What May Happen When the National Eviction Moratorium Expires This Year

What May Happen When the National Eviction Moratorium Expires This Year

Jane Meggitt
 | 
Approximately 8 million rental properties nationwide were impacted by the imposition of the Center for Disease Control’s national eviction moratorium in the wake of COVID-19 and massive job losses. The average tenant owes $5,600 in back rent. Those who do not have the funds may soon find themselves evicted. There is a real fear that thousands of families could find themselves homeless. One activist fears massive evictions unlike anything seen before.

The CDC defines eviction as “any action by a landlord, owner of a residential property, or other person with a legal right to pursue eviction or a possessory action, to remove or cause the removal of a covered person from a residential property.”

The moratorium was designed to delay evictions, not to prevent them. When the eviction moratorium expires, tenants must pay their landlords the amount of back rent owed. If they cannot do so, the landlord may evict them.

On May 5, 2021, a federal judge ruled the CDC overstepped its authority when it issued a national eviction moratorium. The moratorium has been set to expire June 30 after receiving previous extensions. The Justice Department announced it will appeal the decision, and the judge agreed to put the ruling on hold pending the appeal.

Keep in mind this ruling pertains only to the national moratorium.

State and local eviction moratoriums are unaffected.
However, many states, including California, have moratoriums ending June 30. Even the national moratorium has been
interpreted differently depending on the state, and even on the county.

Evictions have continued in some cases because of varying legal interpretations.

The Perils of Eviction
An eviction causes all kinds of hardships for those seeking a new place to live. Many landlords will not consider tenants with evictions on their records. The eviction harms the tenant’s credit score. If the evicted person can find a landlord to rent to them, they are likely to end up in dangerous neighborhoods and dilapidated properties. The landlord will probably charge a higher rent because of the tenant’s eviction record.

California has instituted rules that landlords cannot deny housing to applicants because they accrued rent debt between March 2020 and June 2021. Nor can landlords sell or assign rent debt until July 2021, in an effort to keep debt collectors from reporting such debt to national credit bureaus and thus damaging tenant credit scores.

The Scope of the Problem
It is not clear just how much is owed in back rent, and estimates vary. Potentially, as many as 9.4 million households owe a combined $52.6 billion.

In March, the Census Bureau reported one out of seven renters were behind in their payments. That is an improvement over January, when one in six renters reported being behind. The latter number is three times the typical late payment rate. During the foreclosure crisis following the Great Recession, seven million families lost their homes between 2008 and 2012. Compare that with more than 9 million facing loss of their homes within months after the moratorium ends.

The states with the highest number of tenants behind on their rent, exceeding 19 percent, include:
  • California
  • Georgia
  • Louisiana
  • Mississippi
  • Nevada
  • New York
  • Oklahoma
  • Pennsylvania
A huge backlog of eviction cases is expected. Processing these evictions could take several months or more.  

Undue Burden
Property owners challenged the CDC’s moratorium from the beginning, citing the undue burden placed on landlords. About half of the rentals affected are owned by small landlords, those who manage their own properties and depend on them as a primary source of income. While tenants have not paid their rent, these landlords are still responsible for paying the mortgage, taxes and insurance. The government estimates about one-third of small landlords are facing foreclosure or bankruptcy.   

The moratorium also left landlords without a way to rid themselves of problem tenants. Such tenants may damage the properties, and there is nothing the landlord can do about such destruction. Because landlords are legally responsible for the upkeep of their properties, they may be liable for fines levied by the municipality due to trash and other violations by the tenants.

Without tenant income, landlords may prove unable to pay for necessary repairs to their building, exacerbating a property’s downward spiral. Some landlords have resorted to offering to pay delinquent tenants a modest amount of money – and forgive the back rent –if the tenant moves out.

Contact an Attorney

If you are facing eviction when the moratorium ends and cannot pay your rent, or if you are a landlord facing bankruptcy or foreclosure because of the moratorium, seek legal advice as soon as possible. An attorney can help guide you through this complicated and constantly evolving situation.


This article is intended to convey generally useful information only and does not constitute legal advice. Any opinions expressed are solely those of the author, not LawChamps.
 
Jane Meggitt

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