CDC Issues Eviction Protection (Limited Applicability .. Useful for Furloughed Employees … Possible Legal Problems)

September 2, 2020 by Leave a comment

In a previous post, we warned ASA members that the “eviction moratorium” Executive Order would not apply to rent on commercial space.

Members should expect to see another round of media articles about “eviction moratoria” because the Center for Disease Control (CDC) is issuing a regulation forbidding eviction. This regulation is expected to be published Friday. It will likely NOT affect ASA member companies.

A class of persons from the ASA community who might be affected by this eviction moratorium are employees who’ve been furloughed due to Covid-19.

The CDC is expected to issue a regulation forbidding evictions when the tenant issues a written statement to the landlord making certain assertions.  A class of persons from the ASA community who might be affected by this eviction moratorium are employees who’ve been furloughed due to Covid-19.

Once again, this moratorium does not apply to  commercial space (it only applies to residential evictions).  It will only apply when the tenant provides a written statement to the landlord , under penalty of perjury, these five facts:

  • The tenant has used best efforts to obtain all available government assistance for rent or housing;
  • The tenant 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), or
    • In 2019 was not required to report income to the IRS, or
    • Received a CARES Act stimulus check;
  • The tenant is unable to pay due to substantial loss of household income
  • The tenant is using best efforts to make timely partial payments; and
  • Eviction would likely render the individual homeless because the individual has no other available housing options.

It is possible that the CDC rule could face legal challenges. The statutory authority that is cited in the regulation (section 361 of the Public Health Service Act) permits CDC to issue regulations to prevent foreign visitors from transmitting a disease, and it permits CDC to issue regulations to prevent interstate transmission of a disease.  Nothing in the statute permits CDC to issue regulations to prevent intrastate transmission of a disease.  Because this regulation will mostly have an intrastate effect, it may be outside of CDC’s power to issue it.  E.g. United States v. Lopez, 514 U.S. 549, 552-560 (1995) (explaining the Commerce Clause limits that limit Congress’ ability to regulate intrastate commerce, which must be read as a limit on the statutory authority extended by Congress to the CDC).

This article is based on advance information obtained before publication of the rule.  If you plan to make a statement to your landlord under the rule then READ THE REGULATION to be sure you follow it correctly.

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Yes, I Read the Headlines … But Pay Your Rent, Anyway

August 10, 2020 by 1 Comment

The President has signed an Executive Order entitled “Fighting the Spread of COVID-19 by Providing Assistance to Renters and Homeowners.”  It was signed on Saturday (August 8).

The Administration is claiming that the President’s Executive order will put a stop to evictions.  It is being described as an eviction moratorium.  It is not an eviction moratorium.  ASA members should not use it as a basis for failure to pay rent – neither home rent nor business rent.

There are two key points for ASA members wondering about their rights under the Executive Order.  First, the Executive Order is focused only on residential rentals.  It does nothing for business rentals.  Second, the Executive Order does not actually prevent evictions – instead it directs study to see what might be done.

An eviction moratorium recently ended.  Some evictions from “covered dwellings” were temporarily prevented under the CARES Act section 4024, which prevented eviction filings (for non-payment of rent) for 120 days and also restricted charging tenants for fees or penalties related to nonpayment of rent.  That renter protection expired on or about July 25, 2020.

Unlike Congressional law which affected certain properties, this Order has no legislative effect.

The Executive Order does four things:

  • It directs HHS and CDC to consider whether the US needs to do anything to limit evictions in order to prevent the spread of COVID-19 from one State into another.
  • It directs Treasury and HUD to identify whether there are funds that could be used as rental financial assistance (interestingly, there is emergency authority under 42 U.S. Code § 5174 for the President to pay for rent but the President may need Congress to authorize funds).
  • It directs HUD to “take action” to promote the ability of renters and homeowners to avoid eviction.  But the actual action is left to the discretion of HUD.
  • It directs FHFA to “review all existing authorities and resources that may be used to prevent evictions and foreclosures for renters and homeowners resulting from hardships caused by COVID-19.”

In other words – the Executive Order directs various departments and agencies to look for solutions.  But it doesn’t actually provide any immediate solutions.

 

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