You may have heard about the new nation-wide eviction moratorium for renters, but what does that mean for you as a tenant or as a rental property owner?
The Centers for Disease Control and Prevention (CDC) and the Department of Health and Human Services have used their authority to impose an eviction moratorium through the end of 2020: “Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19”. The moratorium is designed to keep renters from being evicted from their homes on the theory that evicted tenants may become homeless and thereby increase the spread of COVID-19. And unlike the CARES Act moratorium – which only applied to renters in units that were financed by mortgages backed by the federal government – the new CDC moratorium can apply to any rental property, regardless of how it is financed.
It’s important to note, though, that the moratorium will not prevent ALL evictions.
So, which tenants are protected?
The Moratorium Only Protects Tenants From Eviction on the Basis of Non-Payment of Rent
The first key aspect of the order is that it only protects tenants from eviction for non-payment of rent. Tenants may still be evicted for other valid reasons, such as criminal conduct on the premises, threats to the health and safety of other tenants, or violating terms of the lease agreement that are not related to payment of rent. One common lease violation that may be even more common in today’s economy is unapproved residents. A lease agreement typically limits who may reside on the premises in addition to the tenant himself. Allowing a friend or family member to stay in the rental unit for an extended period of time without permission of the landlord could give the landlord a legitimate reason to evict despite the moratorium.
The Moratorium Has Maximum Income Limits
There is also an income limit for tenants who want to take advantage of the moratorium. Single people making over $99,000 per year and couples making over $198,000 per year and file joint tax returns are not protected.
The Tenant Must Certify that S/he Meets a 5-Pronged Test
To invoke the protection of the CDC’s order, a tenant must provide an executed copy of a Declaration form on which the tenant declares under penalty of perjury that:
- the tenant has used best efforts to obtain government assistance for rent;
- the individual meets the income requirements described above;
- the tenant cannot pay his rent in full due to loss of income, layoffs, or extraordinary medical expenses;
- the tenant is making best efforts to make timely partial payments or rent; and
- eviction would render the tenant homeless or force the tenant to move into and live in close quarters in a shared living setting because the tenant has no other housing options.
What Does This All Mean for Landlords?
Landlords may still issue lease termination notices and even sue tenants for eviction. However, as soon as a tenant provides an executed Declaration to his landlord the eviction efforts must stop. Proactive tenants may even provide Declarations to their landlords before they receive a “pay or quit” notice.
The good news for landlords (and the bad news for tenants) is that the CDC Order does not relieve tenants from their obligations to pay rent or otherwise comply with the terms of their lease agreements. So, after the moratorium expires, tenants will still owe all accrued rent. And because landlords may continue to charge late fees, penalties, etc., as they normally would under their contracts with tenants, the amount due at the end of the moratorium can build up quickly.