Member Article

The Centers for Disease Control and Prevention has issued an order titled “Temporary Halt in Residential Evictions To Prevent the Further Spread of COVID-19” (“Order”) forbidding evictions of residential tenants who do not exceed certain income levels (generally $99,000 for an individual), are unable to make full rental payments due to substantial loss of income, loss of job, or extraordinary medical expense, and have exhausted all available governmental sources of rental or housing assistance. It applies through December 31, 2020, anywhere in the United States that does not already have a moratorium at least as broad ranging as this new Order.

It applies through December 31, 2020, anywhere in the United States that does not already have a moratorium at least as broad ranging as this new Order. It applies to any property leased for residential purposes, including any house, building, mobile home or land in a mobile home park, or similar dwelling leased for residential purposes, but shall not include any hotel, motel, or other guest house rented to a temporary guest or seasonal tenant. As discussed below, serious monetary and criminal penalties can apply if the Order is violated.

The Order states that a “landlord, owner of a residential property, or other person with a legal right to pursue eviction or possessory action shall not evict any covered person from any residential property in any State or U.S. territory in which there are documented cases of COVID-19 that provides a level of public-health protections below the requirements listed in this Order.”

The Order provides that the moratorium does not relieve any individual of any obligation 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. Landlords may continue to charge or collect fees, penalties, or interest as a result of the failure to pay rent or other housing payment on a timely basis, under the terms of any applicable contract.

The Tenant’s Declaration

To have the moratorium apply, the tenant must submit to the landlord a declaration stating that the tenant:

• has used best efforts to obtain all available government assistance for rent or housing;
• eithers expect 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;
• is unable to pay full rent or make a full housing payment due to substantial loss of household income, loss of compensable hours of work or wages, lay-offs, or extraordinary?out-of-pocket medical expenses;
• 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;
• if evicted, would likely become homeless, need to move into a homeless shelter, or need to move into a new residence shared by other people who live in close quarters due to lack of other available housing options.
• understands that he or she must still pay rent or make a housing payment, and comply with other obligations under the tenancy, lease agreement, or similar contract, and that fees, penalties, or interest for not paying rent or making a housing payment on time as required by the tenancy, lease agreement, or similar contract may still be charged or collected.
• understands that at the end of this temporary halt on evictions on December 31, 2020, the housing provider may require payment in full for all payments not made prior to and during the temporary halt and failure to pay may lead to eviction pursuant to State and local laws.
  
  

Penalties

Penalties can include:

• A $100,000 fine and/or one year in jail for an individual, or $200,00 for an organization, if the violation does not result in a death;
• A fine of no more than $250,000 fine and/or one year in jail for an individual, or $500,000 for an organization, if the violation results in a death;
• Penalties otherwise provided by law.
  
  

The Order may be found HERE.

Buchalter is a leading nationally recognized financial services law firm, having served large, medium and small financial institutions for over 90 years. Our Financial Services Regulatory Industry Group and Mortgage Banking Industry Group provide counseling and analysis across the wide range of regulatory issues facing such institutions.

Michael Flynn

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