It seems eviction bans are on their way out. The CARES Act eviction moratorium expired last year, and though a new stimulus bill was passed just days ago, the package contains no similar protections for struggling renters. The Centers for Disease Control's eviction ban, which was implemented back in September and extended just weeks ago, is essentially the last man standing.
But its time may be running out. After a recent court ruling in Texas -- plus some involvement from the Department of Justice -- the CDC's order is now on tenuous footing. Here's what you need to know.
Questioning its constitutionality
At its heart, the CDC's order is an effort to slow the spread of COVID-19. Says the order: "In the context of a pandemic, eviction moratoria -- like quarantine, isolation and social distancing -- can be an effective public health measure utilized to prevent the spread of communicable disease…. Furthermore, housing stability helps protect public health because homelessness increases the likelihood of individuals moving into close quarters in congregate settings, such as homeless shelters, which then puts individuals at higher risk to COVID-19."
The ban -- as well as others that have come before it — have naturally put landlords in a bind financially, and many have taken legal action to fight back.
The most successful thus far has been Terkel et al v. Centers for Disease Control, in which a Texas landlord sued the CDC and Department of Health and Human Services, calling into question the constitutionality of the eviction order.
The suit was originally filed in October, but just last month, a district judge ruled in Terkel's favor, stating that the CDC's actions were an overreach and the federal government does not, in fact, have the standing to invoke such an order.
What happens next
The U.S. Department of Justice officially appealed the decision about a week later, and the case will now head to an appeals court -- and potentially the Supreme Court -- in the near future.
While the legal battle continues, landlords will need to keep complying with the current order, which is set to expire at the end of this month.
"The decision, however, does not extend beyond the particular plaintiffs in that case, and it does not prohibit the application of the CDC's eviction moratorium to other parties," said Brian Boynton, acting assistant attorney general for the Justice Department's Civil Division. "For other landlords who rent to covered persons, the CDC's eviction moratorium remains in effect."
Under the order, tenants who make less than $99,000 (or $198,000 for a married couple filing jointly) cannot be evicted due to nonpayment of rent. They also need to make efforts to obtain government housing assistance, be facing financial hardship, and face potential homelessness should they be evicted to be eligible.
Landlords who don't comply with the order face fines of anywhere from $100,000 to $500,000, plus potential jail time.
The bottom line
The CDC order is actually set to expire on March 31, so unless these court cases move fast, we'll likely see an extension in the near future. In the meantime, real estate investors should keep complying and try these three options to ease the financial stress. Stay tuned for the latest updates here at Millionacres.