New Federal CARES Act Eviction Moratorium

On March 27, 2020, Congress passed, and the President signed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) into law. The law includes immediate protections for tenants including a federal eviction moratorium for tenants living in certain types of housing.

What does the federal eviction moratorium do?

The eviction moratorium restricts certain residential landlords from filing new eviction actions for non-payment of rent, and also prohibits “charg[ing] fees, penalties, or other charges to the tenant related to such nonpayment of rent.” The 120-day federal moratorium also provides that a landlord (of the particular covered property) may not evict a tenant after the moratorium expires except after 30 days’ notice to the tenant—which may not be given until after the day moratorium period.

What types of cases ARE covered by the moratorium?

Sec. 4024(a) of the Act defines the properties included in the moratorium. Section 8 housing, public housing, low income housing tax credit, and rural housing voucher programs are included.

In addition, all properties with federally-backed mortgage loans and federally-backed multifamily mortgage loans are included.  Federally-backed mortgage loans are defined to include loans secured by any lien on residential properties that are “made in whole or in part, or insured, guaranteed, supplemented, or assisted in any way, by any officer or agency of the Federal Government or under or in connection with a housing or urban development program administered by [HUD] or a housing or related program administered by any other such officer or agency, or is purchased or securitized by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association.”  This definition is extremely broad and includes HUD, VA, USDA, Fannie Mae and Freddie Mac owned, insured or serviced loans.

There is an extremely high chance your mortgage is federally-backed, even if you are not aware of it.

What types of cases ARE NOT covered by the moratorium?

The federal eviction moratorium does not affect cases:

  1. That were filed before the moratorium took effect or that are filed after it expires on July 25, 2020;
  2. That involve non-covered tenancies (see below); or
  3. Where the eviction is based on a reason besides non-payment of rent or other fees/charges;

How long does the moratorium last?

The federal eviction moratorium took effect on March 27, 2020 and extends for 120 days (until July 25, 2020). In addition, landlords that receive forbearances of their payments due for federally-backed multifamily mortgage loans must in turn respect identical renter protections for the duration of the forbearance (meaning, if you are not paying your federally-backed mortgage, you may not charge your tenant’s rent either).  One the moratorium ends, landlords must give at least 30 days’ notice for serving a non-payment of rent notice instead of the standard 3-day notice.

 What does this mean for landlords?

If you do not participate in one of the Federal programs under the Act (Section 8 being the most common), and you own a property free and clear of a mortgage, you are likely excluded from this legislation and may demand rent and file evictions against your tenants  for non-payment in the normal course.

However, if you have a mortgage on your property you likely fall under the tenant protections as laid out by this Act.  The Federal government is estimated to invest in, or insure, over 90% of mortgages in the United States. Therefore, the likelihood is that your mortgage would fall into this category even though you may not be aware of it.

THE RISKS ARE SIGNIFICANT FOR IMPROPERLY FILING AN EVICTION IN VIOLATION OF THIS LEGISLATION. If you file an eviction and it is contested, you may not only lose the eviction, but could also be responsible for the tenant’s attorney fees, court costs and other penalties laid out under this Act.

If I’m covered by the Act can I file an eviction for some other reason other than non-payment? 

Yes, terminating a month to month tenancy, evicting a holdover tenant, or evicting for non-monetary lease violations are all permissible as long as they are not used as a proxy for the tenant not paying rent.   In addition, all types of commercial evictions, unlawful detainers, and other types of dispossessory actions that are not covered under the Act are also permissible.