What’s the Next Step for Landlords and Evictions Restricted by the CARES Act?

HNWReal Estate, Landlord/Tenant, and Zoning

  • You may have heard that, as part of the Federal CARES Act, Congress imposed a moratorium on certain tenancy filings. This moratorium only applies to rent cases.
  • Cases involving eviction based or other types of lease or rule violations are not restrained by this Federal law and landlords can proceed as you normally would – except the New Jersey Courts are currently closed. Despite this closure, we recommend that you file what you can as soon as you can to get in line.

This Federal law prohibits landlords from filing tenancy complaints based upon nonpayment of rent if your property is a “covered property” until July 25, 2020. “Covered properties” include any property covered by the Violence Against Women Act, and that includes any property involved with any (even only one) section 8 subsidy and Tax Credit Properties.  Any property encumbered by mortgage which is “federally backed” e.g., by Fannie Mae is also a “covered property”.

CARES Act Moratorium on Residential Evictions

As we get closer to the end of the CARES Act moratorium, it is appropriate to focus on the details of the law. Here is the section of the CARES applicable to this moratorium:

“(b) MORATORIUM-During the 120-day period beginning on the date of enactment of this Act, the lessor of a covered dwelling may not,

(1)  make, or cause to be made, any filing with the court of jurisdiction to initiate a legal action to recover possession of the covered dwelling from the tenant for nonpayment of rent or other fees or charges; or

(2) charge fees, penalties, or other charges to the tenant related to such nonpayment of rent.

(c) NOTICE – The lessor of a covered dwelling unit-

(1) may not require the tenant to vacate the covered dwelling unit before the date that is 30 days after the date on which the lessor provides the tenant with a notice to vacate; and

(2) may not issue a notice to vacate under paragraph (1) until after the expiration of the period described in subsection (b).”

The 120-day time period expires on July 25, 2020.

What we have to deal with is figuring out what this new “notice to vacate” created by Congress in the CARES Act is referring to, and how we satisfy the clear requirement that it be served. First, we cannot send out the Notice to Vacate until July 25, 2020. I believe the notice should be a specially drafted “CARES Act Notice to Vacate”. We can draft it.

The problem is that legal scholars cannot agree on what this notice requirement means. Because all New Jersey landlord-tenant lawyers are accustomed to dealing with the concept of a “Notice to Quit”, timely service of which is a jurisdictional requirement which must be satisfied prior to filing a complaint, there is a debate concerning whether or not the entire 30-day Notice to Vacate period has to expire before you can file the complaint, or not. The law does not read that way. It says that you must give your tenant a 30-day notice prior to requiring them to vacate. On the face of it, and applying it to the facts regarding what actually happens with an eviction, you will not “require them to vacate” until you obtain a Warrant for Removal. Since, even under the best circumstances, it takes 4 to 5 weeks between filing a complaint and obtaining a Warrant for Removal, the logical argument can be made that you could comply with the law by simultaneously sending out the 30-day Notice to Vacate when you file your complaint. However, so many experienced landlord-tenant practitioners are concerned that tenant advocates will make the argument-and judges will accept it-that the 30-day Notice to Vacate period is a precondition to filing a lawsuit, that they are advising their clients to send out a 30-day Notice to Vacate for these “covered properties” on the first day you are permitted to do so, July 26, but they will not file the lawsuits until August 25. That is a very conservative approach.

Typically, given the fact that many tenants are already way behind, landlords would want to be more aggressive. Here however there is another consideration-if you were able to file your lawsuit in July and-assuming you receive a court date quickly (bad assumption given the backlog of cases) and you receive the court date at the end of August or even the beginning of September, the governor’s Executive Order banning lockouts is still in effect until the first week of October. Therefore, what’s the hurry? Why not employ the conservative approach and not file the lawsuit for covered properties until the end of August?

That’s my advice. Take a conservative approach. Wait the extra month. Send out the Notice to Vacate on the earliest possible date. Then, assuming your tenants haven’t paid you in response, file the eviction action as soon as possible at the end of August. If you agree with this approach, we can send out the Notice to Vacate for you.

Serving a Notice to Vacate

If you want to be more aggressive, and simultaneously file the lawsuit and send out the Notice to Vacate (which is an interpretation supported by the language of the CARES Act) then you should send out the Notice to Vacate yourself (we will still prepare the form for you). Here’s why.

If we send it out it may trigger the requirement to include in it language required by the Fair Debt Collection Practices Act which may be interpreted in such a way that we would be prohibited from filing the eviction action for an additional 30 days. Of course, if we want to avoid that, you should send the notice because when you do it the Collections Act is not triggered. That requirement is not applicable to any notices delivered to the tenant from the owner of the property, or an affiliated management company.

I believe that it should be served via certified mail, receipt requested and regular mail. The federal law doesn’t specify a means for delivery. Most Legal Services attorneys (the people you have to be concerned about in satisfying this protocol) are used to this form of service of notices because this is the New Jersey law protocol.

Therefore, those of you who have Tax Credit properties, section 8 housing vouchers, or properties affected by a “federally backed mortgage”, it is my advice that you send your delinquent accounts that you want to be made the subject of a summary dispossess action to my office on July 24, 2020 so that my staff can start the process of having the CARES Notice to Vacate prepared expeditiously.

Remember: this law prohibits you from charging any “fees, penalties or other charges” related to their rent default (i.e., no late fees). Do not include them in your Notice to Vacate or your eviction complaint request.

If you are looking for additional details on this topic or if you require advice about your situation, please contact Christopher J. Hanlon, Esq. toll-free at (855) 376-5291 or email him at chanlon@hnlawfirm.com.  Please ask us about our video conferencing or telephone consultations if you are unable to come to our office.

Written by Christopher J. Hanlon, Esq. of Hanlon Niemann & Wright

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