While the rate of COVID-19 infections continues to steadily increase in Ohio and the United States, lawmakers struggle with who should be bear the brunt of the economic penalties, which result when a large portion of our population is unable to pay its rent. While many tenants are out of work or sick, many of the landlords, especially smaller real estate investors, are not in a much better place financially.
On September 4, 2020, the Center for Disease Control (“CDC”) issued an order prohibiting residential landlords from evicting tenants for unpaid rent.[1] In turn, the Ohio Supreme Court issued a statement, which affords residential tenants protection from eviction by filing a “Declaration Form.”[2] The CDC order expires on December 31, 2020, which is fast approaching.
The Ohio legislature is now looking at how evictions should be handled while COVID-19 is still pervasive. In March 2020, Representatives Leland and Crossman introduced House Bill 562, which proposes a statewide moratorium on foreclosures and evictions for both residential and commercial properties.[3] Under this Bill, while landlords would be allowed to file eviction complaints, the courts could not adjudicate or effectuate evictions while Ohio remains in a State of Emergency.[4] The Bill likewise prohibits courts from adjudicating and effectuating foreclosure actions.[5] House Bill 562 has been in committee since May 2020, although it may be garnering support because of the impending deadline.[6]
The Bill is a radical expansion of the CDC order because it encompasses commercial property and foreclosures. The sponsors of House Bill 562 argue that the impact of COVID-19 on individuals is more substantial in terms of job loss and increased medical expenses. They argue it is more difficult for tenants to pay their rent; whereas, property owners and banks are better able to bear the risk of missing payments. Under the CDC order and the Bill, a tenant’s rent is not forgiven and he or she will ultimately be responsible for paying it. The counter-argument is that many rental properties are owned by smaller real estate investors with thin profit margins, who cannot bear the loss of several months’ rent without themselves suffering serious financial ramifications.
While the legislature grapples how to address the concerns of those involved, in Northeast Ohio at least one lawsuit has been filed by landlords, who are unable to evict tenants for non-payment of rent under the CDC’s order.[7] The complaint, which was filed by the Pacific Legal Foundation and the 1851 Center for Constitutional Law, alleges that the CDC was not authorized to issue a nationwide moratorium on evictions, the CDC is making law, which is reserved for Congress by the Constitution, and by doing so, the CDC ignored rule making policy.[8] Plaintiffs request a judgment declaring the moratorium unlawful and/or unconstitutional, a preliminary injunction setting aside the CDC eviction moratorium, and forbidding Defendants from enforcing, as well as an award of attorneys’ fees.[9] As of the publishing of this blog, the court has not made any rulings in that case.[10]
Stay tuned to see whether the moratorium is extended, expanded or dissolved.
[1] The CDC’s order can be found at: https://www.federalregister.gov/documents/2020/09/04/2020-19654/temporary-halt-in-residential-evictions-to-prevent-the-further-spread-of-covid-19#footnote-5-p55293
[2] The Ohio Supreme Court’s statement can be found at: https://www.supremecourt.ohio.gov/coronavirus/resources/cdcEvictions.pdf The Declaration Form must state that the tenant used her best efforts to obtain government assistance for rent/housing, that she was within certain income limits, that she cannot make full rent payments due to loss of income, or increased medical expenses, she used her best efforts to make full rent payments, and that eviction would likely make her homeless or force her to move into a new congregate or shared setting.
[3] https://www.legislature.ohio.gov/legislation/legislation-summary?id=GA133-HB-562
[4] Id.
[5] Id.
[6] See Lawmakers seek Ohio moratorium on evictions, foreclosures, which can be found at: https://ohiocapitaljournal.com/2020/12/04/lawmakers-seek-ohio-moratorium-on-evictions-foreclosures/
[7] A link to the docket for Skyworks, Ltd., et al. v. Centers for Disease Control and Prevention, et al. can be found at: https://pacificlegal.org/case/skyworks-ltd-v-centers-for-disease-control/
[8] Id.
[9] Id.
[10] Id.
