The CDC Eviction Moratorium, Notices, Late Fees, and Rental Assistance

The flurry of activity last week created tremendous uncertainty out there surrounding evictions. I’m glad to say that some of that has been cleared up, at least momentarily. Here’s where we stand:

On Friday, September 4, the CDC regulation took effect. It prohibits evictions based on nonpayment of rent or fees through December 31, 2020, for any tenant who declares under penalty of perjury that:

• They have used best efforts to obtain all available government assistance for rent or housing;

• They (i) expect to earn no more than $99,000 in income for 2020, (ii) were not required to report any income in 2019 to IRS, or (iii) received a stimulus payment;

• They are unable to pay the full rent due to substantial loss of household income, loss of hours of work or wages, a lay-off, or extraordinary out-of-pocket medical expenses;

• They are using best efforts to make timely partial payments that are as close to the full payment as the individual’s circumstances may permit, and

• The eviction would likely render them homeless or forced to live in a shared living setting (with family, friend, in a shelter, etc.) — because they have no other available housing options.

The CDC has created a Declaration Form that tenants may use to make this declaration. I sent a form to many of you last week. You can use that form or you can use the official CDC Form, found here.

Late Friday evening, the Governor issued a new Executive Order adopting the CDC regulation for the state of Kentucky. His new order rescinded Sections 1-4 of his August 24 Executive Order. This means that landlords are no longer ordered by the Governor to give 30-day notices or attempt to meet and confer with tenants. In addition, landlords are no longer prohibited by the Governor from charging late fees, penalties, and interest on unpaid rent. You can read the Governor’s new order here.

So, where do we go from here? Let’s take a look:

1. What about evictions filed prior to September 4 for non-payment of rent? Based on my experience this week, judges are granting judgments against tenants who fail to appear in court. However, if the tenant appears in court, they are being given two weeks to review the CDC Declaration form. If they sign it, the case will not move forward. If they don’t sign it, the case will be heard two weeks later.

2. Should I continue to give notices to pay or vacate? Non-CARES Act properties may go back to giving their usual non-payment notices, which will be seven-day notices for many of you. However, because of the current Supreme Court order (from August 28), CARES Act properties are still required to give 30-day notices. I have no idea why this was included in their order, but it was. You can read that order here.

3. Do I have a duty to provide tenants with the CDC Declaration Form? No. But I think you should anyway. Tenants who show up in court are being given additional time to review and sign the form. If they do sign the form, the case will not move forward. Providing the form up front may allow you to avoid filing what would be a fruitless eviction. But, that’s your call. The Supreme Court, the Governor, and the CDC have emphasized that the tenant still has a duty to pay rent, so you may emphasize that in your notices.

4. What if my tenant refuses to complete the Declaration? Then the tenant is not a “covered person” under the CDC order and you may proceed with eviction. However, the order does not provide a time frame for providing you with the Declaration. So, it’s possible for the tenant to will show up in court with a signed Declaration, causing your case to be dismissed.

5. What if my tenant puts inaccurate information on the Declaration? May I evict them? The new order is not clear on that point. Under the language of the order, providing false information on the Declaration form is a federal crime, perjury. As a result, the remedy is a criminal penalty for the tenant. If the tenant is convicted of perjury or some related offense, you’d certainly be able to evict. Unfortunately, I’m skeptical that many prosecutors will take action on such cases. I hope that I’m wrong.

However, there’s an argument that a tenant who puts inaccurate information is not a “covered person” because they didn’t provide a true and accurate Declaration, which seems to be implied in the definition of “covered person”. In that case, if you can prove they provided false information, you could proceed with an eviction. But proving that issue will be very difficult, as many of the aspect are subjective (“using best efforts”, etc.).

6. Remember, you may still evict tenants for:

• engaging in criminal activity while on the premises;
• threatening the health or safety of other residents;
• damaging or posing an immediate and significant risk of damage to property;
• violating any applicable building code, health ordinance, or similar regulation relating to health and safety; or
• violating any other lease obligation, other than the timely payment of rent or similar housing-related payment (including non-payment or late payment of fees, penalties, or interest).

7. The odds are good that the National Apartment Association files a lawsuit this week challenging the CDC regulation. If that happens, I’ll keep you updated.

8. Don’t forget that, starting September 21, eviction cases in which a tenant appears in court will automatically be continued for at least two weeks in order for both parties to seek rental assistance. The matter will then be heard at a second court date at least two weeks later if not already resolved.

9. Today, the state unveiled a website that allows landlords and tenants to apply for state funds for eviction relief. You can fill out an application by clicking here. As a landlord, in order to apply for assistance you must agree to:

• forgive up to 10% of rent due and forgive late fees, penalties, and interest related to non-payment of rent, and
• give 45 days' notice for any future eviction, not to be initiated until at least 30 days after assistance concludes.

So, feel free to apply for rental assistance and to encourage your tenants to do so as well. Just realize that there are strings attached.

I know a lot of you ask me questions on social media. I’ve tried to answer those questions in the past, especially for my clients. I’m getting overrun with questions from a lot of different angles, so I’m trying to get things under control so that I can address questions from my clients. So, if you have a question, please send an e-mail to smarshall@tripleslaw.com. 

When I don’t answer your question on social media, please don’t be offended. It’s just too hard to type on my phone, to keep up with the different comments, etc. So, shoot me an e-mail and I’ll get to your question – for a small fee, of course.