To: MTG Clients
From: John P. Fetner
Date: October 29, 2020
Re: North Carolina Governor Executive Order No. 171 (October 28, 2020) – Assisting North Carolinians at Risk of Eviction
On October 28, 2020, the Governor of North Carolina issued a new Executive Order (No. 171) (“Executive Order”) affecting residential evictions in North Carolina. This Executive Order increases the protections provided by the Center of Disease Control Order (“CDC Order”) issued previously, relating to evictions nationwide and puts in place new obligations on landlords. It is worth noting that hotels, motels, or other temporary guest home rentals (Airbnb for example) are not covered by the CDC Order. It is also worth noting this Executive Order does not eliminate the requirement to pay rent. All unpaid rent balances that exist at the expiration of the moratorium will be due. This Executive Order also does not speak to the permissibility of fees for failure to pay rent, including late fees.
- Executive Order is effective October 30, 2020 at 5:00 P.M.
- End date of moratorium is currently set for December 31, 2020 but could be extended based on COVID-19 numbers and any extension of the CDC’s Order.
Obligation to Provide CDC Declaration
The Executive Order requires the Landlord to provide a CDC Declaration Form (“Declaration Form”) to the tenant and a subsequent affidavit of such. The Executive Order does not specifically outline how the Declaration Form is to be provided, so arguably the lease would control. We recommend sending the Declaration Form via certified mail.
One Declaration Per Household
The Executive Order removes the requirement that every adult tenant listed on the lease must execute the Declaration Form. This Executive Order only requires one tenant to submit the Declaration Form to the landlord.
Result of Filing Declaration
If the landlord receives a Declaration Form from a tenant after the date of the Executive Order, they are required to submit the Declaration Form to the applicable court for filing within five (5) days.
Purposes for Which Eviction Actions and Writs of Possession May Proceed
If the landlord believes they are still authorized to proceed despite the filing of the Declaration Form, this Executive Order allows the landlord to submit a responsive writing identifying why the matter should proceed despite the protections of the CDC Order. A hearing will be held to determine whether the action should proceed. We anticipate a hearing will be combined with the already scheduled eviction hearing (to authorize the order for possession). Just like the CDC Order, evictions other than for non-payment of rent can continue. This Executive Order, just like the CDC Order, does not expressly identify the treatment of holdover and expired leases. As such, our firm’s position remains that holdover tenants and expired leases are not afforded such protection. We do caution proceeding with evictions when a lease is not renewed due to failure to pay rent and a completed Declaration Form is received.
The Executive Order further prohibits a landlord who receives a completed Declaration Form from submitting a writ of possession. The landlord is still authorized to submit the responsive writing identifying why they should be able to proceed. The Executive Order does not address what happens if an Order for Possession has been granted before a tenant provides a completed Declaration Form to the landlord. It is possible there could be an ex parte decision, but we anticipate a new hearing would have to be scheduled.
A violation of the Executive Order may be subject to criminal punishment of a Class 2 Misdemeanor.
- The CDC Declaration Form can be included with a Rent Demand letter, CARES Act notice, or CDC notice. Please make sure that any such letter or notice includes a reference to the inclusion of the CDC Declaration Form or if it is sent as a separate document, please include a cover letter which identifies what the Declaration Form is.
- If you receive a completed Declaration Form, notify your attorney immediately so they can counsel you on the next course of action and ensure the form is properly filed with the Court (if an action is pending).
- Make sure every case is documented and evidence is preserved in those cases where a landlord does not believe a tenant meets the criteria for protections under CDC Order, even on non- payment of rent breaches. As a reminder, the criteria for being protected under the CDC Order are summarized as follows:
- Tenant has used best efforts to obtain government assistance for housing
- Tenant is unable to pay their rent due to a substantial loss in income
- Tenant is making their best efforts to make timely partial payments of rent
- Tenant would be homeless or have to move into a shared living space if evicted
- Tenant earns $99,000.00 or less (joint filers $198,000.00) or received a stimulus check or was not required to report income in 2019.