The CDC Eviction Moratorium and You
The big news if you own property this past week comes from the CDC. If you haven’t heard, the CDC issued a nationwide moratorium on evictions to tenants who lost their job, or had reduced wages due COVID-19. The idea being that large amount of evicted and now homeless tenants crammed onto the streets or into a tiny apartment would become the next hotspot for contracting and spreading COVID-19. As a property owner with dozens of tenants; an eviction moratorium wasn’t the first thing that gave me pause. It was that the CDC had the power to issue and enforce such a thing. After all, whenever I thought of the CDC I thought of a bunch of people worrying about health issues and well, diseases. That and people in full-on level 4 biohazard gear working in very secure laboratories on some very sinister microbes. Far reaching executive powers over landlords didn’t strike me as something the CDC would have.
So does another eviction moratorium mean we’re all screwed and will default on our mortgages? What are the terms of the moratorium for tenants and property owners? And does the CDC have the power to issue said moratorium? Let’s discuss in this episode.
On September 4th, 2020 The CDC issued a ban on evictions until December 31 if a tenant renting a residential property met the following guidelines.
-They are unable to make full or partial rent payments due to job loss, reduced hours or wages, or large medical expenses exceeding 7.5% of their adjusted gross income.
-They are making their best effort to make timely partial payments as their circumstances permit
-for 2020 they won’t earn over $99,000 if single or 198,000 if married, or weren’t required to file a 2019 tax return,
-They received an Economic Impact Payment check
-They have used best efforts to obtain all government assistance for rent or housing.
-If evicted they’ll be homeless or will be forced into living in a residence in close quarters with others.
However, the CDC does say that they still must try to pay rent, they can be evicted for reasons other than non-payment of rent, and that after the end of the year they are still liable to their landlord for all payments and late fees that were unpaid. Furthermore, they must download and print a specific form by the CDC stating the above and sign it under penalty of perjury and give it to their landlord.
So, does this give every tenant in the nation another excuse not to pay rent and not face the penalty of eviction? No, it doesn’t. This isn’t the first eviction moratorium of 2020. Overall, thanks to previous stimulus payments, unemployment payments, and who knows what other factors, rent collections are still in the mid 90 percent range across the nation. So, most tenants are paying their rent. I would guess that most will continue paying their rent if they’re able. After all, this moratorium just kicks the can down the road for your eventual eviction if you don’t pay.
But what about the legality of the CDC to issue such a moratorium? Can they really do that? Well, I guess it depends on what legal website you stumble upon while searching for that answer! Let’s go back to your civics class in high school and talk about separation of powers. It’s one of the great things about our democracy. Congress is elected by the people, are directly accountable to the people, and have the power to legislate on a national level. The executive cabinet-level agencies, which include the Health and Humans Services Department that the CDC belongs to, are not accountable to the people and only have limited policy-making powers granted to them by congress. So, did congress give the CDC power to ban evictions nationwide?
First, as previously mentioned, the CDC is part of the Department of Health and Human Services which is a cabinet-level executive branch of the federal government. The CDC is stating they have moratorium power because of the powers congress gave them in the Public Health Service Act of 1944 under section 361. This provision allows to CDC to make regulations necessary “to prevent the introduction, transmission, or spread of communicable diseases from foreign countries into the States or possessions, or from one State or possession into any other State or possession.” The moratorium also references a specific Code of Federal Regulations that permits the CDC to “take such measures to prevent such spread of the diseases [deemed] reasonably necessary” when the CDC determines that measures taken by any state are insufficient to stop the spread of diseases.”
Now, as far as I can tell, this power by the CDC has only been used to quarantine a medical worker who cared for an Ebola patient, regulate the sale of unpasteurized milk as well as the sale of baby turtles?!?!? So the jump from baby turtles to a sweeping nationwide ban on evictions is quite the jump. Will it hold up in the court of law? I don’t know. I’m not a lawyer but I know some of you are.
Either way, As a landlord I’ll follow the CDC guidelines for now. So far, only one of my tenants has followed through with the proper paperwork to prevent eviction, but is making payment arrangements with the property manager. 2020 continues to be an interesting year. But even with all that’s happened, I’m still happy that I own real estate and will hopefully close on 52 units at the end of November.
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