In a completely unprecedented move, the Centers for Disease Control and Prevention (CDC) issued a temporary order (“Order”) halting evictions nationwide through December 31, 2020.
This move was not necessarily unexpected.
On August 8, 2020, President Trump issued an Executive Order ordering the CDC and other federal agencies to look into a potential eviction moratorium in order to slow down a homeless crisis, which could then lead to a further deepening of the COVID-19 health crisis.
Summary of the CDC’s Eviction Moratorium – What You Need to Know
A detailed outline prepared by AAPL & its General Counsel, Geraci LLP, can be found here.
Timing
The moratorium went into effect on September 4, 2020 and extends through December 31, 2020.
Coverage
The moratorium effects all residential tenants.
Tenants’ Rights
If a tenant provides a declaration with specific representations to a landlord during this time period, the landlord cannot evict the tenant.
Landlords’ Recourse
A landlord cannot evict the tenant during this time period, but they may charge fees or other penalties permitted under the lease. They can also require the tenant to pay all past due amounts immediately, and in a lump sum, when the order expires on January 1, 2021.
Other Evictions
A landlord may still evict tenants for other nonpayment grounds such as criminal activity or other violations of the lease agreement between landlord and tenant.
Lenders’ Take
The Order does not directly affect mortgage lenders. Landlords are still obligated to make mortgage payments to their lenders, even if the tenant is unable to pay the landlord. However, landlords will be under significant financial pressure and may be seeking additional forbearance from mortgage lenders because of this Order.
What are the Penalties?
Massive fines of up to $500,000 per violation may be enforced by the United State Department of Justice.
Interaction with Other State Eviction Moratoriums
Any state with a greater restriction than the Order shall supersede the Order.
Whether the CDC or the President have the authority to issue this sweeping of an Order is an issue that is guaranteed to be litigated and will ultimately be decided well after the expiration of this Order. American Association of Private Lenders and its Counsel, Geraci LLP, believe the Order is likely unconstitutional and a violation of due process for landlords.
Click here to see a more detailed outline provided by AAPL and its General Counsel, Geraci LLP.
