Update of the State Eviction Moratorium and CARES Act Protections
On October 14, 2020, Governor Inslee issued Proclamation 20-19.4 that extended and revised the scope of the state-wide eviction moratorium contained in Proclamations 20-19, 20-19.1, 20-19.2 and 20-19.3. The moratorium had been set to expire on October 15, 2020. The following is a summary of the provisions of the moratorium as now contained in Proclamation 20-19.4. You can find the proclamation here.
The proclamation as revised:
- Extends the current residential eviction prohibition through December 31, 2020.
- Prohibits residential evictions for ANY reason – not just for failure to pay rent – including holdover tenancies. Note: In this way, it is similar to the City of Seattle’s eviction moratorium (that also runs through the end of 2020).
- Contains a specific exception for terminating a lease and/or evicting residents – as allowed by the lease and existing law – in order to allow the landlord or property owner to occupy the dwelling or sell it. 60-days’ notice is required prior to the vacation date and the notice must be in the form of an affidavit.
- Contains a general exception for terminating a lease and/or evicting residents if doing so is necessary to prevent a resident from endangering the health, safety, or property of others – but not if the threat is due to the resident’s disability or health condition or is the result of the resident following social distancing/quarantine guidelines. Note: This is also similar to the exception in Seattle’s eviction moratorium.
- Specifies that law enforcement is not to serve or otherwise act on eviction orders, unless a finding of an above-described exception is included in the order.
- Prohibits the charging of rent, interest or late fees if a resident is unable to access the premises because of the COVID-19 outbreak.
- Prohibits the charging of interest or late fees to all other residents who fail to pay rent when due.
- Prohibits actions to collect unpaid rent and charges from residents that have accrued because of the COVID-19 outbreak, unless the landlord or property owner has offered a “reasonable” payment plan (determined by considering the resident’s particular circumstances) and the resident refused the offer or accepted it and failed to comply with the plan.
- Prohibits landlords and property owners from increasing rents during the duration of the proclamation. The proclamation also adds exceptions for mobile home parks and if the increase is provided for in a lease, but the increase can’t take effect until the proclamation expires. This prohibition includes commercial leases if the commercial tenant has been “materially impacted” by COVID-19 either personally or due to a forced closure or loss of business.
- Encourages tenants to pay what they can to support landlords.
- Landlords and tenants are expected to communicate in good faith with one another, and to work together, on the timing and terms of payment and repayment and are encouraged to avail themselves of the services offered at existing dispute resolution centers to come to agreement on payment and repayment solutions.
CARES Act Forbearance and Eviction and Foreclosure Protection Provisions. (See update below)
Moratoria similar to the eviction moratorium of Proclamation 20-19.4 are found in the federal CARES Act. The CARES Act is comprised of various programs intended to provide relief from the economic impacts of COVID-19 pandemic. The following is a summary of moratoria and other programs contained in the CARES Act regarding foreclosure and eviction prohibitions:
Forbearance and moratorium on foreclosures (forbearance) of payment on “federally-backed,” single-family loans.
- Initiation of or proceeding with a foreclosure action was prohibited for 60 days (from March 27, 2020).
- In addition, a borrower may request forbearance of mortgage payments, by:
- Applying to loan servicer, and
- Affirming it is experiencing financial hardship due to the COVID-19 pandemic
- Forbearance must be granted for 180 days and the borrower shall have an option to extend for another 180 days. There shall be no accrual of interest or fees during forbearance, but the payments remain the obligation of the borrower.
- “Federally backed” mortgage loans include those that are:
- Insured and/or guaranteed by FHA, the VA or other federal agencies;
- Made by the Department of Agriculture; or
- Purchased by Freddie Mac or Fannie Mae
- A forbearance can be requested until the Federal COVID-19 Emergency declaration is terminated or December 31, 2020, whichever is sooner.
Forbearance of multifamily mortgage loan payments and eviction protection.
- Applies to “federally backed” multifamily mortgage loans
- Borrower must submit a request to the loan servicer and document financial hardship – not just attest to hardship
- Forbearance is for only 30 days with up to two extensions of 30 days at the borrower’s request
- Borrower cannot evict or initiate eviction of tenants in the subject property or charge such tenants late fees/fines for failure to pay rent during forbearance period
- Borrower cannot issue notices to vacate to tenants of the subject property during forbearance period
- “Federally backed” multifamily mortgage loans include those that are:
- Made, insured and/or guaranteed by HUD or other federal agencies; or
- Purchased by Freddie Mac or Fannie Mae
- A request for forbearance must be submitted before the Federal COVID-19 Emergency declaration is terminated or December 31, 2020, whichever is sooner
Residential Eviction Moratorium.
- Prohibits eviction or initiation of eviction or the charging of late fees/fines for failure to pay rent
- Landlords may not issue notices to vacate during the moratorium
- In effect for 120 days from the enactments of the CARES Act (March 27, 2020)
- Applies to federally backed mortgages
- See definition in the description of the multifamily mortgage loan forbearance
- Also includes properties participating in the Violence Against Women housing program and rural housing voucher program.
- Federally backed home loans constitute the majority of such loans regardless of the company servicing your loan, i.e. to whom you send payments. Therefore, it would be worthwhile for you to determine if your particular mortgage falls under this category.
Please note that under all of these moratoria, tenants and borrowers remain obligated to pay any rent or make any mortgage payments that come due while the moratoria are in place. Therefore, even if a program does not require or encourage one, it is in your best interest to begin discussing with your landlord or lender a repayment plan that would be put in place once the moratoria are lifted. Waiting until the applicable moratorium has expired before committing to a repayment plan is advised since you may not know the full amount you owe until then. Not only will the amount you owe in back rent or mortgage payments depend on the duration of the emergency and changes to your employment status over the course of the emergency, but rent/mortgage support programs may be instituted in the meantime that would reduce the amount due during the COVID-19 crisis or legislation may dictate the terms of prepayment plans.
October 2020 Update
The standalone eviction and foreclosure protections of the CARES Act have expired. However, they have been extended or replaced, in effect, by the actions of several federal government agencies. Also, the forbearance programs under the CARES Act (i.e. requesting a period of time in which one is not required to make mortgage payments) continue through the end of the year and eviction protections under the forbearance programs remain in effect. Here are the new agency orders providing relief from evictions and foreclosures:
The CDC has issued an eviction moratorium for those who are unable to pay rent. However, eligibility criteria differ for protection under the CDC’s order than the CARES Act. Please see a description of the CDC’s order here.
HUD has extended the foreclosure moratorium to single-family homes FHA-insured mortgages until the end of 2020. Furthermore, tenants in homes subject to FHA-insured mortgages may not be evicted through the end of 2020. The moratoriums cover 8.1 million single-family homes. In addition to the moratoriums, HUD offers programs to keep people in their homes after the foreclosure moratorium or forbearance ends, including allowing payment of the accumulated payments to become a lien and be paid upon the sale of the home. Please see HUD’s website for more information about these programs
Fannie Mae and Freddie Mac also extended the foreclosure moratorium on single-family homes with mortgages backed by these entities. 28 million homes fall into this category. In addition, eviction will not be allowed from homes that had previously been foreclosed by the entities. As noted above, homeowners with Fannie Mae and Freddie Mac-backed mortgages remain eligible for relief under the forbearance program.
Please contact us if you have any questions about the application of these moratoria