Here’s a look at what private lenders need to know about the executive order.

As part of a concerted effort to mitigate the spread of the COVID-19 pandemic, newly-elected President Joe Biden implemented a flurry of 17 executive orders within a matter of hours after his inauguration. One of them is specifically intended to offer protection for tenants across the nation. The original version of the executive order was scheduled to expire on January 31, and one of the Biden administration’s first actions extended the deadline through March 31, 2021.

What Else Does the EO Include?

The executive order additionally provides for an extension of the corresponding foreclosure moratorium on federally backed mortgages, including those affiliated with the USDA, VA, and HUD.

It also permits property owners to submit an application for mortgage forbearance should they wish to do so. In addition to the extended eviction moratorium, President Biden has requested that Congress funnel more than $30 billion in additional rental assistance. The proposed action earmarks $25 billion to be used as direct rental relief to property owners, with the remaining $5 billion planned to assist in covering energy and utility expenses via initiatives like the Low-Income Home Energy Assistance Program.

Background: Why an Extension?

Shortly after President Biden issued the executive order, there was widespread expectation of further extensions of the eviction moratorium. Notably, the administration extended the foreclosure moratorium for loans covered under the CARES Act through June 30, 2021.

Initially implemented in September 2020, the original federal eviction moratorium, in conjunction with several comparable eviction pauses enacted by state and local governmental entities, were intended to bring financial relief to countless renters that are finding it hard to make ends meet due to growing unemployment rates. Housing advocates have applauded President Biden’s decision, emphasizing the fact that halting evictions is part of a larger public health imperative to stop the spread of COVID-19.

However, the logic used by the Trump administration and now carried over by the Biden administration appears dubious and mostly politically motivated; specifically, that a temporary pause in evictions has any significant impact related to the spread of the novel coronavirus.

Approximately 20% of American households were delinquent on their rental payments as of December 2020, according to a study conducted by the Census Bureau. During 2020, mandatory stay-at-home orders were rolled out to curb the spread of coronavirus; however, governmental initiatives to provide some form of rental assistance have been somewhat limited. This has prompted many tenants to ask: How can the government expect me to stay at home if I can’t stay in my house?

In September 2020, former President Trump ordered the CDC to place a federal prohibition on evictions. That executive action was applicable to tenants who anticipated earning less than $99,000 (or $198,000 if filing jointly) in 2020, experienced a significant drop in salary, attempted to pay some or all rent, or tried to submit an application for rental assistance and would be rendered homeless or would experience substandard living conditions if evicted from their current home. The tenant was also required to sign a declaration, under penalty of perjury, and file it with their landlord.

On the state level, some jurisdictions implemented more robust forms of eviction protective measures and rental assistance initiatives. On the other end of the spectrum, other states allowed their local moratoriums to expire at the close of 2020.

Analysts claim the effects of doing so have had deadly consequences. A study conducted by public health specialists from UCLA and Johns Hopkins University found that up to 433,700 COVID-19 cases and nearly 10,700 deaths can be directly linked to the continuance of evictions during the pandemic. Certain demographics and minorities have been disproportionately impacted by COVID-19 and the subsequent increase in housing displacement.

Who Qualifies?

The renewed CDC moratorium on evictions is applicable to the majority of tenants, but not all of them are eligible per the guidelines of the executive order. Renters must meet certain threshold criteria to take advantage of the protections the moratorium offers. It should be noted, however, that regardless of what moratorium a renter is covered by, their outstanding rent payment balance will not be canceled or waived as part of the process. They will likely still owe the rent when eviction moratoriums at all levels are permanently lifted.

Tenants can still be evicted for offenses other than being delinquent on their rent installments. For example, the executive order does not protect renters if they are:

• Being evicted for engaging in criminal activity on the rented property.
• Putting the health or safety of other property residents at risk.
• Damaging or posing an immediate and significant risk to the rented property.
• Violating any applicable building code, health ordinance, or similar regulation pertaining to health and safety.
• Violating any other provision or contractual obligation of the lease agreement.

 The executive order applies to any property that is leased for residential use, including any house, building, mobile home or land in a mobile home park, or comparable dwelling leased for residential use. Temporary or seasonal tenants are excluded from the order.

Renters are eligible for protection as part of the federal moratorium on evictions if they meet the following conditions:

• Renter is unable to pay their rent due to a significant loss of income or increased medical expenses
• Renter received under $99,000 in 2020 (or $198,000 as a family), or was not obligated to report their income in 2019, or was issued a stimulus check
• Renter attempted to obtain rental assistance from their state or municipal government if it was being offered
• Renter plans on paying rent, even if it is a partial payment, if they are able to afford it
• Renter would be rendered homeless or living in a substandard capacity if evicted from their current home

 If the conditions are met, the tenant must print the CDC declaration form and provide it to their landlord or property owner via either email or hard copy. All members listed on the lease or rental agreement contract are required to provide a copy of the form individually.

Renters who need this information in languages other than English—including Spanish, Chinese, and Arabic—can download the translated version of the CDC declaration forms via the Alliance for Housing Justice website.

Landlords who do not comply with the eviction moratorium could face a fine of up to $100,000 or one-year imprisonment, or both, if the noncompliance does not directly lead to the death of the former tenant. Landlords who violate the order and the violation results in a death can be fined up to $250,000 or one-year imprisonment, or both.