could still apply.
Here are some tips that might help determine whether your rental property may be covered under the CARES Act:
The CARES Act Eviction Moratorium Expired: Now What?
Even though the federal eviction moratorium has officially ended, landlords of covered properties may still want to proceed with caution in eviction actions for non-payment of rent. The CARES Act continues to impose two main restrictions on landlords. First, the CARES Act continues to restrict a landlord of a covered property—meaning any property that (A) participates in certain federal assistance programs, or (B) is subject to a federally backed mortgage loan or federally backed multifamily mortgage loan—from assessing tenants fees, penalties, or other late charges related to any nonpayment of rent that occurred during the 120-day federal moratorium period. Second, the CARES Act requires a landlord of a covered property who may want to evict a tenant for nonpayment of rent after the expiration of the federal eviction moratorium to serve the tenant with a 30-days’ notice to vacate. Accordingly, such residential landlords may be prohibited from filing for eviction against a tenant for nonpayment of rent until August 24, 2020.
Additionally, Arizona courts may require landlords to specifically attest to compliance with the CARES Act. Arizona Supreme Court Administrative Order 2020-119 requires plaintiffs seeking eviction for nonpayment of rent for any part of the eviction moratorium period—March 27, 2020 through July 25, 2020—to attest that the property in question was not covered under the CARES Act.
How to Determine if Your Rental Property is Affected by the CARES Act
Determining whether your rental property participates in a covered housing program or is financed by a federally backed mortgage loan—and therefore covered by the CARES Act—is nuanced. There is no known central database that definitively lists this information. In Arizona, a trip to your county recorder’s office will not necessarily clear the air, either. Although it may be possible to determine if the rental property is federally financed by reviewing the contents of any mortgages, deeds of trust, or other instruments recorded against the property, the nature of the loan as federally backed may not be disclosed on these documents. Thus, a review of the public record will not necessarily conclusively determine whether the property falls within a federal program and thus within the CARES Act eviction moratorium. Additionally, it may be harder to determine whether your rental property is receiving or is subject to certain federal housing assistance programs.
Below are some suggestions that may help both landlords and renters verify whether their rental property may have been covered under the CARES Act federal eviction moratorium.
- For renters, you can call your landlord and ask how the home or apartment building you are living in is financed: Does your landlord own the building, or is it financed by a loan? If it is financed, ask your landlord if the mortgage financing the property is federally backed.
- For landlords, you can call your lender or mortgage service provider and ask. Landlords may also be able to determine whether their loan is federally owned or backed by referring to their mortgage documents, such as mortgage closing documents and billing statements (particularly if they have a VA, USDA or FHA loan), as well as refer to any other account or servicer notices (which may include a notification that their loan has been transferred to another company or government agency).
- The following search tool can help in determining who owns the loans for both homes and for apartment buildings. Note that this information may not be accurate, or up-to-date. You may also require information from your landlord, such as the last four digits of the owner’s Social Security number, to use the search tools.
- The Mortgage Electronic Registration System (MERS) was created by the mortgage banking industry. The database keeps track of transfers and modifications to servicing rights and ownership of certain mortgage loans that are registered in the database:
- For landlords, you can submit a Qualified Written Request to the entity that you make your mortgage payments to requesting information on who owns the loan and how it was financed to determine if it is federally backed. This is known as a Request for Information. Under Regulation X of the Real Estate Settlement Procedures Act of 1974 (RESPA) 12 U.S.C. § 2601 et seq., the lender/service provider must acknowledge your request within five (5) business days and provide you with the information on who owns your mortgage or financed the loan of the apartment building within thirty (30 days). 12 CFR § 1024.36.
While the CARES Act eviction moratorium may have expired, landlords may still want to consider conducting due diligence before engaging in any eviction proceedings. Failure to do so may result in inadvertent misrepresentations to the court. Renters could research whether their rental properties are subject to the CARES Act protections. This inquiry may require consulting several sources to determine who owns the loan at issue. Snell & Wilmer attorneys are monitoring the changing circumstances surrounding the CARES Act and potential new relief Congress may pass.
Footnotes:
- https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Extends-Foreclosure-and-REO-Eviction-Moratoriums.aspx
