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Federal CDC Eviction Moratorium

Dear Members,

The Federal Government, through the Center for Disease Control (CDC), announced that effective September 4, 2020 it will adopt a temporary ban on Landlords taking action against residential Tenants for nonpayment of any charges. As a federal regulation, this applies in all states. Given the multitude of moratoria enacted in the wake of COVID-19 at the local, state, and federal levels, we refer to this most recent enactment as “the CDC Moratorium,” the requirements of which are outlined below.

DISCUSSION OF CDC MORATORIUM RULES

The CDC Moratorium prohibits Landlords from evicting any covered persons for nonpayment during the covered period. A covered person is a residential Tenant who provides their Landlord with a declaration made under penalty of perjury that states that:

  1. The individual has used best efforts to obtain all available government assistance for rent or housing;
  2. The individual either:
    • expects to earn no more than $99,000 in annual income for Calendar Year 2020 (or no more than $198,000 if filing a joint tax return),
    • was not required to report any income in 2019 to the U.S. Internal Revenue Service, or
    • received an Economic Impact Payment (stimulus check) pursuant to Section 2201 of the CARES Act;
  3. 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;
  4. 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
  5. 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.

Once a Tenant has given the Landlord this declaration, they become a covered individual subject to the protections of the CDC Moratorium for the covered period, which is September 4, 2020 through December 31, 2020 (unless extended). Once a Tenant triggers the protections of the CDC Moratorium, their Landlord is prohibited from taking any action to remove or cause the removal of that Tenant based upon nonpayment. Nonpayment could be for any debt incurred under the lease, such as nonpayment of rent, late fees, or other charges (including damages) owed to the Landlord as well as debts incurred to third parties, such as utilities in which the Tenant is the customer of record. The protection is drafted broadly and given the criminal and monetary liability (addressed below), should be interpreted to apply to issuance of any notices for nonpayment as well initiating or advancing any existing eviction cases for nonpayment. In addition, the CDC Moratorium does not directly address the issue of termination notices without stated cause; liability should be closely examined before issuing such notices and at a minimum should include a detailed non-monetary reason for its issuance if utilized.

The CDC Moratorium should not apply to anything other than unpaid charges as it explicitly does not apply to taking action related to a Tenant:

  1. engaging in criminal activity while on the premises;
  2. threatening the health or safety of other residents;
  3. damaging or posing an immediate and significant risk of damage to property;
  4. violating any applicable building code, health ordinance, or similar regulation relating to health and safety; or
  5. violating any other contractual obligation, other than the timely payment of rent or similar housing-related payment (including non-payment or late payment of fees, penalties, or interest).

CDC MORATORIUM PENALTIES

The penalties for violating these prohibitions sets a new bar for liability that is orders of magnitude higher than anything seen before in the Landlord-Tenant context. Any person violating the CDC Moratorium may be subject to a fine of no more than $100,000 if the violation does not result in a death or one year in jail, or both, or a fine of no more than $250,000 if the violation results in a death or one year in jail, or both, or as otherwise provided by law. An organization violating this Order may be subject to a fine of no more than $200,000 per event if the violation does not result in a death or $500,000 per event if the violation results in a death or as otherwise provided by law.

IMPLICATIONS FOR OREGON STATE

In Oregon, HB 4213 prohibited taking any action for nonpayment of charges occurring between April 1 and September 30, 2020. That left the door open for termination/eviction of residents for debts incurred prior to April 2020 and for nonpayment of charges accrued on or after October 1, 2020. The CDC Moratorium limits Oregon Landlords from taking action on any such debts until January 1, 2021 at the earliest.

IMPLICATIONS FOR WASHINGTON STATE

Governor Inslee’s eviction moratorium, embodied in Proclamation 20-19.3, restricts nearly all lease enforcement actions until October 16, 2020. If these restrictions expire and are not replaced, then for purposes of WA state law, Landlords may commence issuing all notices and processing unlawful detainer actions except for those related to 14-day notices, which could not be processed until January 1, 2021 at the earliest.

CONCLUSION

The CDC Moratorium adds another layer of complexity to already challenging regulatory framework for anyone managing residential properties. Landlords are encouraged to adopt policies and safeguards to ensure that no prohibited action is taken if a Landlord receives a declaration or any other statement made under penalty of perjury that implicates an inability to pay rent or the protections of the CDC Moratorium.

This article is not intended as legal advice. Please obtain advice of an attorney for any policy change or decisions regarding residential and commercial Landlord-Tenant matters.