Court Strikes Down CDC Eviction Moratorium - Borowitz & Clark

Court Strikes Down CDC Eviction Moratorium

On May 5, the U.S. District Court for the District of Columbia entered an order setting aside the nationwide eviction moratorium issued by the Centers for Disease Control and Prevention (CDC) on September 4, 2020 and since extended multiple times. The current order was scheduled to expire on June 30, 2021. 

The lawsuit was filed by three landlords impacted by the moratorium, the Alabama Association of Realtors, and the Georgia Association of Realtors. The Court agreed with their argument that the Director of the CDC had overstepped the authority delegated to Health and Human Services (and in turn to the CDC) in the Public Health Service Act (PHSA). The Department of Justice (DOJ) is appealing the ruling. 

About the CDC Order and Eviction Moratoriums

The CDC order prohibited residential evictions based on non-payment of rent if the tenant completed a form certifying that they had been financially impacted by Covid and were making a good faith effort to make whatever payment they were able. While the temporary halt on evictions included in the CARES Act related only to properties with government-backed mortgages and landlords participating in certain federal programs, the CDC order extended to all residential properties in the United States. 

The order was based on the concern that residential evictions would increase the spread of Covid-19 by forcing people into more crowded living conditions with friends and relatives, shelters, and onto the streets. A later extension of the order included additional data supporting the assertion that evictions increased Covid risks. 

But, the moratorium left many landlords in a bind, as mortgage payments, maintenance costs and other expenses associated with renting continued when the rent dried up. 

In response to the most recent Household Pulse Survey from the U.S. Census Bureau, nearly 7 million households reported being behind on their rent payments. Households with children were 73% more likely to report having past-due rent. Nearly 12 million households said they had no confidence or only slight confidence that they’d be able to make their upcoming rental payments.

While many states ordered some sort of freeze or limitation on residential evictions, some states did not. And, the protections in many others was lesser in scope than those offered by the CDC order. Many have expired, meaning the CDC order was the only thing standing between tenants in many states and being turned out into the pandemic. Fortunately, California’s statewide eviction moratorium has been extended through at least the end of June. 

What’s Next for California Renters? 

The Appellate Court may rule in the government’s favor and reinstate the order. However, the current CDC order expires at the end of next month, and it’s unclear whether it will be further extended even if the DOJ prevails. But, that won’t immediately impact California renters, since the state moratorium provides similar protection. 

We don’t yet know whether the California eviction freeze will be extended beyond the end of June. But, the state moratorium includes an important protection that wasn’t offered by the CDC order. California renters who attest that they cannot pay part or all of the outstanding balance for pandemic-related reasons can’t be evicted for past-due balances incurred during the moratorium, even after the order expires. 

California is also putting federal rental assistance funds to work to help eliminate those past-due balances and provide income for landlords who have been financially stressed by the pandemic and the related pause on evictions. 

Two Types of Rental Assistance

California Covid-19 Rent Relief works in two different ways, depending on the cooperation of the landlord. 

For eligible renters, the program will pay 80% of past-due rent incurred between April 1, 2020 and March 31, 2021 if the landlord agrees to waive the remaining 20% of the past-due balance. If the landlord won’t agree to accept the 80% payment as full compensation for rents due during that time period, the tenant can still apply for assistance. However, the maximum amount allotted will be 25% of the outstanding balance incurred during the applicable time period. 

The structure incentivizes landlords to waive the remaining balance and give the tenant a fresh start, since the payment the landlord receives from rental assistance funds will be considerably larger with the waiver. 

Who Qualifies for Rent Assistance? 

To qualify for assistance, the renter must have:

  • Qualified for unemployment benefits, or
  • Experienced a reduction in household income, or
  • Incurred significant costs, or
  • Have experienced other financial hardship due to Covid-19

AND demonstrate a risk of homelessness or housing instability, such as: 

  • A past-due rent notice or eviction notice
  • A past-due utility notice
  • Unsafe or unhealthy living conditions, or
  • Any other evidence of risk

AND have a household income of 80% of the Area Median Income (AMI) or less. 

Exploring Additional Options for Past-Due Rent

California residents have more protection than most when it comes to facing eviction during and in the aftermath of the pandemic. But, the moratorium will end, and not everyone qualifies for rent assistance. If your income is too high to get help paying your past-due rent, you have past-due balances from before April 1, 2020, or you otherwise slip through a crack in pandemic-related rental assistance, you may have other options. 

For example, past-due rent can typically be discharged in Chapter 7 bankruptcy, or may be spread out over time in a Chapter 13 case. To learn more about your options, schedule a free consultation with one of the experienced Los Angeles bankruptcy attorneys at Borowitz & Clark. Just call 877-439-9717 or fill out the contact form on this page to get started.

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