Eviction Moratorium Laws: What Do They Mean for Tenants and Borrowers?

Eviction Moratorium Laws: What Do They Mean for Tenants and Borrowers?

Since stay-at-home orders were implemented last month, federal, state and local governments, as well as some courts, have enacted temporary eviction moratorium laws and regulations to protect residential and commercial tenants from eviction for nonpayment of rent due to COVID-19 reduction or loss of income. But, what does this mean for tenants and borrowers? As you read this blog, keep in mind: (1) these laws do not relieve a tenant’s obligation to pay rent but, rather, they only suspend a landlord’s right to proceed with eviction; and, (2) due to the impact of the pandemic, some of these laws are sometimes updated. As a result, before relying on any law, first confirm you are looking at the latest version.

At the federal level, on March 27, 2020 the Coronavirus Aid, Relief, and Economic Securities Act (CARES Act) implemented a moratorium on eviction of certainclasses of residential properties that have a federally backed mortgage loan. This law prohibits landlords from filing new eviction actions for non-payment of rent and from charging fees (i.e., late fees) for nonpayment of rent from enactment of the law until July 27, 2020. Once the moratorium ends, landlords must give a 30-day notice before starting eviction procedures. For mortgage borrowers, the law offers up to 60 days forbearance with up to four 30-day extensions available, and lenders may not begin foreclosure proceedings any earlier than May 18, 2020.

At the state level, governors have enacted eviction moratoria by executive order. On March 27, 2020, California Governor Newson issued an executive order to establish a statewide moratorium on evictions through May 31, 2020. This law prohibits landlords from evicting tenants for nonpayment of rent, it prohibits enforcement of evictions by law enforcement or courts, and it gives local governments broad discretion in enacting substantive limitations on residential and commercial evictions.

Locally, many jurisdictions have also enacted eviction moratoria resolutions such as the March 31, 2020 resolution by the Riverside City Council establishing a 60-day moratorium on evictions due to nonpayment of both residential and commercial rent through May 31, 2020.

Lastly, on April 6, 2020, the California Judicial Council enacted eleven (11) Emergency Rules two of which protect residential and commercial tenants and borrowers by preventing courts from processing unlawful detainer and judicial foreclosure actions: Rule 1 prohibits state courts from (1) issuing a summons on an unlawful detainer complaint (eviction complaint), (2) entering a default or default judgment for restitution of premises in eviction actions (due to the tenant’s failure to appear), and, (3) from setting trial earlier than 60 days after a request for trial has been made after a defendant has appeared in the action. Rule 2 stays all judicial foreclosure actions, whether residential or commercial, and prohibits courts from taking any action in these cases unless, again, the court finds it necessary to further the public health and safety. Rule 2 also tolls the applicable statute of limitations in foreclosure action and it extends all deadlines for electing or exercising rights, such as right of redemption, under Code of Civil Procedure §§725a, et seq.

Author: Marie E. Wood

Bio: Marie E. Wood