Who CARES? - Status on the Coronavirus Aid, Relief, and Economic Security (CARES) Act

By Atty. Gary Koch of Petrie + Pettit S.C.

The Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020, bringing many new wrinkles to the residential real estate rental practice. While several of its provisions have expired, specifically those regarding eviction moratoria, one particular provision lingers without an apparent sunset. Section 4024(c)(1) of the CARES Act requires that “[t]he lessor of a covered dwelling unit may not require the tenant to vacate the covered dwelling unit before the date that is 30 days after the date on which the lessor provides the tenant with a notice to vacate.” A recent interim rule promulgated by HUD, effective as of November 8, 2021, reiterates the 30-day notice requirement, and adds additional language necessary for notices terminating tenancy for many covered entities.

This raises two obvious questions: is my rental unit a covered dwelling unit; and what happens if I don’t comply with the CARES Act – eviction is a state court remedy, after all.

Whether or not a property is a covered dwelling unit is an easy question to answer since the CARES Act (and the subsequent interim rule) defines “covered dwelling unit”. While the definition is cumbersome, it essentially boils down to whether there’s government funding or backing of the unit.

The penalties for non-compliance with the CARES Act are less easily defined. There’s no penalty provision in the Act itself. First, though, any eviction filed without providing the necessary time frame would likely be dismissed, as the notice terminating tenancy would be found to be invalid. Additionally, the Bureau of Consumer Financial Protection (CFPB) is tasked with enforcing the CARES Act with respect to evictions. In July, 2021, the CFPB issued an Enforcement Compliance Bulletin and Policy Guidance, stating “Bureau staff will be monitoring and investigating eviction practices to ensure that they are complying with the law. Evicting tenants in violation of the CDC Order, State, or local moratoria, or evicting or threatening to evict them without apprising them of their legal rights under such moratoria, may violate prohibitions against deceptive and unfair practices under the Fair Debt Collection Practices Act and the Federal Trade Commission Act.” So, at a minimum, a faulty notice could be grounds for a dismissal of the eviction, and, at worst, investigation and sanction by the CFBP.