In an unprecedented move, the Centers for Disease Control and Prevention (CDC) issued a temporary order (“Order”) halting evictions nationwide through December 31, 2020. This move was not necessarily unexpected. On August 8, 2020, President Trump issued an Executive Order ordering the CDC and other federal agencies to look into a potential eviction moratorium to slow down a homeless crisis which could then lead to a further deepening of the health crisis related to COVID-19.

“The constitutionality of this order is dubious at best,” said Nema Daghbandan, Partner and Department Head of Banking and Finance at Geraci LLP. “However, the national sentiment right now is the protection of tenants and homeowners, and we should expect a variety of state and federal orders and other measures during the remainder of this election season.”

The main takeaways of the CDC Order are as follows, with a more detailed outline prepared by the American Association of Private Lenders and its General Counsel, Geraci LLP, here.

• Timing. The moratorium went into effect on September 4, 2020 and extends through December 31, 2020.
• Coverage. The moratorium affects all residential tenants.
• Tenant’s Rights. If a tenant provides a declaration with specific representations to a landlord during this period, the landlord cannot evict the tenant.
• Landlord’s Recourse. A landlord cannot evict the tenant during this time period, but they may charge fees, or other penalties permitted under the lease and can require the tenant to pay all past due amounts immediately, and in a lump sum on January 1, 2021 when the Order expires.
• Other Evictions. A landlord may still evict tenants for other nonpayment grounds such as criminal activity, or other violations of the lease agreement between landlord and tenant.
• Lender’s Take. The Order does not directly affect mortgage lenders. Landlords are still obligated to make mortgage payments to their lenders even if the tenant is unable to pay the landlord. However, landlords will be under significant financial pressure and may be seeking additional forbearance from mortgage lenders because of this Order.
• Landlord Penalties for Not Following the Order. Massive fines of up to $500,000 per violation may be enforced by the United State Department of Justice.
• Interaction with Other State Eviction Moratorium Any state with a greater restriction than the Order shall supersede the Order.

Whether the CDC or the President have the authority to issue this sweeping of an Order is an issue that is guaranteed to be litigated and will ultimately be decided well after the expiration of this Order. AAPL and its Counsel, Geraci LLP, believe the Order is likely unconstitutional and a violation of due process for landlords.