A new Agency Order from the U.S. Department of Health and Human Services, Center for Disease Control and Prevention (“CDC”) is expected to be published in the Federal Register on September 4, 2020, which will temporarily halt residential evictions of qualifying tenants for failure to pay all rent when due and will impose substantial penalties upon landlords for violations. The stated purpose of the Order is to mitigate the spread of COVID-19 through unsheltered homelessness or shared living conditions that may result from the eviction of covered persons.
The Order states, in substantive part:
Under this Order, a landlord, owner of a residential property, or other person with a legal right to pursue eviction or possessory action, shall not evict any covered person from any residential property in any jurisdiction to which this Order applies during the effective period of the Order. This Order does not apply in any State, local, territorial, or tribal area with a moratorium on residential evictions that provides the same or greater level of public-health protection than the requirements listed in this Order.
A “person” restrained by the Order is defined to include corporations, associations, partnerships, joint stock companies, as well as individuals. The Order includes a typical federal exclusion whereby state or local law that is more restrictive or protective than this Order may preempt this Order. More on that issue below.
The key question raised by this prohibition on evictions of covered persons is how “covered person” is defined. The Order states as follows:
“Covered person” means any tenant, lessee, or resident of a residential property who provides to their landlord, the owner of the residential property, or other person with a legal right to pursue eviction or a possessory action, a declaration under penalty of perjury indicating that:
- The individual has used best efforts to obtain all available government assistance for rent or housing;
- The individual 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),
- was not required to report any income in 2019 to the U.S. Internal Revenue Service, or
- received an Economic Impact Payment (stimulus check) pursuant to Section 2201 of the CARES Act;
- 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;
- 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 non-discretionary expenses; and
- 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.
These criteria appear largely subjective and to date the CDC has not issued any guidance to assist with the interpretation of these criteria. The Order states that it is an emergency action pursuant to 42 CFR 70.2 and not a rulemaking subject to review under the Administrative Procedures Act, so agency guidance interpreting these criteria may not be forthcoming, so that job may ultimately fall to the courts.
Tenants seeking to shelter from potential eviction proceedings are required to deliver to their landlord a declaration under penalty of perjury that the tenant meets each of the five criteria. A form Declaration, consisting of a recitation of the five elements defining a “covered person” followed by an acknowledgement of the penalties for perjury and a tenant’s remaining obligations toward landlords, can be found at the end of the Order (see link below). Tenants who are covered persons are still require to:
- Pay rent when due in whatever amount the tenant can;
- Comply with all other terms and conditions of their lease, including compliance with all laws and public health orders;
- Pay interest, late fees, penalties, costs or collection, and other charges that may be collectable under the lease;
- Pay all unpaid rent, interest, late fees, penalties, costs or collection, and other charges upon expiration of the Order.
Each adult listed on the lease, rental agreement, or housing contract must complete and provide a Declaration to qualify for protection under the Order.
Civil and criminal penalties for violations of the Order are as follow:
For individual landlords:
- A fine of no more than $100,000 if the violation does not result in a death, or one year in jail, or both;
- 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.
For entity landlords:
- A fine of no more than $200,000 per event if the violation does not result in a death or $500,000 per event if the violation results in a death, or as otherwise provided by law.
Landlord should note that the Order does not prohibit eviction where the cause of action arises from a breach of material lease terms other than the failure to pay all rent when due.
The U.S. Department of Justice is authorized to enforce the Order and bring actions to impose these penalties. Given the unusual nature and origin of the Order, it would be reasonable to expect a court challenge the Order’s constitutionality if and when enforced.
COLORADO EVICTION LIMITATIONS
Pursuant to Executive Order D 2020 162 (Aug. 10, 2020) and the executive orders referenced therein, no residential eviction proceeding can be filed in Colorado unless 30-days written notice of default has first been provided to the tenant with opportunity to cure. As this is less protective than the Order, the Order would preempt D 2020 162 for a covered person who served a Declaration on his or her landlord. However, D 2020 101, which currently prohibits “charging any late fees or penalties for any breach of the terms of a lease or rental agreement due to nonpayment,” is more protective of tenants than the Order, and may preempt the Order’s allowance of late fees and penalties. Colorado Executive Orders addressing pandemic protections have typically been extended on a month-to-month basis, so it will be important to compare state law to the Order at the time an eviction action is contemplated to know which law controls.
The full text of the Order can be found here: https://s3.amazonaws.com/public-inspection.federalregister.gov/2020-19654.pdf.
The Order becomes effective upon publication and remains in effect, unless extended, modified, or rescinded, through December 31, 2020.
Author: Patrick M. Haines, Aisha I. May
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