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

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.