CDC Issues Eviction Moratorium, but Will It Survive Legal Challenge?

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The Centers for Disease Control (CDC) recently issued a sweeping moratorium on most evictions through the end of 2020 as a means to stop the spread of COVID-19, which will go into effect on September 4, 2020. According to government estimates, the order will cover up to 40 million renters nationwide. This unprecedented exercise of power, however, may not withstand the legal challenges that are sure to be brought by landlords and property owners.

The moratorium applies to residential properties nationwide and is available for tenants who earn no more than $99,000 in annual income for an individual or $198,000 for a couple. To halt an eviction, a covered tenant must provide notice to his landlord or the owner of the property under penalty of perjury that he cannot pay the full rent due to substantial loss of income and an eviction would likely render him homeless or force him to move into a “shared living setting.” The order does not provide any financial assistance or other relief for landlords and property owners.

The order is not clear as to whether it bars evictions of persons occupying properties that are owned by a mortgagee or third party after a mortgage is foreclosed. The order expressly states that it does not prohibit foreclosures on home mortgages, but the CDC stops short of saying that the order does not apply to foreclosed properties. The order defines “evict” as applying to an “owner of a residential property, or other person with a legal right to pursue eviction.” The order also refers ambiguously to “housing contracts” and “housing payments,” rather than exclusively dealing in terms of rental or lease agreements and payments. However, the moratorium only applies to “residential property,” which is defined as “any property leased for residential purposes”—arguably not applying to property occupied following foreclosure.

As a basis for this extraordinary exercise of power, the CDC’s order cites section 361 of the Public Health Service Act (PHSA). This provision allows the CDC to make and enforce regulations 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.” The CDC’s order also cites 42 CFR § 70.2, a portion of the Code of Federal Regulations that allows the CDC to “take such measures to prevent such spread of the diseases [deemed] reasonably necessary” when the CDC determines that measures taken by any state are insufficient to stop the spread of diseases.

In the past, section 361 has been used to forcibly quarantine a nurse after caring for Ebola patients in Africa, regulate the sale of raw milk, and prohibit the sale of baby turtles, among other things. The CDC’s use of section 361 to prohibit evictions nationwide, however, is a magnitude beyond any previous exercise of power under this law.

When the CDC’s order is invariably challenged in courts, the order might be struck down for various reasons, including that the order violates the Administrative Procedures Act or violates the Constitution’s Takings Clause, Due Process Clause, Commerce Clause, or Contracts Clause. In the meantime, mortgagees proceeding with evictions risk violating the CDC’s order. Stayed tuned for further updates.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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