As you have likely heard, the Centers for Disease Control and Prevention (the “CDC”) issued an agency order (the “Order”) attempting to halt all residential evictions due to nonpayment until December 31, 2020. Yes, the CDC is now putting their gloved hands into the residential tenancy realm, effectively attempting to materially alter the already tumultuous landscape that we are presently facing. The Order is set to be codified on September 4th, 2020. A copy of the Order is attached as Exhibit A. According to the CDC, the Order seeks to “prevent the further spread of COVID-19” by imposing a nationwide moratorium on evictions. It is important to note that the Order does not immediately require landlords to refrain from filing eviction actions due to nonpayment. Instead, the Order prevents landlord from filing nonpayment, residential evictions ONLY WHEN the tenant provides a signed declaration, which is discussed below. 

While we disagree with the CDC’s logic, reasoning, and actions taken, it is important to understand how this Order affects tenancies, and what responsive measures are required. On its surface, the Order appears to be unconstitutional, or enacted without appropriate authority. However, attempting to directly fight the enactment of the Order through legal efforts (e.g. a lawsuit against the CDC) isn’t something that most landlords would want to finance. Moreover, the likelihood that a decision would be made regarding the constitutionality of the Order within a reasonable amount of time is not good. As a result, the best remedy that we have is to arm ourselves with specific knowledge regarding the ins and outs of the Order. 

Before we go through the details regarding the Order, it is important to understand that landlords can still file eviction actions against residential tenants for nonpayment of rent. The Order creates an exception to that general rule. The exception is that no action can be taken to remove a tenant from a property if the tenant has provided the landlord a signed, written declaration in the form of Exhibit B. Reports of the CDC Order generally state that there is a national eviction moratorium. That is not entirely true. The Order creates an “opt-in” moratorium, which is limited to people who meet the specific criteria contained in the Order. It is not as far-reaching as is being reported in the news. 

Applicability 

The first question we have to answer is whether the Order applies in Florida. The Order expressly states that it “does not apply in any state, local, territorial, or tribal area with a moratorium on residential evictions that provides the same or greater level of public-health protection that the requirements listed in this Order.” It is unclear whether Florida’s current moratorium provides the “same or greater level of public-health protection” as the Order. Florida’s eviction moratorium requires tenants to demonstrate that they have suffered a “COVID-related loss” that prevents them from paying their rent. Similar to the Order, the Florida eviction moratorium requires a tenant to provide proof to the Judge that the tenant qualifies for protection under the moratorium. Just like the Order, Florida’s moratorium does not allow tenants to be removed from their homes so long as the moratorium is in effect. The Order and the Florida moratorium are different, in that Florida requires the loss of income to be “COVID-related.” Additionally, the Florida moratorium allows landlords to send demand letters, file for eviction, and receive final judgments. The Florida moratorium only requires that no “final action” be taken to remove tenants from a property while the moratorium is in effect. Whether the Florida moratorium or the Order provides more protection truly depends on the facts for each particular tenant. 

It should also be noted that the true intent of this Order was to provide a moratorium in states and cities where an active moratorium was not already in place: 

“The Federal moratorium, however, did not reach all renters. Many renters who fell outside the scope of the Federal moratorium were protected under State and local moratoria. In the absence of State and local protections, as many as 30-40 million people in America could be at risk of eviction.” 

Interpreting this paragraph above, an argument could be made that this CDC Order does not apply to Florida or any state/city that has an existing moratorium. The concerns stated in the Order are already being addressed in the State-level moratorium, therefore the CDC Order is inapplicable in the state of Florida. Unfortunately, that is only an interpretation, and does not necessarily reflect what the final decision will be regarding applicability of the Order. 

Just as the applicability of the Order in Florida is unclear, the answer as to who determines whether the Order applies in Florida is equally unclear. Is it the CDC that makes the determination regarding applicability, or is it Florida’s Governor who issued the Florida eviction moratorium? Will it be local Judges who make the decision, or will the Florida Supreme Court issue an administrative order declaring which eviction moratorium should apply? These are questions that we simply cannot answer at this stage. What we can advise is that landlords have the ability to comply with both moratoriums simultaneously, and that landlords may still conduct evictions due to nonpayment of rent. To ensure proper compliance, it is important to understand how the Order works. 

How does the Order work? 

In this newly enacted Order, the CDC made the following key declarations to take effect on September 4th: 

“Under this Order, a landlord, owner of a residential property, or other person with a legal right to pursue eviction or possessory action, shall not evict any covered person from any residential property in any jurisdiction to which this Order applies during the effective period. This Order does not apply in any State, local, territorial, or tribal area with a moratorium on residential evictions that provides the same or greater level of public-health protection than the requirements listed in this Order.”

There are a few things to unpack in this paragraph above. First, we will focus on how the CDC defines a “covered person.” A “covered person” is defined as: 

“any tenant, lessee, or resident of a residential property who provides to their landlord, the owner of the residential property, or other person with a legal right to pursue eviction or a possessory action, a declaration under penalty of perjury indicating that: 

1) The individual has used best efforts to obtain all available government assistance for rent or housing; 

2) The individual either (i) expects to earn no more than $99,000 in annual income for Calendar Year 2020 (or no more than $198,000 if filing a joint tax return),6 (ii) was not required to report any income in 2019 to the U.S. Internal Revenue Service, or (iii) received an Economic Impact Payment (stimulus check) pursuant to Section 2201 of the CARES Act; 

3) the individual is unable to pay the full rent or make a full housing payment due to substantial loss of household income, loss of compensable hours of work or wages, a lay-off, or extraordinary out-of-pocket medical expenses; 

4) the individual is using best efforts to make timely partial payments that are as close to the full payment as the individual’s circumstances may permit, taking into account other nondiscretionary expenses; and 

5) eviction would likely render the individual homeless— or force the individual to move into and live in close quarters in a new congregate or shared living setting— because the individual has no other available housing options.” 

In order to qualify as a “covered person” the tenant will have to jump through some hoops. The tenant will need to attempt to procure government assistance; the tenant will have to demonstrate that he/she is making best efforts to pay at least a portion of the rent; the tenant will have to show that he/she suffered an income loss; and the tenant will have to show that he/she would be forced into a communal living situation or homelessness if evicted. Looking at the criteria listed above, it appears to be a difficult task for a tenant to prove that they are in fact “covered” under this Order. If the tenant does not issue a declaration to the landlord, then the tenant cannot receive any protection under the Order. If a tenant signs and delivers a declaration to the landlord, it should be examined to ensure that the tenant is being truthful. The declaration is supposed to be made under penalty of perjury, and the Order provides that untruthful statements by a tenant could subject the tenant to fines, imprisonment, or both. 

In addition to “covered person” the Order defines the term “evict.” According to the Order, “evict” and “eviction” means “any action by a landlord . . . to remove or cause the removal of a covered person from a residential property.” By defining eviction this way, the Order requires that once a tenant has provided a landlord with a signed, written declaration, the landlord may not take any further action to attempt to remove the tenant. This means that once a declaration is received, the landlord would not be allowed to send a standard rent demand letter, as a rent demand letter requests either payment in full or possession of the premises. It is very important that landlords be aware of who has sent in a declaration and who has not. If a declaration is received, the landlord should immediately cease any further action with regard to the tenant, and consult with legal counsel on the next steps. 

Penalties for Violation 

There are severe civil and criminal penalties for violating the Order. The Order states that an organization that violates the Order is subject to a fine of no more than $200,000.00 per event if the violation does not result in death, or $500,000.00 per event if the violation results in death. The Order also provides penalties for individuals who violate the Order, which includes one year of jail time for each violation. 

What does this mean for evictions? 

We have arguments that we can make to a judge or any decision-maker that the CDC Order should not apply, but what does the landlord do right now to put themselves in the best position possible in the wake of this Order? Answer- get any rent-based evictions out as soon as possible. We do not know for certain the extent of the applicability of this Order, but we do know that if we wait instead of act, we may find ourselves having to overcome even more hurdles. The only time an eviction action cannot be filed is if a tenant submits a written, signed “declaration” to the landlord that complies with the language stated in the Order. A copy of the form declaration is attached hereto as Exhibit B. Once you receive a signed declaration, you should immediately provide it to your legal counsel and cease collections and eviction efforts until advised otherwise. 

If you haven’t received a declaration from a tenant, then you are free to move forward with eviction of that tenant due to nonpayment of rent. It is incumbent on the tenant to advise the landlord or the Court that the tenant is claiming entitlement to the protections of either the CDC Order or the Florida eviction moratorium. Until the tenant takes this step, the landlord may evict the tenant. It is advisable to file any nonpayment eviction actions as soon as possible, before additional restrictions are imposed and before tenants begin sharing information regarding the Order. 

The State and Federal government can continue to move the goalposts on us, but we will remain vigilant and will continue to adjust course, as necessary. If you have any questions on this memorandum, please do not hesitate to contact the attorneys at Atlas Law at 813.241.8269 or brian@atlaslaw.com

Respectfully, 

ATLAS LAW 

Understanding Contingencies

Real estate contracts usually include provisions called “contingencies.” Never heard this word before? Not to worry! Today’s blog post breaks down what contingencies are and how they work when it comes to real estate.

Contingencies are essentially provisions included in a contract that will make the whole thing null and void if certain events do or do not occur. In essence, they note that “I will fulfill my side of this agreement, contingent upon x, y, or z.” You could also think of contingencies as conditions of your contract and sometimes they’re even referred to conversationally as conditions. Buyers and sellers are each able to propose contingencies as a way to protect themselves. Contingencies can also be bargaining chips. Let’s look at some of the most common examples of contingencies found in real estate contracts.

Contingency Regarding Selling Another Property: Perhaps the buyer only wants to and is able to buy a new house if they’re able to sell they’re old house. If, for instance, their old home is under contract, they can propose a contingency that their participation in the contract for the new house is contingent upon the sale of their old house going through. If you’re thinking this doesn’t sound very appealing to the seller, you’re right! The seller does not have to accept the contingency. Whether they do will likely depend on how confident they are in their ability to get another option. They could also potentially say, “Yes, I’ll accept this contingency, but only in exchange for increasing the price by so-and-so amount.”

Contingency Regarding Appraisal or Inspection: Buyers who want to make sure the value of the property they’re buying is consistent with what they’ve been told or their personal assessment may request contingency based upon a professional appraisal. You can also request contingency based on inspection to make sure there aren’t any flaws that need to be fixed for a high price. This gives you room to negotiate for a lower price or even back out altogether if you learn the property is worth less than expected. 

Contingency Regarding Mortgage Approval: Oftentimes, real estate contracts include a contingency for approval of the buyer’s mortgage. These can be quite specific, and may clarify that the terms of the mortgage approved must be the same as the terms stated in the contract.

When it comes to contingencies, these examples really only represent the tip of the iceberg. Still, we hope it gives you some clarity on what these provisions are and how you might be able to utilize them in your real estate contact. As always, if you have questions about this or any other matter related to real estate law, the Atlas Law team is here to help. Contact us today!

How to Have a Successful Open House — Virtually!

We are all slowly adjusting to live in the wake of coronavirus. Quarantining and stay-home orders have been a difficult adjustment for the real estate world, but we’re quickly finding ways to adapt. For example, some sellers and their real estate agents are now opting to host virtual open houses. In other words, they are using online platforms such as Zoom, Skype, and FaceTime to allow potential buyers to check out properties from the safety of their own homes. First impressions matter, even when they’re virtual. Read on to discover the Atlas Law team’s tips for a successful virtual open house.

1. Don’t forego cleaning. 

Just because buyers won’t physically be there to poke around doesn’t mean you shouldn’t make sure your house is spic and span before showing it off. If a potential buyer is curious about closet space you want to be able to open the closet door to show them without worrying about piles of dirty laundry tumbling out. Clutter is a bad look for any open house. 

2. Empty house? Try virtual furniture.

For in-person open houses it’s not unusual to rent furniture if the home is empty. This makes it much easier for buyers to envision themselves living in the space. Amazingly, you can save money when hosting a virtual open house by inserting computer-generated furniture! Check out Box Brownie online for some examples (but keep in mind that this is for still images, not video).

3. Good lighting.

If you show the house in poor lighting it can make it look like you’re hiding something. Make sure the lighting throughout the house is bright and consistent.

4. Get the word out. 

An amazing virtual open house is pointless if no one sees it, so you need to get the word out. There are lots of places you can promote including Zillow, Facebook, Nextdoor, Craigslist, and even LinkedIn. Your real estate agent or attorney can help you make sure your open house is widely promoted so people will know to attend.

Finally, keep in mind that any time you are buying or selling property, it is important to have an experienced real estate attorney by your side to guide you through the legal complexities of this process. An attorney can protect your best interests and make sure that the sale or purchase is handled in accordance with state and local laws. Atlas Law is here to help with all of your real estate needs. Contact us today.