On September 4, 2020, the Centers for Disease Control and Prevention (“CDC”) issued an order to temporarily halt residential evictions of certain individuals for the nonpayment of rent through December 31, 2020 (“Order”). Based on the express language of the Order, the CDC aims to prevent the spread of COVID-19 by allowing some renters who are sick or at high risk to quarantine in their homes.
Even so, the scope of the Order is limited, as it only applies to residential tenants that meet these criteria:
- The individual has used best efforts to obtain all available government assistance for rent or housing;
- The individual either (i) expects to earn no more than $99,000 in annual income for the 2020 calendar year (or no more than $198,000 if filing a joint tax return), (ii) was not required to report any income in 2019 to the U.S. Internal Revenue Service, or (iii) received an Economic Impact Payment (i.e., stimulus check) pursuant to Section 2201 of the CARES Act;
- 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 lay‑off or extraordinary out-of-pocket medical expenses;
- 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; and
- Eviction would likely render the individual homeless—or force the individual to move into and live in close quarters in a new congregate or shared living setting—because the individual has no other available housing options.
A tenant seeking to use the Order to avoid eviction must provide a declaration to the landlord certifying each of the above statements. However, neither the landlord nor the court overseeing the eviction proceedings has an affirmative obligation to make the tenant aware of the declaration and the eviction proceedings can proceed without it.
The moratorium presents three challenges for landlords and tenants:
- The CDC did not allocate any funds to fulfill rent payments. After the expiration of the Order, the tenant will still owe the entire rent remaining, interest and any late fees. The ban merely delays the end result for the 40 million Americans at risk of eviction and offers no financial relief for landlords. The CDC is encouraging landlords and tenants to connect with local and state authorities to access funds that may be available through the U.S. Department of Housing and Urban Development (“HUD”). HUD allocated $4 billion in Emergency Solutions Grants and $5 billion in Community Development Block Grants, including $2 billion in grants focusing on areas with increased eviction risk. Contact information for many of these authorities can be found on the HUD website.
- States apply the Order differently, which may limit the availability of the protections offered by the Order. In Maryland, for example, courts may require other evidence from the tenant in addition to the declaration. In Michigan, it is largely up to the judge presiding over the eviction proceedings to determine to what stages of an eviction the moratorium applies.
- Legal representation is largely unequal between landlords and tenants, making it unlikely many vulnerable tenants will be made aware of the declaration. An estimated 90% of landlords have legal representation compared to only 10% of tenants. As the landlord is not required to inform the tenant of the moratorium, many tenants may not be aware of their rights and not submit the declaration before the landlord obtains a judgment for eviction.
As of November 2, 2020, there is no nationwide injunction in place preventing or limiting the application of the Order, but some landlords assert the CDC overstepped its authority and placed a disproportional financial burden on the landlords. Although state and local law traditionally guide landlord-tenant law, the CDC issued the order per its authority under Section 361 of the Public Health Service Act (42 U.S.C. § 264) and federal regulations codified at 42 C.F.R. § 70.2. That law authorizes the Health and Human Services Secretary to take measures to prevent the interstate spread of communicable disease in the event of inadequate local control.
The CDC identifies people experiencing homelessness as an at-risk population and seeks to limit the growth of this group caused by the economic effects of the pandemic. Homeless shelters have seen high rates of COVID-19 cases as beds are typically not spaced-out and shelter clients often do not have access to the resources necessary to adequately adhere to public health recommendations. The CDC fears the result of not delaying evictions would be an increase in homeless shelter occupancy or a greater unsheltered population, either of which would contribute to the spread of COVID-19.
Yet a group of landlords in Northern Ohio challenging the Order claims the CDC too broadly interprets the “other measures” provision of the federal law that authorizes the CDC to act to prevent the spread of disease. Although the Order cites multiple studies on the spread of COVID‑19 in homeless shelters, the lawsuit claims the CDC does not have substantial evidence that this action will advance the CDC’s cited public health goals. Landlords and tenants should monitor these lawsuits over the coming months as each makes its way through the state and federal court systems.
If you have any questions or would like additional information, please contact:
- Andrew Dick at (317) 977-1491 or adick@wp.hallrender.com;
- Addison Bradford at (317) 977-1403 or abradford@wp.hallrender.com;
- Libby Park at (720) 282-2028 or lpark@wp.hallrender.com; or
- Your regular Hall Render attorney.
Special thanks to Ben Jamison for his assistance with preparing this article.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
