After making a proposal earlier this week, on September 4, the Centers for Disease Control (CDC) formally published its order to temporarily halt residential evictions nationwide for nonpayment of rent of qualifying tenants in response to concerns about the spread of COVID-19. Unlike the CARES Act, which imposed an eviction moratorium only on properties receiving federal or federal-related assistance or financing, the CDC order applies to all residential landlords. Landlords, property managers, and professionals have said this has created significant uncertainty in the housing industry.  

The order is effective immediately through December 31, 2020. It was published after President Trump directed the CDC to address residential evictions amid the pandemic.

We previously detailed the requirements and applicability of the CDC order. The final order is substantially the same as the CDC’s earlier proposal.

Generally, residential landlords are prevented from evicting tenants for nonpayment of rent or other housing payments who have submitted a declaration form declaring under penalty of perjury that they have faced certain hardships due to the pandemic that have resulted in their inability to pay full rent. Specifically, a tenant must declare that he or she:

(1) Meets certain income requirements

(2) Cannot pay rent due to loss of work or wages or extraordinary medical expenses

(3) Has made best efforts to obtain all available government assistance for rent or housing

(4) Has made best efforts to make partial rental payments

(5) Will likely experience homelessness or be forced to move into close quarters with others if evicted

See this blog post for further details.

Notably, the order prohibits only those evictions based on nonpayment of rent or other housing payment. The order expressly provides that landlords may evict tenants for engaging in criminal activity, damaging the property, violating lease and other contractual obligations unrelated to the payment of rent, violating building codes or health ordinances, or threatening the health or safety of other residents.

Tenants are still obligated to pay rent and landlords are still permitted to charge any and all applicable late fees, penalties, and interest associated with missed rental payments during the eviction moratorium period.

The order imposes severe criminal and monetary penalties on landlords, allowing fines from $100,000-$500,000. The order is silent regarding what, if any, recourse landlords may have if a tenant abuses the process by providing untruthful information when declaring a hardship.

Implementation uncertainty persists

Numerous questions remain unanswered regarding how the order will take effect.

• Can landlords file money judgment actions during the moratorium? The order is silent in this regard, so most experts believe landlords can still do so.
• Can landlords report missed payments to credit reporting agencies? Again, the order is silent in this regard.
• Can a landlord challenge the validity of a tenant’s hardship declaration if the landlord has reason to believe the tenant did not complete the form truthfully? If so, how?
• How will Iowa courts administratively implement the CDC’s order? 

Iowans may see some guidance from courts or the judicial branch in the upcoming weeks. 

Discussions of a legal challenge to the order

While the CDC has broad authority to take certain actions to prevent the spread of communicable diseases within the nation, this type of eviction ban order is unprecedented; many people are questioning whether the CDC has overstepped its authority. A judicial challenge appears likely in the coming weeks. It will then be up to the court to determine whether the order is a legal and enforceable use of the CDC’s authority.

As reported by The Washington Post, “the National Association of Home Builders (NAHB), which represents developers, contractors and others in the industry, became one of the first to tease potential legal action. It said Wednesday its members already had asked the trade group’s leadership to consider filing a lawsuit, prompting the organization to convene its lawyers to study whether and how they can bring such a case.” Similar discussions are also occurring within landlord associations.

Landlords with pending eviction actions should contact their attorney for clarification soon. All other landlords should look for guidance on how to proceed with future actions.