Wednesday, September 02, 2020

CDC's Residential Eviction Moratorium - Fines up to $500,000 and Jail - You Better Read This

CDC's eviction moratorium has teeth and the details matter. 

CDC issued an Agency Order, under the Public Health Service Act, to temporarily halt residential evictions to prevent the further spread of COVID-19 through December 31, 2020. 

The Order applies to residential tenants (not transient or "seasonal tenant[s]") who have provided an executed and sworn copy of the Declaration form, set forth in Attachment A of the Agency Order, to their landlord. 

Such Declaration swears that:
  1. The individual has used best efforts to obtain all available government assistance for rent or housing;
  2. The individual either (i) 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), (ii) was not required to report any income in 2019 to the U.S. Internal Revenue Service, or (iii) 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.
Landlords and tenants alike better get this right as DOJ can bring actions against violators and "a person violating this Order 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." If the violator is an organization, the fines are $200,000 and $500,000, respectively. 

This does NOT mean that landlords DON'T have rights.

It is expressly noted that "[t]his Order 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." Nor does the order preclude "the charging or collecting of fees, penalties, or interest as a result of the failure to pay rent or other housing payment on a timely basis..." As we just wrote in Dan's Papers - Sue the Tenant for a Judgment

Finally, it is noted that the Order does not prevent evictions "for reasons other than not paying rent or making a housing payment" nor does it preclude "foreclosure on a home mortgage."

As an aside, the CDC is justifying this Order by pointing to the "over 174,000 deaths due to the disease" and comparing it "to the peak mortality observed during the 1918 H1N1 influenza pandemic," while asserting that "eviction moratoria-like quarantine, isolation, and social distancing-can be an effective public health measure utilized to prevent the spread of communicable disease." Perhaps we should stop downplaying this pandemic - it is real per Trump's Federal Agency.