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How Does the New CDC Eviction Moratorium Work?

As of September 2, 2020

Now that the new CDC eviction moratorium is in place, many are wondering how it will work and how it will impact evictions in Michigan. Starting September 4, 2020, the moratorium does not allow a rental property owner, landlord, manager, agent, etc. to file an eviction case for non-payment of rent where the tenant formally declares on a written form under the threat of perjury that (“I” meaning “tenant”):

  • I have used best efforts to obtain all available government assistance for rent or housing;
  • I either expect to earn no more than $99,000 in annual income for Calendar Year 2020 (or no more than $198,000 if filing a joint tax return), was not required to report any income in 2019 to the U.S. Internal Revenue Service, or received an Economic 37 Impact Payment (stimulus check) pursuant to Section 2201 of the CARES Act;
  • I am unable to pay my full rent or make a full housing payment due to substantial loss of household income, loss of compensable hours of work or wages, lay-offs, or extraordinary out-of-pocket medical expenses;
  • I am using best efforts to make timely partial payments that are as close to the full payment as the individual’s circumstances may permit, taking into account other nondiscretionary expenses;
  • If evicted I would likely become homeless, need to move into a homeless shelter, or need to move into a new residence shared by other people who live in close quarters because I have no other available housing options.
  • I understand that I must still pay rent or make a housing payment, and comply with other obligations that I may have under my tenancy, lease agreement, or similar contract. I further understand that fees, penalties, or interest for not paying rent or making a housing payment on time as required by my tenancy, lease agreement, or similar contract may still be charged or collected.
  • I further understand that at the end of this temporary halt on evictions on December 31, 2020, my housing provider may require payment in full for all payments not made prior to and during the temporary halt and failure to pay may make me subject to eviction pursuant to State and local laws.

 

The bar is set pretty high for eligibility and makes it a requirement that the tenant agrees to pay all the rent due after the moratorium is lifted—which maybe a sticky point for some tenants that simply don’t want to pay rent or be unwilling to put in writing that they understand that they will be obligated to pay past due rent in the future. However, there are likely some tenants that will meet the threshold and see this as the only way out and be willing to kick the can down the road.

The moratorium does not affect evictions of any other type, including those just for possession or failure to abide by other lease requirements.

How will the process likely go down?

The RPOA believes that once a Demand for Possession, Non-Payment of Rent is served on a tenant, the tenant can do one of the following:

  1. Pay the rent due.
  2. Contact the landlord and work out a payment plan that fits their budget.
  3. Contact 211 and seek assistance from the Michigan Eviction Diversion Program (EDP).
  4. Execute the Declaration statement. The tenant has contacted the EDP and was found ineligible for assistance and the tenant meets all the other requirements for eligibility under the CDC moratorium and provides the landlord with a signed and dated Declaration statement to that effect.
  5. Ignore the notice.

 

If the tenant chooses to do choice one or two, the landlord need do nothing further unless the tenant fails to meet their future rent obligations under the agreement. If that happens, a new Demand would have to be sent.

Under choice three, if something can’t be worked out with the landlord (or the tenant chooses not to work with the landlord), the tenant could contact 211 and/or the local EDP to seek assistance. If the program can provide assistance, the eviction would not go forward. (At this point, if the landlord refuses to accept the assistance provided by the EDP, it seems the tenant would then be eligible for protection under the new moratorium. There is a question as to how much assistance the landlord must accept if only a percentage of rent is available from an assistance program. It seems, at this point, that if a tenant is offered any amount of assistance, the landlord must accept that amount in lieu of full rent. If they do not, the tenant could, theoretically, be eligible for protection under the order. It should be kept in mind that the tenant has to affirm under penalty of perjury that they attempted to negotiate rent payments and made an effort to get Federal housing assistance.)

Under choice four, if the tenant has not been able to negotiate an affordable payment plan with the landlord and has been found ineligible for Federal housing assistance or other assistance that would have enabled them to pay rent. If all of this is true, and all the other criteria for eligibility is met, the tenant may execute and deliver to the landlord the Declaration statement. Keep in mind that the tenant must be willing to acknowledge and agree in the Declaration that they owe the rent and are required to pay all of the back rent, penalties, etc. in full. The moratorium does not prevent the landlord from sending a demand for payment without a demand for possession. (A tenant does not have to provide proof that they have met all the criteria under the moratorium; the landlord must accept their statement in the Declaration as factual and truthful. Of course, if a tenant commits perjury when signing the document, they will be in far more trouble than facing eviction.)

If the tenant chooses to ignore the Demand and does nothing, the eviction would go forward as normal—under current rules and orders regarding non-payment evictions in Michigan and under the CARES Act.

All other types of eviction are aloud under the moratorium as long as those evictions are allowed under State, local laws or the CARES Act.

If you have questions about the moratorium, please feel free to contact the RPOA office at 616-454-3385 between 9 a.m. and 4 p.m. or email us at contactrpoa@rpoaonline.org.

 

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