Temporary Residential Eviction Moratorium Order from the CDC and HHS Announced

The Centers for Disease Control and Prevention (CDC) and Department of Health and Human Services (HHS) issued an Agency Order effective September 4, 2020 announcing a temporary moratorium on residential evictions in attempts to limit the spread of COVID-19. The agency order was issued shortly after the White House announced an order barring evictions for renters would likely be issued as negotiations in Congress for renewal of CARES Act provisions have stalled.

The order is effective through December 31, 2020 and goes further than previous moratorium measures outlined in the CARES Act based on the number of citizens who could seek help if circumstances so require. In support of this measure, the CDC and HHS cited that eviction moratorium-like measures enable members of the public to have shelter in which to quarantine, isolate, and practice social distancing resulting in an effective and beneficial public health measure to prevent the rampant spread of COVID-19.

Under the order, a landlord, owner of residential property, or ‘other person’ with legal rights to pursue evictions or a possessory action (“landlord”) is not permitted to evict a ‘covered person’ (“tenant”) from a residential property^[1] until the order expires at the end of the year. Therefore, almost any person or entity who leases a residential property to another must comply with the order. (Note: ‘Covered person’ includes any tenant, lessee, or resident of residential property. ‘Other person’ includes corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals.)

This does not include foreclosure on a home mortgage. However, recent deadline extensions under other federal programs should be reviewed in such cases.

To qualify for the order’s moratorium protections, tenants must provide their landlord with an executed copy of the Declaration Form as provided by the agencies or a declaration that is substantially the same as the provided document. Tenants must provide their landlord with a declaration under penalty of perjury stating that they:

1. Used their best efforts to obtain all available government assistance for rent or housing;
2. Either:
   1. Expect to earn no more than $99,000 in annual income for 2020 (no more than $198,000 if filing a joint tax return),
   2. Were not required to report any income in 2019 to the IRS, or
   3. Received a stimulus check under Section 2201 of the CARES Act;
3. Are 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 layoff, or extraordinary out-of-pocket medical expenses^[2];
4. Are using best efforts to make timely partial payments that are as close to the full payment as their circumstances may permit, considering other nondiscretionary expenses; and
5. Have no other available housing options if evicted and would likely become homeless or be forced to move into and live in close quarters in a new congregate or shared living setting.

Each adult listed on the lease, housing contract, or rental agreement should complete and provide their own declaration. The landlord should maintain copies of any declarations they receive but should not turn in copies to the federal government.

It is important for both renters and landlords to understand:

• The order does not relieve an individual of any obligation to pay rent, make housing payments, or comply with any other obligations, rules, or procedures they are required to meet under their tenancy, lease, or other similar contract.
• The order does not preclude the landlord from charging or collecting fees, penalties, or interest because of the renter’s failure to pay rent or housing payments on a timely basis in accordance with the terms of their contract.
• Tenants may still be evicted for reasons other than not paying rent or making a housing payment. For example, a tenant may be evicted for non-rent related breach of contractual obligations, failure to comply with rules of conduct, engaging in criminal activity on the premises, threatening the health and safety of other residents, damaging or posing a risk of damage to property, or violating local ordinances.

The order does not apply to a state, local, territory, or tribal area with a moratorium on residential evictions already in place, so long as that moratorium provides equal or greater protections as those afforded in the order. At this time, the order specifically does not apply to the American Samoa as they have no reported cases of COVID-19; however, if cases are reported they must also comply.

On the local and regional level, this means:

• Governor Pritzker’s Executive Order will be extended across Illinois through the end of the year. Renters across Illinois will also need to see if they qualify for the rental payments under the program Governor Pritzker initiated if they want to take advantage of the moratorium under the order.
• Chicago’s independent eviction protection ordinances will remain in place for those in their jurisdiction.
• The City of St. Louis’ moratorium will be extended through the end of the year.
• Missouri will now have a state-wide moratorium in the circumstances covered under the order.

Of course, the order will not change the regional or state policies for mortgage foreclosures or commercial proceedings as discussed in our prior article August 2020 Federal and State Extensions of Foreclosures and Eviction Moratoriums.

For further questions, please do not hesitate to reach out to one of our corporate attorneys.

For additional COVID-19 related information, go to our Coronavirus/COVID-19 Resource Center.

Posted by Attorney Hannah E. Mudd. Mudd is a member of Danna McKitrick’s transaction team. As a member of the team she advises clients on a variety of corporate and business transactions including entrepreneurial, real estate, banking, employment, and corporate formation and governance matters.

(c) chrisdorney www.fotosearch.com

^[1] Residential properties include any property leased for residential purposes, include any house, building, mobile home, or land in a mobile home park, or similar dwelling leased for such purposes, but does not include any hotel, motel, or other guest house rented to a temporary guest or seasonal tenant as defined under local laws.

^[2] This is any unreimbursed medical expense likely to exceed 7.5% of one’s adjusted gross income for the year.