Eviction Ban Clarification Generates Confusion

by Chris on October 19, 2020

After enacting a ban on eviction filings for nonpayment of rent from September 4 through December 31, the Administration issued further guidance last week that is causing some confusion.

This latest guidance comes in the form of an FAQ offered jointly from the CDC, U.S. Department of Health and Human Services, HUD, and the U.S. Department of Justice. The additional clarification comes after at least two dozen lawsuits were filed challenging the legality of the federal eviction ban, which was issued by Executive Order without any corresponding stimulus funds for tenants or additional relief for landlords.

Many of those landlords challenging the federal ban already have experienced months of no or only partial rent payments and manage rental properties in states where local eviction bans have expired.

Despite the language in the original order halting evictions, the new guidance advises that the federal ban relates to removal of tenants, not eviction filings. It suggests that landlords can queue up a case now, and then proceed with efforts to evict the tenant after the ban expires on December 31. A handful of landlord associations already are advising landlords to move forward with eviction cases.

On the face of it, the ability to file an eviction now and avoid the onslaught of cases expected in January would benefit landlords. However, the FAQ is not legally binding and courts may not agree that the language of the federal order allows them to proceed with an eviction filing or issue any orders until the ban expires.

Given the logistics of eviction filings in many jurisdictions, like a requirement that the tenant be served with a summons to appear that includes a hearing date, some courts may be hesitant to commit time and resources needed to pursue cases that could be held in limbo or require multiple hearings to update eviction orders.

The government’s FAQ also suggests that landlords are not required to provide notice of the eviction moratorium to tenants when filing an eviction. However, at least one state is taking issue with that interpretation.

The Texas Supreme Court has ordered landlords to include notice of the eviction moratorium and the right to submit a declaration in the eviction filing documents. The court has indicated that judges have the authority to ask a renter if they are aware of the eviction moratorium, and landlords must explain if they’ve received a tenant declaration. It is likely more courts will take a similar approach to avoid unnecessary hearing delays, continuances, and appeals.

Other courts are looking at ways to preempt the anticipated glut of eviction cases when the ban expires. Nevada courts, for instance, are looking to send eviction cases to mediation first, prompting an additional 30-day delay.

Even if a court is willing to enter the eviction order early, filing an eviction so far in advance leaves disgruntled tenants in the property for months with nothing to lose, increasing the risk of subsequent rent defaults and property damage. The most likely scenario: tenants realize they have ample time to live rent free, and then move out at the last minute.

Tenants subject to the eviction moratorium still owe rent under the order, including late fees or interest provided for in the lease agreement. That entire sum will be payable in January under the current order. It is estimated hundreds of thousands of tenants will face eviction in 2021, and delays in hearing cases and processing orders appear inevitable.

Landlords who already were in process of evictions are particularly vulnerable to income loss. Because the effective date of the federal eviction ban is September 4, any eviction for nonpayment of rent initiated prior to that now is subject to the moratorium. If the tenant submits a declaration under the federal order that the pandemic is the reason for nonpayment, a court may not issue the eviction order until January.

For more on the federal eviction ban, including which tenants are covered and tenant declarations, see our previous post, Extended Eviction Ban a Setback for Landlords.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

Click Here to Receive Landlord Credit Reports.

Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

{ 0 comments }

Louisiana’s legislature rejected a bill that would have prevented landlords there from obtaining eviction records on tenants who did not pay rent during the pandemic.

The measure would have prevented courts from reporting eviction cases for nonpayment that occurred during a period from March 16, 2020 to August 1, 2021. Proponents argued that this would create a safe harbor for tenants struggling to recover from job losses and unexpected expenses caused by the pandemic. Experts are forecasting the state could see 140,000 such eviction filings next year.

Those who opposed the measure include a local landlord association which argued that tenants deserving of forbearance could not be distinguished from those who had the money to pay rent and chose not to.

Court administrators who would be forced to create and maintain a separate data storage system to comply with the law without any additional financial assistance opposed the measure.

A local press association also objected, arguing that the law would prevent the media from accurately tracking and reporting on eviction cases.

The bill was defeated by an 8-3 vote in committee.

But the introduction of the Louisiana measure highlights an ongoing trend in many cities and states across the country to limit the information landlords can consider when screening rental applicants.

For instance, Clean Slate legislation aimed at limiting criminal history is gaining momentum. Louisiana passed a similar initiative this summer, although that measure was centered on removing onerous administrative barriers that prevented those who were entitled to criminal record expungement from asserting their rights.

In other areas, like Portland, Oregon, the Clean Slate initiative is supercharged to include violent crimes, leaving landlords blind to past criminal behavior and preventing them from assessing an individual applicant’s risk of recidivism. Under that ordinance and those like it, a person could complete a lengthy prison sentence for a violent crime and be eligible to apply for housing the next day.

Landlords stand to lose plenty should a rental applicant with a criminal history repeat the pattern. Negligence lawsuits are a real concern, and Clean Slate initiatives do not offer landlords legal immunity from lawsuits should someone else fall victim to a “foreseeable” crime committed by a tenant with a history of violence or burglary. Insurance premiums may increase. Appraisal values may be impacted, and some lenders may refuse to fund loans or refinance properties in crime-ridden areas.

A handful of lawmakers would like to curb the use of credit reports, in addition to limits on eviction and criminal histories, arguing that poor credit should not be an indication of a person’s qualifications as a renter.

When laws like these are coupled with first-in-time rules that require landlords to accept the first tenant with minimum qualifications, good tenants who have paid on time, preserved their credit, and maintained good rental history are marginalized, and may lose out on housing to tenants who wind up being evicted.

It’s easy for landlords to see how these limitations on tenant screening information lead to income loss. Tenants who already have poor credit or a bad rental history have nothing more to lose — and no incentive to pay rent or honor the lease agreement.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

Click Here to Receive Landlord Credit Reports.

Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

{ 0 comments }

3 Ways to Avoid Nightmare Tenants in 2021

October 19, 2020

With an expected wave of eviction filings for nonpayment of rent to begin in January, rental applicants are going to begin to line up for vacancies. Some paid rent and simply are relocating. Others didn’t pay anything and they’re leaving before the current landlord has a chance to get an eviction order. Can you spot […]

Read the full article →

Lease Clauses That Prevent Income Loss

October 19, 2020

A lease agreement should include provisions that help landlords avoid income loss — including these: Joint and Several Liability “Tenants shall be jointly and severally liable for all obligations under this lease.” Few tenants understand the legal ramifications of renting with roommates. These relationships are tricky and tenants need to understand the commitment they are […]

Read the full article →

Tenant Screening: Outsmarting the Artful Dodger

October 13, 2020

Most rental applicants out there right now are decent people looking for a place to live. But among them are a handful who have no intention of paying rent, and others who have shown no respect for their previous landlords or tenancy agreements. The trick to tenant screening, of course, is distinguishing between them. In […]

Read the full article →

Landlord to Pay $15,000 to Rejected Applicants

October 13, 2020

An Ontario landlord was ordered to pay $15,000 and attend Human Rights training after rejecting a couple applying for a vacancy because the husband was not white. According to a published decision at the Ontario Human Rights Tribunal, when the wife responded to a Kijiji ad for a townhouse for rent, the landlord responded by […]

Read the full article →

Vancouver Council Seeks to Ban “No Pets” Leases Throughout British Columbia

October 13, 2020

Vancouver’s City Council is considering a motion calling for a province-wide prohibition on landlords who refuse to accept tenants with pets. Councillors argue that pets are a way for residents to soothe the emotional fallout from the pandemic and resulting social isolation. The motion submitted to Council for consideration this week calls upon the mayor […]

Read the full article →

What Tenants, Landlords Can Do to Prevent Mould

October 13, 2020

With pandemic precautions still in place as we approach the winter months, it is important for landlords to limit property visits. Mould is a pesky problem that is difficult to remedy once it takes hold. Potential health consequences require both tenants and landlords to do what they can to prevent or mitigate mould issues. What […]

Read the full article →

Extended Eviction Moratorium a Setback for Landlords

September 21, 2020

As many states were set to lift bans on eviction proceedings against nonpaying tenants, the President signed an Executive Order directing the CDC to declare a public health emergency and to implement a ban on evictions. That ban, which began September 4, cites the need for tenants to have a place to quarantine, isolate, and […]

Read the full article →

More Landlords Offer Rent Concessions

September 21, 2020

According to a new survey conducted by real estate giant Zillow®, landlords now are nearly twice as likely to offer rent concessions to new applicants as they were earlier this year. In February, some form of concession was offered by 16% of landlords, while in July that number jumped to over 30%. That compares to […]

Read the full article →