It’s the End of the CDC Eviction Moratorium–What’s Next?

Whitman Legal Solutions, LLC

Whitman Legal Solutions, LLC

During Act I of Puccini’s opera La Boheme, a group of destitute artists gather in their garret to celebrate having received food, wine, and money one of them has collected from a nobleman. Their revelry is interrupted by a knock on the door. The landlord, Benoit, has arrived to collect their rent.

Not to be deterred from their celebrations, the artists invite Benoit to join them. The artists share their wine with Benoit, who, while drunk, brags about his extramarital exploits. The artists then use feigned disgust as an excuse to oust Benoit from the garret, and that’s the last we hear of him in the opera.

Most tenants who don’t pay their rent on time can’t rid themselves of their landlords that easily. However, under eviction moratoriums adopted due to the COVID-19 pandemic, many tenants have been able to avoid being evicted for nonpayment of rent.

Early in the pandemic, there was a patchwork of federal, state, and local eviction moratoriums, so not all rental housing was covered by a moratorium. On September 4, 2020, the CDC issued an order declaring a national eviction moratorium (CDC Moratorium), which was extended several times. The CDD Moratorium remained in effect until August 26, 2021, when, after a series of court rulings and appeals, the United States Supreme Court issued an order that ended the moratorium (Supreme Court Order).

This article discusses what landlords and tenants should expect in the aftermath of the Supreme Court Ruling.

Federal Executive Branch Response to the Supreme Court Ruling

It didn’t take long for federal government officials to react to the Supreme Court’s ruling. The next day, the Secretary of the Department of Housing and Urban Development (HUD), Secretary of the Treasury (Treasury), and Attorney General issued a Joint Letter (Joint Letter) addressed to “Governors, Mayors, County Executives, and Chief Justices/State Court Administrators” urging them to take action to prevent evictions.

The Joint Letter expressed concern that emergency rental assistance (ERA) funds weren’t being distributed to landlords and tenants even though the government recently simplified application procedures. The Joint Letter urged that “No one should be evicted before they have the chance to apply for rental assistance, and no eviction should move forward until that application has been processed.”

Because the Supreme Court ruled that the CDC didn’t have the authority to prohibit evictions (and Congress hasn't done so), the Joint Letter urges state and local action in:

  • Enacting state and local eviction moratoriums

  • Requiring landlords to apply for ERA before filing eviction cases

  • Delaying eviction cases while ERA applications are pending

  • Using ERA and American Rescue Plan State and Local Fiscal Recovery Funds to pay for tenants’ attorneys and to prevent evictions

  • Helping tenants with ERA applications

The Joint Letter's focus on ERA sounds worthy, but its emphasis on state and local governments may be misplaced. Although only 11% of ERA had been distributed, housing advocates blamed the delay on a slow rollout by the Treasury Department and burdensome approval process. The president of the National Apartment Association, which represents landlords, called the ERA rollout “a disaster, marred with programmatic inefficiencies and difficulties.”

Landlords want to receive rent payments. They are already incentivized to help tenants file for ERA if they qualify. It costs landlords money to evict tenants, fix up apartments for new tenants, and find new tenants, so landlords have no reason to evict tenants if they know ERA is coming.

But not everyone is eligible for ERA. Only tenants who have suffered a loss of income or certain other financial hardships can apply. And among those who have suffered hardship, only tenants whose income is at or below 80% of the area median income (AMI) qualify. So struggling families with income equal to the median won't be eligible for ERA.

After applying, ERA payments to landlords have been slow to be approved and paid. And after months of not receiving rent, some landlords' pocketbooks are as empty as those of their tenants. On the eve of the Supreme Court Ruling, Treasury relaxed ERA rules so that landlords can receive ERA funds pending approval of ERA applications, which may speed up the ERA process.

Once approved, tenants can use ERA to pay past-due rent back to March 13, 2020. However, ERA lasts a maximum of 18 months. So, a tenant whose eligibility dates to March 2020 will have used up their eligibility in September 2021.

After that, the Consumer Financial Protection Bureau suggests that tenants may be eligible to receive assistance from local programs. Many of those programs only assist very low income tenants. For instance, in Montgomery County, Maryland, where my office is located, only tenants with incomes below 50% of the AMI qualify for aid, leaving many who qualified for ERA without help.

Evictions During the CDC Moratorium

The CDC Moratorium didn’t prohibit all evictions. Only tenants who met income requirements and submitted a prescribed Eviction Protection Declaration (Declaration) couldn't be evicted. The Declaration includes a tenant certification they have attempted to obtain housing assistance (including ERA), are paying as much rent as they can afford, and that eviction would likely leave them homeless or in a congregate or shared living situation.

Even if a tenant submits a Declaration, the landlord still can send notices to vacate, get judgments for past-due rent, file eviction cases, and even obtain an eviction order. The only thing the landlord couldn't do is physically remove the tenant from their rental unit.

And the CDC Moratorium didn’t affect evictions for other reasons. Tenants still could be evicted for violating their leases, violating community rules, damaging property, or engaging in criminal behavior.

Most importantly, a landlord could evict tenants who "held over" and stayed in their rental units after their leases expired. Since most apartment leases are one-year leases, it’s likely that most tenants’ leases expired during the pandemic. If the landlord refused to renew their leases, those tenants would be subject to eviction for holding over and would not have been protected by the CDC Moratorium.

The CDC Moratorium also imposed no control on rent increases. Landlords could impose huge rent increases upon lease renewals. And tenants who couldn’t meet the requirements for a Declaration could be evicted for not paying the increased rent.

What’s Next

The impact of the Supreme Court’s ruling may depend upon where the tenant lives. In states with an eviction moratorium, tenants shouldn’t see a change. But most states don’t have moratoriums.

Many state moratoriums expire soon. Maryland had an eviction moratorium by executive order of the Governor, but that expired on August 15. New York has already said they will suspend evictions for tenants with pending ERA applications, but it hasn't yet extended the expiration of its eviction moratorium on August 31. Illinois’ moratorium expires on September 18, and California’s will expire at the end of September. And District of Columbia’s moratorium will expire on October 21.

Other states have allowed eviction cases to move forward as usual, only delaying the physical eviction of the tenants. In those states, physical evictions are likely to start immediately. Tenants who have judgments for eviction against them should expect to be set out soon.

But in most states, a tenant set out isn’t automatic and instantaneous. For instance, in Maryland, even after receiving an eviction judgment, a landlord can't forcibly evict a tenant unless they obtain a Warrant of Restitution from the court. After the Warrant of Restitution is issued, a sheriff will set out the tenant and forcibly remove them from the rental unit. But due to staffing limitations, the process could take weeks under normal circumstances, and it could take longer with a backlog.

Some courts haven't allowed filings for evictions for nonpayment of rent. Others haven't been scheduling those evictions for hearing. In those jurisdictions, there may be a months-long backlog that could push the eviction process into 2022.

The backlogs and inherent procedural delays in the eviction process provide ample time for state and local governments to adopt eviction moratoriums–if they are so inclined. So, although the CDC Moratorium is over, it’s likely that in some parts of the country, similar moratoriums will be adopted.

This series draws from Elizabeth Whitman’s background in and passion for classical music to illustrate creative solutions for legal challenges experienced by businesses and real estate investors.

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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