CARES Act 30-Day Notice to Vacate Refresher
President Trump signed the CARES Act on March 27, 2020, just days after it was passed by Congress. The legislation included a section titled, “Temporary moratorium on eviction filings.” The CARES Act eviction moratorium statute (eviction moratorium) included three subsections.
- “The definitions” (Section 9058(a)), included several terms and provided that the law applied to any “dwelling” located upon a “covered property.” It defined a “covered property” to include all properties that participate in federal housing programs, along with all properties that had a federally backed mortgage loan, including those on the secondary market.
- “The moratorium provision” (Section 9058(b)), described the moratorium period as being 120 days beginning on March 27, 2020, noting that during this period, housing providers could not initiate any eviction proceedings or charge any fees or penalties related to the nonpayment of rent.
- “The notice provision” (Section 9058(c)(1)), described the 30-day notice, stating that applicable properties “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.”
- “The expiration provision” (Section 9058(c)(2)), stated that housing providers may not issue a notice to vacate until after the expiration of the moratorium provision.
Notably, the notice provision, did not include any sunset date. Future COVID relief packages passed by Congress left this language intact.
Case Background
The Iowa Supreme Court heard combined oral arguments for two separate cases: MIMGCLXXII Retreat on 6th, LLC v. Mackenzie Miller and Parties in Possession (“Miller”) and MIMGCLXXII Retreat on 6th, LLC v. Nathan Williams and Parties in Possession (“Williams”). These cases, following substantially similar factual storylines, arose when the Plaintiff housing provider (“the Retreat”) appealed a district court decision in Linn County District Court affirming the dismissal of its eviction actions against residents Mackenzie Miller and Nathan Williams for failing to provide a CARES Act 30-day notice to vacate. Both actions were initiated by the Retreat because of unpaid rent. The Retreat filed discretionary appeals with the Iowa Supreme Court, which were granted. Because Miller and Williams failed to appear at any of the hearings or make an appearance in their cases, the Iowa Supreme Court invited Iowa Legal Aid to argue in support of the lower court judgments. As these cases involved the same issue, the Iowa Supreme Court only published a full opinion under Miller.
Ruling
The Iowa Supreme Court decision, supported by all seven justices, began by analyzing whether the eviction moratorium should be read as an integrated whole. According to the Court, this was an “either/or proposition,” that they are either read together, or they are not. In concluding the eviction moratorium is intertwined, the Court reasoned that if the notice provision is not integrated with the rest of the law, “the statute just wouldn’t work.” The Court opined that if all three subsections of the eviction moratorium are read in isolation, the notice provision would apply “to any ground for eviction at any time.”
The Court laid out several scenarios to support its rationale that reading each subsection in isolation “makes no sense at all” and “would lead to absurd results.” Under a solitary reading of the eviction moratorium, the Court argued that “no notice to evict for a covered property for any reason could go out during the COVID-19 moratorium.” The Court noted that under this reading, during the eviction moratorium, a housing provider would have filed an eviction action against a resident for a reason unrelated to the nonpayment of rent, but they could not have given the eviction notice, a prerequisite to initiating an eviction action under the notice and the expiration provisions. Furthermore, the Court noted that this would mean that a 30-day notice would be required even if there is a housing resident engaged in criminal activity or a safety hazard existed on the premises. The Court cited several U.S. Supreme Court (SCOTUS) cases for the proposition that statutes should be interpreted as symmetrical, coherent and consistent, to the extent possible.
In support of its view that the subsections should be read as intertwined, the Court noted two further points. First, it noted that the statute used the terms “the lessor” and “the tenant” in the notice provision, after referring to “the lessor” and “the tenant” in the moratorium provision, suggesting it is the same lessor and tenant who are affected by the statute. The Court opined that if Congress meant for the notice provision to apply perpetually long after the moratorium, Congress would have used “a landlord” and “a tenant.” Second, the Court found the expiration provision specifically refers to the moratorium provision, and that the moratorium provision “is also tethered to subsection (c)(1) [the notice provision] by the heading ‘notice’ and the word ‘and’ indicating that the two subsections are related.” The Court reasoned that it would be illogical and incongruous to have a provision that is unrelated to the moratorium (the notice provision) “sandwiched inside three provisions clearly related to the moratorium.”
While the Court did note that several SCOTUS cases stood for the general position that particular language used in one section but omitted in another was deliberate, the Court reasoned that the lack of any expiration period described in the moratorium provision “actually makes sense when you think about it.” The Court concluded that the omission actually “means that subsection (c)(1) [the notice provision] is limited to defaults arising during the moratorium period.” The Court reasoned that simply repeating or incorporating the language in the moratorium provision couldn’t work because it “would not have been the appropriate time qualification to use.”
Next, the Court noted that there is a litany of SCOTUS precedent for borrowing from adjacent provisions to qualify a seemingly unqualified provision. The Court held that SCOTUS frequently found that a facially unqualified provision of law is subject to the same qualifications as nearby, related positions. The Court discussed several analogous SCOTUS cases, including one case dealing with Section 3 of the Federal Arbitration Act, which on its face applies to any issue relatable to arbitration under an agreement, but has been interpreted by SCOTUS to be limited to the subject-matter limit of nearby sections. The Court concluded that they were only following SCOTUS precedent “in concluding that section 9058(c)(1) [the notice provision] applies only to rent default that arose during the 120-day moratorium and isn’t a permanent rewrite of certain state landlord-tenant laws jammed into otherwise temporary legislation.”
Finally, the Court discussed whether the eviction moratorium preempted state landlord-tenant law. The Court noted that landlord-tenant laws were traditionally an area of state responsibility, and cited SCOTUS precedence in asserting a presumption against preemption “unless there is a clear and manifest purpose of Congress.” The Court acknowledged that the eviction moratorium applied some preemption to state landlord-tenant laws but noted that there was some debate to how far Congress intended to preempt these laws. The Court found that “it is one thing to say that Congress preempted local landlord-tenant law briefly during the national COVID-19 emergency. It would be another to say that Congress preempted it permanently.” The Court concluded by finding that the “most correct interpretation of section 9058(c)(1) [the notice provision] is that it applies only to rent defaults that arose during the moratorium—the subject of the rest of section 9058 [the eviction moratorium]—and not to any default at any time for any reason.”
What’s Next
Typically, losing litigants would have the opportunity to file a motion for a rehearing (which is rarely granted), or file a petition for review before SCOTUS. Because Miller and Williams have previously failed to participate in these cases, it seems very unlikely these options will be pursued. If those options are unavailing or unsuccessful, the case will be sent back to the District Court for further proceedings.
The Court’s ruling hands a big win to housing providers in Iowa. Housing providers in Iowa can now follow state law to evict tenants without worrying about whether their cases will be thrown out for a CARES Act violation. While housing providers in Iowa can now rest easier, housing providers throughout the country continue to struggle with the lack clarity to the question of whether the CARES Act provisions were a temporary measure or a permanent change. Additionally, if the CARES Act provisions are found to be a permanent change in law, additional clarity is needed to determine if these provisions are required only in rent default evictions or all evictions. This is the first published CARES Act case in the country that has been a complete victory for the multifamily housing industry in holding that not only did the CARES Act provisions of the eviction moratorium lapse, but that they only applied to rent default evictions. Similar cases continue to filter up through the state court systems around the country, and housing providers can point to this case as a persuasive authority in their own states.
Learn more about recent legislation introduced at the federal level regarding the CARES Act.
Mark Poist is a Staff Attorney with NAA.