During the past few weeks, our office has been reporting on New Jersey’s restrictions on evictions during the COVID-19 pandemic. At the core of these temporary measures is Executive Order 106, which generally prohibits lockouts from taking place until two full months after the State of Emergency has ended. The State of New Jersey law does not, however, prohibit the landlord from filing eviction actions and it does not prohibit the Court from entering Judgments for Possession against tenants who cannot pay their rent. Rather, New Jersey’s Executive Order only temporarily delays the lockouts of tenants. In the meantime, many of our clients have asked us about a new Federal Law that prohibits evictions and whether it is similar to the New Jersey law. The Federal Law, titled H.R. 748 (also known as the “Cares Act”) imposes several restrictions that are seemingly more onerous than the New Jersey law; however, the Federal Law is really much more limited in the scope of the people who will be affected by it.
In the Cares Act, Section No. 4023, entitled “Forbearance of Residential Mortgage Loan Payments for Multifamily Properties with Federally Backed Loans,” the Statute reads “a multifamily borrower that receives a forbearance under this section may not, for the duration of the forbearance, evict or initiate the eviction of a tenant from a dwelling unit located in or on the applicable property solely for nonpayment of rent or other fees or charges; or charge any late fees, penalties, or other charges to a tenant…” The Statute further states that “a multifamily borrower that receives a forbearance under this section may not require a tenant to vacate a dwelling unit located in or on the applicable property before the date that is 30 days after the date on which the borrower provides the tenant with a notice to vacate and may not issue a notice to vacate… until after the expiration of the forbearance.” While Section 4023 appears, at first glance, to indicate that landlords should not charge late fees or file evictions at this time, it is important to note that Section 4023 only applies to landlords of multifamily properties with Federally backed loans, in cases where the landlord has asked for a forbearance of the loan.
Similar to Section 4023 of the Cares Act, Section 4024 of the Cares Act also generally applies to landlords of multifamily properties with Federally backed loans. However, Section 4024 contains no statement limiting its scope to just properties in which the landlord has asked for a forbearance on the loan. The text of Section 4024 further reads that “During the 120-day period beginning on the date of enactment of this Act, the lessor… may not… initiate a legal action to recover possession… from the tenant for nonpayment of rent or other fees or charges…” Put simply, under Section 4024 of the Cares Act, if you are a landlord a multifamily building and you have a Federally backed loan, you cannot file an eviction prior to July 29, 2020!