As expected, the Coronavirus Economic Stabilization Act of 2020 (the “CARES Act” or “Act”) cleared the US Senate by a vote of 96-0 just before midnight on March 25, 2020 and the was passed by the US House of Representatives on Friday, March 27, 2020. President Trump signed the legislation into law later that day on Friday afternoon, March 27, 2020.
Notably, the CARES Act represents the most significant stimulus package in our nation’s history. However, of particular importance to landlords is Section 4024 which prohibits eviction filings for 120 days after enactment, or until July 25, 2020, for nonpayment of rent where the landlord’s mortgage on the property is insured, guaranteed, supplemented, protected or assisted in any way by HUD, Fannie Mae, Freddie Mac, the rural housing voucher program, or the Violence Against Women Act of 1994.
In other words, any residential rental property that is subject to a federally insured mortgage or participates in one of the low-income housing programs is subject to the moratorium.
Under the Act, a landlord may not make or cause to be made, any filing with the court of jurisdiction to initiate a legal action (an eviction action) to recover possession of the dwelling from the tenant for nonpayment of rent or other fees or charges; or; charge fees, penalties, or other charges to the tenant related to such nonpayment of rent.
Further, the lessor of a dwelling unit covered under the Act, may not require the tenant to vacate the 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 may not issue a notice to vacate until after the expiration of the period described in subsection (b) (July 25, 2020).
The Act does not appear to limit a landlord from issuing a notice to vacate to a tenant based on behavior or upon a violation of the lease, other than non-payment of rent.
With regard to the eviction actions referred to KSN, we ask that you please confirm that the property is not covered by a federally insured mortgage and/or that it does not participate in one of the above described low-income housing programs. If you are unsure as to the issue of being a federally insured mortgage, our law firm can obtain a title search of the property (at an extra cost) to verify that the property is not insured by a federally backed mortgage and that you may proceed with an eviction action.
If you have legal questions regarding how the CARES Act impacts your property, do not hesitate to contact KSN. Our law firm can be reached by calling 855-537-0500 or by visiting www.ksnlaw.com.
Since 1983, KSN has been a legal resource for condominium, homeowner, and townhome associations. We have four office locations, serving hundreds of clients and thousands of communities throughout Illinois, Indiana, and Wisconsin. Our attorneys are also licensed in Arizona, Florida, and Missouri.
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