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The Patchwork Grows: The CDC Orders a Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19

Posted: 09/03/2020
Industries: Real Estate

As landlords and tenants, lawyers and lawmakers alike struggle to contend with the ever-changing patchwork of state and local moratoria on residential evictions, a new sweeping federal policy is poised to redefine the housing landscape.

Building on a presidential executive order to research methods to reduce or prevent evictions, on September 1, 2020, in an unprecedented move, the Centers for Disease Control and Prevention (“CDC”) issued an Agency Order for the Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19 (the “Order”). The Order was issued pursuant to a provision of the United States Public Health Service Act which authorizes the Director of the CDC “to make and enforce such regulations as in his judgment are necessary to prevent the introduction, transmission, or spread of communicable diseases . . . from one State or possession into any other State or possession.”

From its outset, the Order states its purpose is to curb the historic threat to public health posed by the COVID-19 pandemic. While the Order notes the societal implications of widespread evictions, it bases its purpose not on preventing these socio-economic consequences, but on how a lack of housing stability and a large influx of people without housing would overwhelm the already strained resources for the homeless and create congregate living situations (such as group homes or large family homes) that increase the risk of the virus’s spread. While the Order will not supersede any state order or legislation which is more protective of residential tenants, it provides an entire new framework designed to protect tenants impacted by the current COVID-19 pandemic.

Simply put, the Order provides that “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.” As defined throughout the Order, the jurisdiction and applicability of the Order is to every state which either does not have a moratorium or for which its moratorium will lapse prior to the expiration of this Order. A “covered person” is a tenant who:

  1. has used “best efforts” to obtain all available government assistance for rent or housing;
  2. either:
    1. 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 return); or
    2. was not required to report any income in 2019 to the IRS; or
    3. received an Economic Impact Payment (stimulus check) pursuant   to the CARES Act.
  3. is unable to pay full rent because of “substantial loss of household income, loss of compensable hours of work or wages, a lay-off, or extraordinary out-of-pocket medical expenses”;
  4. is using “best efforts” to make timely partial payments which are as close to the full payment as the covered person’s circumstances permit;
  5. if evicted, the 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;” and
  6. submits a Renter’s or Homeowner’s Declaration to their landlord (a copy of which is attached to the Order) which certifies a renter’s eligibility for the Order’s protections mostly in accordance with the above five eligibility criteria.

Like moratoria that have been issued by certain states, the protection is limited to tenants adversely impacted by the pandemic – or as the Order calls them - “covered persons.” The Order makes clear that there are a number of things it does not cover, including:

  • relieving any tenant obligations to pay rent or comply with another obligation that a covered person has under a lease or a similar contract;
  • preventing landlords from seeking back rent, increasing rents, or charging late fees;
  • applying to (preventing) foreclosure on a home mortgage; or
  • precluding landlords from evicting tenants based on a tenant’s:
    1. engagement in criminal activity;
    2. threatening the health or safety of other residents;
    3. damaging or posing an immediate and significant risk of damage to property;
    4. violating any applicable health, building, or safety regulation; or
    5. violating any other contractual obligation, other than the obligation to timely pay rent (including non-payment or late payment of fees, penalties, or interest).

Unlike many other state or local moratoria, the Order proposes significant criminal penalties for violations. Violations are categorized as either caused by a person or organization and as either resulting in death or not. Landlords who violate the Order in a manner that does not result in a death can face a fine of no more than $100,000, one year in jail, or both. If a landlord’s violation does result in death, that fine can reach upwards of $250,000, and they can still face one year in jail, or both. Likewise, an organization that violates the Order in a manner that does not result in a death can face fines of no more than $200,000 per violation. In the event that the violation results in death, an organization can be fined upwards of $500,000 per event. The Order tasks the U.S. Department of Justice to enforce the criminal penalties as appropriate.

The Order is set to be published, and therefore effective, Friday, September 4, 2020, and is currently set to expire on December 31, 2020.

For now, much remains to be seen as to how the Order will impact the application of landlord-tenant laws currently in place at the state level. By example, the penalty provisions raise questions as to what constitutes a “person” (defined early in the Order as including corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals) versus an organization (which is undefined). Additionally, some legal scholars have noted the Order raises major questions concerning federalism, separation of powers, the breadth of Congress’s interstate commerce powers, equal protection and due process, as well as whether this constitutes a regulatory taking. Moreover, the emergency nature of this Order begs several questions related to the appropriateness of the CDC issuing an anti-eviction order when covered persons are not required to quarantine, generally.

Legal challenges to the Order are sure to come, especially focusing on the recurring debate concerning administrative procedure law and rulemaking requirements. In the interim and especially due to the hefty criminal punishments threatened by the CDC, it may be best to comply with the anti-eviction protections and wait to see how the courts (inevitably) treat the Order.