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What Trump’s Eviction Order Means, and Doesn’t Mean

On Behalf of | Sep 2, 2020 | Real Estate

Urged by the Trump Administration, the Centers for Disease Control published an emergency order today that halts evictions under certain circumstances for the remainder of 2020.

What does this mean for landlords and tenants?

First, this is a much more expansive order than the previous federal moratorium on evictions, which only applied to HUD-sponsored housing. This order applies all the way down to mom-and-pop investors of a single-family rental property.

Second, it is being imposed under the federal quarantine law. The logical connection is that evictions lead to homelessness, and homelessness leads to COVID-19 spread. If the factual support is there, then challengers to the law will have their work cut out, because this law is already sweeping enough to allow the government to apprehend people in the name of stopping the spread of disease. Furthermore, there are six-figure fines for noncomplying landlords, so only a deep-pocketed syndicate might risk an eviction without previously having obtained a ruling that the CDC order is void.

Third, at face value, this looks like a significant benefit to tenants (and detriment to landlords). On closer look, it is not a game-changer. Why?

  • Tenants’ rent obligation is merely deferred until January 2021, not forgiven. Until January, a landlord may charge late fees and interest on rent that is not paid on time, even though they may not evict. Tenants must make partial payments until then, to the extent that they are able. There is no deferral of non-rental charges, like pet fees, utilities, or parking–and landlords may continue to evict for any non-rent reason.
  • Tenants can only avoid eviction if they submit a sworn statement that demonstrates need in several ways. Among them, the tenant (1) must have experienced a drastic change in finances, (2) must have applied for housing assistance, and (3) must have no other options for housing, such as living with a family member. Up to five years in prison awaits a tenant that makes a false declaration.

Cavitch is advising its residential real estate clients on the impact of this order and how to respond to tenants’ questions. For more information, contact me at [email protected].

Read the Order by clicking here: Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19.

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