COVID-19 Update: CDC Announces a Nationwide Ban on Residential Evictions

Morgan Lewis - All Things FinReg
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Morgan Lewis - All Things FinRegThe Centers for Disease Control and Prevention (CDC) on September 1 issued an order under Section 361 of the Public Health Service Act to temporarily—at least through the end of 2020—halt residential rental evictions for Americans struggling to pay rent due to the coronavirus (COVID-19) pandemic. The CDC states that the ban is necessary to mitigate the spread of COVID-19, a historic threat to public health, by preventing homelessness and facilitating stay-at-home/social distancing directives.

As we wrote in a recent LawFlash, due to a standstill in negotiations for a further comprehensive stimulus package, US President Donald Trump recently signed two executive actions that purportedly extend various aid measures for individuals impacted by the COVID-19 pandemic. One of these actions was an executive order to provide relief for homeowners and renters. That executive order stated, “The Secretary of Health and Human Services and the Director of CDC shall consider whether any measures temporarily halting residential evictions of any tenants for failure to pay rent are reasonably necessary to prevent the further spread of COVID-19 from one State or possession into any other State or possession.” This CDC order may be either an independent action by the agency or a result of the president’s executive order, or some combination of both.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Federal Housing Finance Agency (FHFA) also have provided their own limited eviction moratoriums, as we have previously reported, but the CDC’s ban applies to a broader spectrum of renters.

Under the terms of the CDC’s order, renters must sign a declaration stating the following:

  • They have used best efforts to obtain all available government assistance for rent or housing.
  • They expect to earn no more than $99,000 in annual income for 2020 (or no more than $198,000 if filing a joint tax return), were not required to report any income in 2019 to the US Internal Revenue Service, or received a stimulus check pursuant to the CARES Act.
  • They are 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.
  • They are 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.
  • Eviction would likely render them homeless—or force them to move into and live in close quarters in a new congregate or shared living setting—because they have no other available housing options.

The order does not apply in any state, local, territorial, or tribal area with a moratorium on residential evictions that provides the same or greater level of public health protection. In accordance with the Public Health Service Act, the order does not preclude state, local, territorial, and tribal authorities from imposing additional requirements that provide greater public health protection and are more restrictive.

Evictions for reasons other than nonpayment of rent will still be allowed, and the order does not prohibit foreclosures on home mortgages. The ban on evictions does not mean that tenants are not required to pay rent, make a housing payment, or comply with any other obligation that the individual may have under a tenancy, lease, or similar contract.

In addition, nothing in the order precludes the charging or collecting of fees, penalties, or interest as a result of a tenant’s failure to pay rent or other housing payment on a timely basis, under the terms of any applicable contract. However, the order does not specify what funding assistance tenants will receive in order to stay current with their rent payments, nor does it specify any way for landlords to be made whole for any lost rental income.

With respect to potential funding assistance, the order does state that the US Department of Housing and Urban Development (HUD) has informed the CDC that all HUD grantees—states, cities, communities, and nonprofits—that received Emergency Solutions Grant (ESG) or Community Development Block Grant (CDBG) funds under the CARES Act may use these funds to provide temporary rental assistance, homelessness prevention, or other aid to individuals who are experiencing financial hardship because of the pandemic and are at risk of being evicted. Similarly, the US Department of the Treasury has informed the CDC that the funds allocated through the CARES Act’s Coronavirus Relief Fund may be used to fund rental assistance programs to prevent eviction.

Finally, the order states says that landlords and organizations that violate the ban will be subject to criminal penalties.

The order is effective September 4, 2020 through December 31, 2020, unless extended, modified, or rescinded.

[View source.]

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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