As readers know, our firm has advised clients with CARES Act-covered properties (properties with mortgages backed by Fannie Mae or Freddie Mac or those otherwise covered by the CARES Act due to participating in federal programs), to give thirty (30) days’ notice to vacate before the tenant can be required to leave the unit.
This started at the end of the CARES Act and was recently reiterated by the Federal Housing Finance Agency (“FHFA”) for all properties with federally-associated multifamily mortgages in late July.
What has never been clear since the expiration of the CARES Act moratorium is what exactly CARES and the FHFA meant when they stated that landlords must give residents thirty (30) days to vacate the property after service of a Notice to Vacate.
The industry standard (AMA/NAA/our firm) approach to-date has been the safer one: that a tenant must be given a 30 day notice before filing an eviction.
The Arizona Supreme Court has implied that there is an alternative. After the FHFA published their requirements, the Arizona Supreme Court updated their website, as well as their administrative order, and the Arizona Supreme Court has now implied that landlords may use a hybrid notice that allows landlords to file evictions after 5 days (in the case of residential or RV space non-payment; or 7 days in the case of mobile home space non-payment), but that writs are not available for 30 days from the date of the termination/non-payment notice. The following is now stated on the Arizona Supreme Court website:
Minimum 30-day Notice to Tenant to Move Out: No landlord (public or private) whose underlying financing for a multifamily property is backed by the federal government (e.g., HUD/FHA or USDA), purchased or securitized by the Federal Home Loan Mortgage Corporation (Freddie Mac) or the Federal National Mortgage Association (Fannie Mae), or that is receiving assistance from the federal government may require a tenant to vacate their unit for nonpayment of rent until 30 days after the landlord has provided the tenant with a Notice to Vacate. Therefore, writs issued for those properties will be made enforceable after 30 days from the date the “5-Day Notice” is provided as required by state law.
We are also aware that Arizona Supreme Court staff was given a sample of a hybrid notice, and did not object to its use. While an approval would have been better, its still indicative that it was not prohibited in Arizona.
This appears to be an approval of a hybrid notice approach: the notice would be a 5 day notice for non-payment (or 7-day notice, as applicable), but would prevent the landlord from obtaining possession for 30 days. The notice would have to advise tenants that an eviction may be filed after 5 days (or 7 days) if the rent is not paid, but that the resident cannot be removed from the property before 30 days after the notice is served. The landlord could pursue the case as provided by state law and obtain a judgment, but the writ of restitution would be delayed until 30 days have passed from the date of service of the notice.
This approach has NOT been approved by any federal authority, but given that it comes from our Arizona Supreme Court, it carries significant weight. There is always the possibility that a tenant or the federal government could later challenge such a hybrid approach. We also cannot guarantee what a justice of the peace will do on any given day and it is always possible that they could dismiss a case if they find the notice to be invalid/insufficient.
Since no federal court or federal agency has approved this approach, the safest approach (and our advice) is to continue using the 30-day notice that CARES and FHFA-covered properties have already been using – giving 30 days before you file an eviction. However, this “hybrid approach” is an alternative for clients who may wish to file earlier–the Arizona Supreme Court has provided a legal argument as to why this is permissible. If clients understand this risk and wish to follow this new implication from the Arizona Supreme Court, they can use this new hybrid 5/30 day notice:
If you need a hybrid 7/30 notice (f0r mobile home parks) or hybrid short or long-term RV space notice (for RV parks), please contact our office.
Remember, if your properties switch to this new hybrid form, it is up to the property to remember NOT to order a writ before 30 days expire from the date of service of the notice. If the property files a writ early, that would be violating the FHFA memorandum and the CARES Act.
Zona Law Group P.C.