Logistical Issues for Upcoming Nonpayment Evictions

We’re a few days into the aftermath of the recent order from the Kentucky Supreme Court allowing nonpayment evictions to move forward as of August 1. That news has a lot of rental owners and managers scrambling to get notices out to tenants to pay or vacate. So, I wanted to address some logistical issues and questions that I’m getting.

1. The new order requires all properties covered by the CARES Act to give 30-day notices to pay or vacate. There is an argument under the CARES Act that this 30-day notice requirement ONLY applies to rent that was due from March 27-July 25. So, the argument goes, if the tenant is paid up through July, then fails to pay rent in August, a shorter notice to pay or vacate is allowed.

My thought: I think this argument may be technically correct under the CARES Act. However, I do not believe it would prevail in Kentucky because the language in the Supreme Court order is blanket. In both sections where it talks about CARES Act properties, it states that “Thirty days’ notice to vacate is required prior to filing an action for eviction.” No exceptions or limitations are stated. As a result, I do not believe courts in Kentucky will grant eviction judgments for CARES Act properties who have not given a 30-day notice, at least for cases filed during the month of August.

2. CARES Act properties – remember that the CARES Act does not allow you to charge late fees or any other fees based on the tenant’s failure to pay rent from March 27-July 25. So make sure that your 30-day notice does not include any language about late fees or other such charges.

I have a CARES Act 30-day notice form if you’d like one. It’s a $100.00 document. Just shoot me an e-mail if you’d like one.

3. The new Verification of Compliance (AOC-1027) form is now available. Click here to access it or go to the Resources page on this site. If you use an attorney, they will complete it for you.

4. At a minimum, it will require that you (or your attorney) verify that the eviction you’re filing is not prohibited by the CARES Act. As a result, your attorney will need you to provide proof that your property is not covered. My suggestion is that you have your owner go to the searchable loan databases for Fannie Mae and Freddie Mac, complete a search, and send you printouts of the results showing that the loan is now owned by Fannie Mae or Freddie Mac. You can find the Fannie Mae database here and the Freddie Mac database here.

Do NOT assume your loan is not federally insured. By way of example, the loan on my home was done through a private local bank. I was surprised to find out yesterday that it is now owned by Freddie Mac. Loans get bought, sold, and assigned all the time. Do the search. Print out the results. The last thing you want is to show up in court and be unable to prove that the CARES Act doesn’t cover your property.

One last thing: the search requires the last four digits of the owner's Social Security Number. So, the owner will need to do the search. 

5. Cases filed prior to the court shutdowns will still likely be required to file some kind of document to get the case back on the court’s docket for a hearing. It may be the Verification of Compliance form, it may be something different. Your attorney can direct you on that as soon as the local court clerks create a system for it.

6. While the Supreme Court’s order was certainly good news for rental owners and managers, we are still in a situation where the courts and the Governor are in conflict on the issue of nonpayment evictions. Hopefully that conflict gets resolved on Thursday during the mediation in the lawsuit in Northern Kentucky. I’ll let you know what comes of that as soon as I hear something.

7. Nothing has passed yet, but keep your eye on Congress as they consider the next rounds of COVID-19 relief legislation. Some of it is likely to extend the eviction moratorium for CARES Act properties. We’ll deal with that as it comes. But be aware that is probably coming.

8. I did a ZOOM interview this morning with WLKY news in Louisville to give the landlord’s perspective on the eviction situation. Here's a link to the clip. My overall points were:

• There will be no onslaught of evictions due to COVID-19.
• We will likely see significant numbers of evictions because the courts have been closed to evictions for four-and-a-half months. 
• Landlords simply want the ability to evict the bad actors who have attempted to game the system, which is a small percentage of tenants. 

9. I mentioned in my last video that I’m leaving on Friday for vacation. If you need to file an eviction while I’m gone, my wonderful assistant, Heather, will take care of you.

We’ll talk soon. Have a great week.