Updated: September 2020
COVID-19 has everyone concerned about their health and safety. Every day brings new questions, laws, regulations and uneasiness as we collectively face the uncertainty of how quickly the virus will spread or if we have done our part to contain it.
The federal government and state of Arizona have each enacted new laws which affect a landlord’s ability to evict tenants. The federal government enacted the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the state of Arizona issued an Executive Order (Order). The CARES Act is more broad than the Order and trumps state law.
Below, you will find more information about the Order and CARES Act.
UPDATE September 2020: On September 1, 2020, the Centers for Disease Control and Prevention (CDC) issued an eviction moratorium for nonpayment of rent for certain renters until the end of the year. The order is effective beginning Friday, September 4, 2020 and ends December 31, 2020. See the CDC order here.
The order does not affect state and local eviction moratoriums that are already in place that meet or exceed the same level of protection as that in the CDC order.
According to the CDC order, tenants must meet the following requirements:
Every adult tenant listed on the lease, rental agreement, or housing contract must provide a declaration to their landlord certifying under penalty of perjury the following:
I have used best efforts to obtain all available government assistance for rent or housing;
I either expect 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), was not required to report any income in 2019 to the U.S. Internal Revenue Service, or received an Economic Impact Payment (stimulus check) pursuant to Section 2201 of the CARES Act;
I am unable to pay my full rent or make a full housing payment due to substantial loss of household income, loss of compensable hours of work or wages, lay-offs, or extraordinary out-of-pocket medical expenses;
I am 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;
If evicted I would likely become homeless, need to move into a homeless shelter, or need to move into a new residence shared by other people who live in close quarters because I have no other available housing options.
I understand that I must still pay rent or make a housing payment, and comply with other obligations that I may have under my tenancy, lease agreement, or similar contract. I further understand that fees, penalties, or interest for not paying rent or making a housing payment on time as required by my tenancy, lease agreement, or similar contract may still be charged or collected.
I further understand that at the end of this temporary halt on evictions on December 31, 2020, my housing provider may require payment in full for all payments not made prior to and during the temporary halt and failure to pay may make me subject to eviction pursuant to State and local laws.
UPDATE July 2020: On July 16, 2020, Governor Ducey issued Executive Order 2020-49 continuing the postponement of eviction enforcement actions. The order takes effect on July 23, 2020 and expires on October 31, 2020.
While the Order does not cover every scenario, below are some questions and answers for tenants, landlords and property managers based on what we know to date. Updates to this article will occur as we receive further guidance.
On March 24, 2020, Governor Ducey issued Executive Order 2020-14 (Order) delaying residential evictions for those affected by COVID-19. The Order is in effect for 120 days and applies to renters who are quarantined or faced with economic hardship as a result of COVID-19.
Q. Does the Order apply to all tenants?
A. No. The Order only applies to those tenants under the following circumstances:
(1) the tenant is required to be quarantined based on their diagnosis of COVID-19;
(2) the tenant is ordered by a licensed medical professional to self-quarantine based on their demonstration of symptoms as defined by the Centers for Disease Control and Prevention (CDC);
(3) the tenant is required to be quarantined based on someone in the home being diagnosed with COVID-19;
(4) the tenant has a health condition, as defined by the CDC, that makes them more at risk for COVID-19 than the average person;
(5) the tenant suffered a substantial loss of income resulting from COVID-19, including:
a. job loss;
b. reduction in compensation;
c. closure of place of employment;
d. obligation to be absent from work to care for a home-bound school-age child; or
e. other pertinent circumstances.
Q. What are “other pertinent circumstances?”
A. The answer is unclear but based on the Order, there must be a substantial loss of income due to COVID-19.
Q. How do I notify my landlord that I meet one of the qualifications listed in the Order?
A. You must notify the property manager/landlord in writing and supply documentation of your temporary financial hardship or state of quarantine due to COVID-19. You must also acknowledge that the contractual terms of the lease remain in effect.
Q. What type of documentation should I supply to my landlord/property manager?
A. An order from a licensed medical professional for you or the person that is quarantined or proof establishing that you have suffered a substantial loss of income resulting from COVID-19.
Q. Does the Order invalidate my lease if I meet a qualification in the Order?
A. No. You must continue to abide by all terms contained in the lease.
Q. I meet one of the qualifications (quarantine or substantial loss of income) listed in the Order but I still received an eviction notice. Will I be evicted?
A. No. However, at this time, it is unclear whether you will receive 120 days before the eviction is enforced or whether the eviction can be enforced after a quarantine is completed. This question will be updated once we receive further clarification from the Governor’s office.
Q. Does Arizona have any programs that offer assistance to renters facing eviction?
A. On March 27, 2020, Governor Ducey announced $5 million in new funding to help Arizonans struggling to make rent due to COVID-19. The money will be included as part of a Rental Eviction Prevention Assistance Program offered by the Arizona Department of Housing. For more information see https://housing.az.gov/general-public/eviction-prevention-assistance.
Q. Is the Order applicable to commercial tenants?
A. No. The Order specifically identifies “eviction orders for residential premises.”
Q. Is there a national precedent for the Governor’s Order?
A. Yes. The U.S. Department of Housing and Urban Development has suspended evictions for HUD-financial properties. Additionally, the Federal Housing Finance Agency has directed Fannie Mae and Freddie Mac, which purchase mortgages from lenders, to suspend foreclosures and evictions for at least 60 days to the COVID-19 national emergency.
Q. Does the Order prevent me from filing an eviction notice?
A. No. The Order does not stop evictions from being filed and therefore courts must accept those case filings, then set and hold hearings. However, if the tenant can show they meet a qualification under the order, the judgement cannot be enforced and must be delayed. See Maricopa County Justice Courts.
Q. If the tenant does not meet a qualification in the Order, can I evict them?
A. Yes. While residential evictions in Arizona are fairly expeditious, courts may experience some delays due to COVID-19. Eviction cases may be set for hearings by telephone, in person with social distancing considerations, or at a date later than usual. See Maricopa County Justice Courts.
Q. If the tenant meets a qualification in the Order, are there any exceptions which would allow a tenant to be evicted?
A. Yes. A court could determine on a party’s motion that enforcement is necessary in the interest of justice or is in accordance with A.R.S. §33-1368(A).
Q. If a tenant contacts me and states they are not able to pay rent, how should I proceed?
A. You may ask the tenant for documentation showing: (1) they have incurred a financial hardship due to COVID-19; (2) a licensed health care provider’s diagnosis of COVID-19; or (3) a licensed health care provider’s order to self-quarantine the tenant or another authorized occupant living in the home.
Q. If I collect partial rent, will that prohibit me from pursuing a future eviction action?
A. The Arizona REALTORS Residential Lease Agreement at lines 54-56 states that “The acceptance by Landlord of any late or partial payment shall not change the date or amount of any required payments in the future and shall not relieve Tenant of any obligation to pay the balance of the Rent and any applicable late fees or costs.”
Q. What should I do if I need rent to make the mortgage payment but my tenant is not paying rent or I am experiencing my own financial difficulties?
A. We suggest contacting your lender/mortgage servicer. Many lenders have begun working with borrowers to accommodate financial hardship by deferring payments or issuing a forbearance on foreclosures. See also https://housing.az.gov/mortgage-help-homeowners-impacted-coronavirus.
Q. Does Arizona offer any programs to assist landlords with mortgage payments?
A. The Arizona Department of Housing offers assistance to Arizonans struggling to make mortgage payments. Through the Department’s “Save Our Home AZ” (SOHAZ) program, Arizonans may qualify for: (1) principal reduction assistance; (2) monthly mortgage subsidy assistance for under and unemployed Arizonans; and (3) second lien elimination assistance. See https://housing.az.gov/save-our-home.
Q. Is the federal government providing any assistance to homeowners impacted by COVID-19?
A. Yes. Fannie Mae, Freddie Mac (the Enterprises) and the Federal Home Loan Banks are taking steps to help people who have been impacted by the coronavirus. For more information see https://www.fhfa.gov/Homeownersbuyer/MortgageAssistance/Pages/Coronavirus-Assistance-Information.aspx.
Shortly after the Order was implemented, the federal government passed the CARES Act. Included in the CARES Act were several provisions that prevent the eviction of residential tenants of certain real property secured by Federally backed mortgage loans under several federal programs for a 120-day period (Moratorium). The Moratorium began March 27, 2020 and will end July 25, 2020.
UPDATE August 2020: The Federal Housing Financing Agency directed Fannie Mae and Freddie Mac to to extend the moratoria on single-family foreclosures and real estate owned (REO) evictions until at least Dec. 31, 2020. The foreclosure moratorium applies to GSE-backed, single-family mortgages only.
UPDATE June 2020: The Federal Housing Financing Agency extended the national moratorium an additional two months for Fannie Mae and Freddie Mac loans. As such, foreclosures and evictions on single family homes backed by Fannie Mae and Freddie Mac loans are halted until August 31, 2020.
Key provisions are:
- The landlord of a “covered dwelling” cannot: (A) make, or cause to be made, any filing to initiate a legal action to recover possession of the covered dwelling from the tenant for nonpayment of rent; and (B) impose any fees, penalties or other charges on a tenant for late payment of rent.
- During the Moratorium, the landlord of a covered dwelling cannot: (A) require a tenant to vacate a dwelling unit located in the applicable property before the date that is 30 days after the date the tenant is provided a notice to vacate; and (B) issue a notice to vacate until after the expiration of the Moratorium.
Q. Does Federal law trump State law?
A. Yes. Because Federal law trumps State law, that means if the property is covered under the CARES Act, the landlord may not initiate legal action to evict the tenant for nonpayment of rent. The landlord may also not charge the tenant for late fees, penalties, etc.
Q. How do I know if the property has a federally backed mortgage?
A. You can call your mortgage servicer and ask. You can also find a list of federal agencies and entities at https://www.consumerfinance.gov/about-us/blog/guide-coronavirus-mortgage-relief-options/
This article is of a general nature and reflects only the information at the time it was drafted. It is not intended as definitive legal advice, and you should not act upon it without seeking independent legal counsel.