August 12, 2020

Volume X, Number 225

August 12, 2020

Subscribe to Latest Legal News and Analysis

August 11, 2020

Subscribe to Latest Legal News and Analysis

August 10, 2020

Subscribe to Latest Legal News and Analysis

Landlords Tread Carefully Through Eviction Waters

State Eviction Moratoriums

Many states throughout the country have implemented eviction moratoriums, prohibiting landlords from evicting tenants for a period of time during the COVID-19 pandemic. The specifics of such moratoriums vary widely by state and, in some places, the moratoriums have already expired and landlords are free, at least under state law, to proceed with evictions pursuant to such state executive orders.

In Michigan, Gov. Gretchen Whitmer initially issued Executive Order 2020-54 (COVID-19) preventing residential tenant evictions unless there is a risk to people or property. The governor has since extended the content of the original executive order, most recently with Executive Order 2020-134, which rescinded the previous orders and further extended the moratorium to July 15, 2020. However, the restrictions do not apply if the tenant, person claiming under the tenant or mobile home owner presents both a substantial risk to another person, as well as an imminent and severe risk to property.

Landlords Beware: CARES Act Considerations

Despite the expiration of state-specific eviction moratoriums, landlords should be keenly aware of their potential ongoing obligations under the CARES Act federal moratorium.

Pursuant to the CARES Act, beginning on March 27, 2020 and extending for 120 days thereafter, landlords of covered properties are prohibited from filing new eviction actions against tenants for nonpayment of rent. The Act further provides that a landlord of such covered property must provide the tenant with 30 days of notice prior to eviction, and such notice may not be given until after the expiration of the moratorium period. It is important to note that evictions filed prior to March 27, non-covered tenancies and evictions based on something other than nonpayment of rent are not prohibited by the CARES Act.

Under the Act, covered properties include properties that: (1) participate in a “covered housing program” as defined by the Violence Against Women Act; (2) participate in the “rural housing voucher program under section 542 of the Housing Act of 1949;' (3) have a federally backed mortgage loan; or (4) have a federally backed multifamily mortgage loan. It is important to note that the provisions of the CARES Act do not absolve tenants of their legal obligation to pay rent to their landlords, and tenants may face legal liability including evictions following the expiration of the moratorium.

As such, although many landlords throughout the country may be able to proceed with evictions pursuant to state law, federal law may still prohibit such actions if the property in question falls within the purview of the CARES Act. In Arkansas, for example, despite the expiration of the moratorium allowing evictions to proceed as of May 18, 2020 the Arkansas Supreme Court has ordered that any eviction complaint filed May 18, 2020 through July 25, 2020 must affirmatively plead that the property subject to the eviction dispute is not a covered dwelling under the CARES Act.

Other Considerations

Landlords should ensure that any eviction proceeding not only complies with state law and the CARES Act but also with potential city, state and other federal housing agency regulations. For example, the Boston Housing Authority has voluntarily postponed filing eviction actions during the COVID-19 pandemic, and the U.S. Department of Housing and Urban Development authorized a temporary moratorium effective as of March 18, 2020 on all evictions of tenants living in properties secured with single-family mortgages insured by the Federal Housing Administration, which was recently extended until at least August 31, 2020.

© 2020 Varnum LLPNational Law Review, Volume X, Number 185


About this Author

Thomas W. Forster Real Estate Attorney Varnum Ann Arbor, MI

Tom is a real estate and corporate attorney. He counsels clients on complex transactional, corporate and real estate matters, including the acquisition, financing, sale, leasing and subleasing of commercial property; the negotiation of joint ventures; asset and stock purchase transactions; the syndication of membership interests; and the acquisition, financing, exchange (1031 exchange), preservation and sale of multifamily, office, industrial, retail shopping center, condominium and mixed use developments. Tom represents a range of clients from publicly-held companies to closely-held...

Melissa Papke, Real Estate Attorney, Varnum, Commercial Leasing Lawyer

Melissa is a partner and leads the Real Estate Practice Team. She focuses her practice on corporate and real estate matters, with an emphasis on commercial sales, acquisitions, leasing, and redevelopment, as well as construction law. She has extensive experience in structuring primary and replacement real estate financing with banks, private investors, and joint ventures, including mezzanine and other uniquely structured secured loan facilities. She offers her clients significant experience in negotiating commercial and industrial design and construction contracts, and counsels her clients throughout the construction process. In addition, Melissa has developed expertise in numerous aspects of residential and mixed use condominium projects, as well as environmental transactions, ranging from conservation easements and charitable donations, to sustainable forest management and carbon offset credits.

Lauren Potocsky, Real estate, banking, litigation attorney, Varnum

Lauren works with Varnum's Litigation, Real Estate, Corporate and Estate Planning Teams. She has a particular focus on litigation and has experience in commercial and environmental litigation matters. In the real estate area, she is experienced in drafting lease agreements and commercial loan documents. Prior to entering private practice, Lauren was a researcher for a public records and investigative research firm. She also formerly served as a legislative intern for the Michigan House of Representatives. While in law school, Lauren was a member of the first place team of the Arthur Neef...