On Thursday, the U.S. Supreme Court entered an order that immediately invalidated the CDC eviction moratorium. I repeat, the CDC’s eviction moratorium has been invalidated.
A quick history so our readers can understand what the court did and did not do:
The Alabama Association of Realtors filed a lawsuit contending that the CDC eviction moratorium was unconstitutional. The trial court in the case said that the CDC’s Order (which set forth the moratorium) was unconstitutional. However, because this was a novel legal issue, the trial court issued a stay of its own order so that the matter could be reviewed on appeal on an expedited basis. On Thursday, the U.S. Supreme Court lifted that stay and thus made the trial court’s ruling valid. In other words, the trial court’s original ruling is enforceable and the CDC moratorium can no longer be enforced.
The underlying case will now proceed through the regular, slow appellate process. However, during the process of the appeal, the eviction moratorium cannot be enforced.
This was a 6-3 ruling.
Here are some excerpts from the U.S. Supreme Court’s ruling, which explain the Court’s logic:
The moratorium has put the applicants, along with millions of landlords across the country, at risk of irreparable harm by depriving them of rent payments with no guarantee of eventual recovery.
Despite the CDC’s determination that landlords should bear a significant financial cost of the pandemic, many landlords have modest means. And preventing them from evicting tenants who breach their leases intrudes on one of the most fundamental elements of property ownership—the right to exclude.
It is indisputable that the public has a strong interest in combating the spread of the COVID–19 Delta variant. But our system does not permit agencies to act unlawfully even in pursuit of desirable ends.
As noted above, the case will go through the regular appellate process. Therefore, the case is not finished. But, the U.S. Supreme Court revealed their opinion of the underlying case, writing, “[t]he applicants (the realtors) not only have a substantial likelihood of success on the merits—it is difficult to imagine them losing.” It is clear that the Supreme Court did not approve of an agency of the executive branch entering this order, which the Supreme Court believes greatly exceeds the powers of the CDC. The Court stated that any other action to halt evictions would have to come from the legislature.
We do not expect that the federal legislature will pass a national eviction moratorium again. Nor do we expect that Arizona will adopt its own eviction moratorium. Therefore, while Arizona landlords will have more hoops to jump through (as described below) the biggest depravation of private property rights is officially over.
THE CDC ORDER IS DONE…NOW WHAT?
With the end of the CDC eviction moratorium, the obvious question is, “now what?” This is the first time in over 17 months that we have not had an eviction moratorium in place. What are a landlord’s next steps?
Before addressing evictions, we must repeat that clients should continue to work with residents as much as possible. For those residents following payment plans and working with their landlords, nothing should change. We in the industry know that evictions are a last resort and should be treated as such.
For those residents who have not paid for months, landlords can complete evictions and obtain writs of restitution. It is important to note that while the CDC moratorium is over, other restrictions and requirements still exist. Additionally, the rental assistance is still available.
First, the Arizona Supreme Court has entered numerous administrative orders mandating extra steps for evictions. The court is requiring plaintiffs to disclose certain information in their eviction pleadings, including information about the CARES Act, whether rental assistance has been obtained, whether any rights have been waived, and whether there have been previous judgments. We have simplified all the extra information we need from clients who wish to file evictions in our eviction request form.
Second, there is still no clear answer about the 30-day notice requirement for properties that were covered by the CARES Act (those with federally backed or insured multi-family mortgages or that received federally-related housing assistance like Section 8 and other programs while the Act was in effect) and those referenced by the FHFA memorandum (properties with federally backed or insured multi-family mortgages). Even though no moratorium exists, the prevailing belief is that the requirement for a 30 day notice to vacate is still valid, particularly since the FHFA reiterated this in a July announcement. Remember, the 30 day notice originated from the CARES Act, and had nothing to do with the CDC. The FHFA then reiterated that a 30-day notice to vacate for non-payment is required for any renters at properties with a federally backed multi-family mortgage, like Fannie Mae or Freddie Mac.
We expect that there will be additional actions by federal agencies restricting properties with federal mortgages and those who participate in federal programs. Just yesterday, the White House announced another push to “curb” evictions.
And, on Thursday, the White House issued a statement regarding the Supreme Court’s decision in which the President urged cities, states, “local courts, landlords, [and] Cabinet Agencies – to urgently act to prevent evictions.”
Simply, we expect more changes to come even though the CDC moratorium is over.
Finally, as noted in a previous newsletter, for those cases that have been put on hold because of the CDC, here are the options:
1.For evictions filed during any moratorium and delayed as a result, if no judgment was entered the court is required to set a hearing on the case. (This will be a small portion of cases.)
2.If a judgment was obtained but the writ of restitution delayed, the plaintiff may file a motion to amend the judgment and/or an application to execute the writ of restitution. On motions to amend the judgment, the court is required to set a hearing. On motions to execute the writ, the court is only to set a hearing if it appears to the court “that a new tenancy may have been established, that the judgment should be amended, or if the court finds that a hearing is appropriate . . . .” Any such hearing must be set at least 3 days out, but not more than 6 days out. Unfortunately we do not yet know what standard courts will be using to determine whether a rental agreement was reinstated.
3.Landlords may serve new notices and file new eviction actions. The AZ Supreme Court has indicated its preference that new cases not be filed and that old judgments be amended under #2 above. However, when a new case is filed, a judge does not need to decide whether or not the lease was reinstated and it is simply a matter of whether the landlord followed the law.
Zona Law Group P.C.