Updated Eviction Moratoriums & The Potential Impact On Real Estate & Foreclosures In Colorado, U.S.
On January 21, 2021, President Biden issued an Executive Order asking the Centers For Disease Control (CDC) to extend their eviction moratorium. The CDC then extended their eviction moratorium, which previously expired on January 31, 2021. Prior, the CDC Order expired December 31, 2020 but was extended until January 31st, 2021 via the Consolidated Appropriations Act, 2021 (CAA), signed into law by former President Trump on December 27, 2020.
According to the CDC Order, which the CDC extended to March 31, 2021, "The Order temporarily halts residential evictions of covered persons for nonpayment of rent…This means that a landlord, owner of a residential property, or other person with a legal right to pursue an eviction or a possessory action cannot evict for nonpayment of rent any covered person from any residential property in any U.S. state or U.S. territory where the Order applies."
The CDC states, " ‘Eviction’ means any action by a landlord, owner of a residential property, or other person with a legal right to pursue eviction or a possessory action, to remove or cause the removal of a covered person from a residential property. Eviction does not include foreclosure on a home mortgage."
The CDC Order gives deference to state and local laws: “State and local laws with respect to tenant-landlord relations vary, as do the eviction processes used to implement those laws. The judicial process will be carried out according to state and local laws and rules.”
The CDC Order emphasizes that tenants under the Order still owe rent to their landlords: “The Order halts residential evictions only temporarily. Covered persons still must fulfill their obligation to pay rent and follow all the other terms of their lease and rules of the place where they live. Covered persons must use best efforts to make timely partial payments that are as close to the full payment as their individual circumstances permit, considering other nondiscretionary expenses. When the Order expires, consistent with the applicable landlord-tenant or real-property laws, a covered person will owe their landlord any unpaid rent and any fees, penalties, or interest as a result of their failure to pay rent or make a timely housing payment during the period of the Order.”
For a tenant to claim eviction protection under the CDC Order, the following conditions must all be met:
Covered Persons: “A ‘covered person’ is any tenant, lessee, or resident of a residential property
that 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 that:
(a)The individual has used best efforts to obtain all available government assistance for rent or housing;
(b)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),
(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;
(c)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;
(d)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
(e)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.
4. The action must be an eviction action based on non-payment of rent.
Tenants must be cautious that "all declarations, regardless of the form used, must be signed, and must include a statement that the covered person understands that they could be liable for perjury for any false or misleading statements or omissions in the declaration. "
That is, if tenants provide any false statements or information on their declaration and submit it to the court, they could, under the CDC Order, be liable for perjury, which could include federal and/or state claims of perjury. Further, tenants may be opening themselves up to further federal and/or state civil claims, not covered under the CDC Order, if they provide false or misleading statements on a sworn statement submitted to court. Statements submitted to court are subject to cross-examination and further judicial scrutiny.
It is best to consult with an attorney if you have any questions or concerns regarding submitting a sworn statement to the court. Most states have free attorney services if you are unable to hire an attorney. In Colorado, you can find free or reduced attorney services at Colorado Legal Services.
It is important to note that the CDC very clearly states that its Order does NOT apply to evictions other than those for non-payment of rent. That is, the CDC clearly outlines limited exceptions to its Order where evictions are allowed. The CDC Order states evictions ARE allowed in the following circumstances:
1. Evictions for reasons other than non-payment of rent;
2. Evictions for “engaging in criminal activity while on premises;”
3. Evictions for “threatening the health or safety of other residents;”
4. Evictions for “damaging or posing an immediate and significant risk of damage to property;”
5. Evictions for “violating any applicable building code, health ordinance, or similar regulation relating to health and safety;”
6. Evictions for “violating any other contractual obligation of a tenant’s lease, other than the timely payment of rent or similar housing-related payment (including nonpayment or late payment of any fees, penalties, or interest);”
7. Evictions in hotel rooms, motel rooms or guest houses rented to a temporary guest or seasonal tenant as defined by state, territorial, tribunal or local law.
In addition to the above exceptions to evictions, per the CDC Order, the CDC Order does NOT apply to the following circumstances:
1. Foreclosures: According to the CDC, “Eviction does not include foreclosure on a home mortgage.”
2. Starting eviction proceedings: "Nor is it intended to prevent landlords from starting eviction proceedings."
Unfortunately, eviction moratoriums may not be the best way to protect both the landlord and the tenant. The moratoriums will only lead to a foreclosure glut that will harm the landlords and most certainly result in an eviction of the tenant post foreclosure. A moratorium has good intentions, however, it has serious flaws and with great consequences.
Most landlords do not have the ability to survive a year without rental income while large investors do. A moratorium places great pressure on the average landlords. Certainly, renters need to be protected. But so do average landlords. Many landlords are elderly people who used their retirement money to buy homes and use rental income as a means to live, small business owners that also lost their business during COVID shutdowns, or middle-class Americans who scraped enough money together to qualify for a loan to buy another home to generate a little bit more income from rental proceeds.
Now these people are being drained of their ability to pay their mortgages and housing costs. Currently there is no assistance for them, or they have been offered forbearance agreements by their lenders which only create more financial hardships as those missed payments are often due in full at the end of a short forbearance period.
Sometimes, tenants have done damage to the property beyond the cost of their security deposit- and that does not include the year of missed payments. Sure, the tenant is responsible for those missed payments, but if the tenant does not have a job, then a judgment for nonpayment of rent is uncollectable.
The major issue is that both renters and landlords are suffering right now. We can not ignore both sides. To do so will very likely result in both evictions for tenants and foreclosures on landlords in the long run, only to the benefit of the largest investors.
Further, in the future, large investors are able to force and hold onto higher rents and have the strongarm, capital and lobbyists able to write favorable eviction laws. Using property management firms, large investment firms never see the tenant and have no problem evicting a person they have never met and do not have to deal with personally. Local landlords usually have relationships with their tenants and are often much more willing to work with their tenants on issues such as delayed or missed payments. Often, local landlords would rather their tenants stay, than deal with the hassle of evicting, cleaning and re-renting. To support local landlords now is to support the future of renters.
There are better ways to help suffering Americans than eviction moratoriums, such as Federal aid that covers full rent payment. This will allow renters to pay their landlords and have continued housing security, while also allowing the landlords to pay their mortgages. Thus, we all have continued economic and housing stability.
Otherwise, I fear another foreclosure crisis. Only this time, landlords will be losing their homes en masse and renters will be evicted en masse.
If you need free or reduced legal services in Colorado, please visit Colorado Legal Services.
If you need rental or mortgage assistance in Colorado, you may be eligible for short-term rental or mortgage assistance via Colorado's Emergency Housing Assistance Program (EHAP). Eligibility and qualifications for assistance vary depending on the agency used for assistance.
Landlord and property owners may be eligible for assistance in Colorado through Colorado's Property Owner Preservation (POP) Program. Maximum rent caps vary by county and number of bedrooms. Guidelines can be found here. Qualifications for the program include:
Landlords/Property owners must be applying on behalf of their tenants only;
The property must not be in foreclosure;
All state and local real estate / property taxes must be current.
The U.S. Department of Housing and Urban Development, or HUD, offers guidance on rental assistance, including state options and private options, on its website.
Otherwise, if you are a landlord or a tenant and need legal assistance regarding an eviction or foreclosure in Colorado, contact the attorneys at Gantenbein Law Firm. Located in Denver, Gantenbein Law Firm serves clients throughout all of Colorado.
Gantenbein Law Firm is an award-winning law firm and is highly experienced in representing clients in all stages of foreclosure and evictions. Gantenbein Law Firm opened its doors during the Great Recession, representing clients during foreclosure defense and eviction matters. Long an advocate for equality under the law, Keith Gantenbein, owner of Gantenbein Law Firm, become known nationwide for speaking out against one-sided bank practices and for advocating for a more just and fair system for homeowners. Keith Gantenbein has been instrumental in writing and passing numerous Legislative Bills, Colorado State Court Rules, and working with Colorado Supreme Court rule-making committees to amend court rules to make them more accessible and fair to all parties involved in foreclosure and eviction matters or issues.
Since that time, Gantenbein Law Firm has gone on to win numerous awards and, in addition to Real Estate Law, to expand its practice areas to advocate for clients in the following areas of law: Tax Law; Business Law; Probate Law; Estate Planning; Wills & Trusts; Civil Litigation; Credit Disputes. To schedule a consultation regarding your case, visit www.gantenbeinlaw.com, or call 303-618-2122.