Yesterday, the Center for Disease Control (CDC) extended the eviction moratorium which originally expired on July 31, 2021. The new eviction moratorium, in place until October 3, 2021, only covers “counties experiencing substantial and high levels of community transmission levels” of the coronavirus. As such, it is narrower than the original eviction moratorium which applied nationwide, regardless of local transmission levels. However, this poses the question of what areas are covered by the eviction moratorium – a moving target as COVID-19 continues to spread around the country. It is currently understood to apply to about 80% of U.S. counties and 90% of renters.
The CDC’s rationale for the extension allows states and the federal government more time to push through the rental assistance programs that have previously suffered bureaucratic delays. Some localities, including DeKalb County, Georgia, have issued local orders banning evictions in an effort to keep as many residents as possible in their homes. This also gives the county more time to distribute the emergency funds earmarked for these rental relief efforts.
The legitimacy of the CDC’s new eviction ban will likely face an uphill legal battle based upon dicta contained in the Supreme Court’s June 29, 2021, opinion, which states that the process will inevitably take time. Many landlords are left wondering what options they have where tenants are months, if not a year or more, behind in monthly rental payments. Although some of the rental relief programs may not pay the entire amount of back rent owed, landlords may still want to consider this as a viable alternative to eviction because any award of back rent in an eviction action may not be collectable due to the financial circumstances of the tenants. Even if the CDC moratorium is ultimately stricken and state and local eviction bans stand, it may behoove landlords to ensure their tenants fully understand how to access these emergency funds and to assist tenants in obtaining them wherever possible. Additionally, landlords should work with their lenders to determine whether there are viable refinance or forbearance opportunities in light of the current climate.
The authors, Bonnie Hochman Rothell, Esq. and Jessica A. Rodriguez, Esq., represent lenders, landlords, and real estate investors in risk management and litigation matters. Please reach out to the authors or your MMM attorney if you are interested in more information regarding the rental relief options available in your local area, strategies for ensuring tenants are able to access these funds in a timely manner, and the impact of the eviction moratorium on lender/borrower relations.