On January 20, 2021, President Biden was sworn into office. The very same day, he signed 15 executive orders, addressing such varying topics as the border wall and LGBTQ issues in employment. Most importantly for investors, he signed a two-month extension of the Center for Disease Control Eviction Moratorium (“Moratorium” or “CDC Order.”). While this was one of the very first orders under the Biden administration, we do not expect this to be the last moratorium this year. Unfortunately, this last year has shown that moratoriums may be the new norm for a while.

On September 4, 2020, the CDC first issued its order. Based upon the president’s executive order the CDC Order has now been extended until March 31, 2021. It prevents a landlord from evicting a tenant for non payment of rent after the resident signs a declaration saying that they meet 5 qualifications set forth by the CDC. The resident does not have to prove they qualify, they merely have to sign the declaration. In Arizona, as of the writing of this article there is currently a split amongst the court on what happens when a tenant signs the declaration and an owner files an eviction. Some courts grant judgment but delay the writ indefinitely. Other courts refuse to even hear the case and merely continue it. We believe that the latter option is unconstitutional and deprives owners of access to the courts. We are hoping that this issue/split will be resolved shortly.

Beyond the foregoing, if a landlord then wants to proceed through an eviction and have the resident removed via a writ, the landlord can challenge the CDC declaration and have a hearing to prove why they believe the resident lied on the declaration. The landlord would have the burden to prove what element in the declaration, does not apply to this specific resident. Unlike many other lawsuits, when the burden is on the person seeking the protection under the law, here it is the owner’s burden to show that the resident is lying on the declaration.

Based upon our experience, the main elements an owner can challenge are as follows: (1) the tenant has used best efforts to obtain all available government assistance for rent or housing; and (2) the tenant is using best efforts to make timely partial payment to the best of their ability, taking in to account their nondiscretionary expenses. These motions should not be filed liberally and we are taking a conservative approach to ensure that the CDC order is not violated. There are significant financial penalties as well as potential jail time if someone violates the CDC Order.

Please note that we do not believe this will be the end of the CDC Order. President Biden announced his proposed plan (entitled “American Rescue Plan”) which included an extension of the moratorium until the end of September, 2021. However, that plan needs congressional approval. Therefore, he signed an Executive Order extending the eviction moratorium until March 31, 2021. It is expected that the legislature will look at a longer extension.

by Mark B. Zinman