Dealing with Nonpaying Tenants During Pandemic: The Current State of Eviction Suspensions

How do eviction suspensions impact your legal rights with regard to a tenant in default?

As the COVID-19 pandemic continues, landlords across the country are learning a painful lesson: Having the right lease clause is of little use if you can’t enforce it. Thus, the months of April and May have seen unprecedented levels of tenants not paying rent—as high as 30 percent, according to some reports. In the vast majority of cases, especially for small businesses affected by COVID-19, tenants that can’t pay rent deserve landlords’ sympathy and support rather than an eviction notice.

But the choice between hardball and softball should be the landlord’s to make. The problem is that states are removing that discretion by imposing freezes and other restrictions (which, for simplicity’s sake, we’ll refer to collectively as “suspensions”) on eviction suits and enforcement actions. Here’s a look at suspensions, where they are and aren’t in effect, and their impact on your legal rights vis-à-vis a tenant in default.

Three Kinds of Suspensions

Suspensions on evictions are official state actions that can take one of three forms:

1. Governor’s orders and emergency decrees temporarily suspending certain kinds of evictions through a certain date;
2. Equivalent decrees and ordinances adopted by cities, municipalities, counties, and other local jurisdictions; and
3.  Orders of the state Supreme Court temporarily suspending eviction proceedings and enforcement actions. Caveat: In some states, court order suspensions apply only to in-person proceedings and allow for eviction actions to be taken by videoconferencing and other remote means.

Where Suspensions Are in Place

How this affects you depends on the jurisdiction to which your commercial property is subject. As of May 15, 2020, suspensions of commercial evictions were in place in 26 states. (See “Around the States” to see whether there are restrictions in your state, as well as our Lawscape map.)

How Long Suspensions Will Last

Although all suspensions are temporary, the duration varies by state. Thus, suspensions have already expired in eight states (Alabama, Alaska, Arkansas, Georgia, Kansas, Idaho, Oklahoma, and South Carolina) and are scheduled to expire at the end of May in five more (New Jersey, Nevada, Texas, West Virginia, and Wyoming). By contrast, in some states suspensions are slated to stay in place for months after the emergency ends.

Which Tenants Are Protected

Suspensions are basically designed to protect small business tenants suffering revenue losses due to COVID-19. Several states list specific eligibility criteria:

• Maryland: Businesses experiencing a “substantial loss of income” due to COVID-19;
• Massachusetts: “Small businesses” not controlled by a multistate, multinational, or publicly traded company or one with 150 or more full-time employees;
• New York: Tenants facing financial hardship due to COVID-19; and
• Washington: Commercial tenants “materially impacted” by COVID-19.

The Procedural Requirements

Most of the suspension states don’t require any special procedures to be followed. Exception: In Oregon, tenants must provide evidence that nonpayment was caused by COVID-19 within 30 days of missing rent and to make partial payments to the extent they can while notifying landlords “as soon as reasonably possible” that they won’t be able to pay in full.

Evictions That Can Still Take Place

Some of the suspensions imposed by governors’ orders specify that protection applies only to tenants that can’t pay rent and doesn’t preclude eviction for criminal activity or conduct that endangers other persons.

Takeaway: The Legal Impact of Suspensions

Eviction suspensions are more about lease remedies than lease rights. The eviction courts and sheriffs offices that enforce their orders are temporarily closed. In plotting your next move, keep in mind that the suspension in no way justifies or provides tenants a legal defense for breaching their lease obligations to pay rent. Nor does it affect other remedies the landlord may have, including the right to exercise any non-eviction termination mechanisms of the lease. It may even be possible to file an eviction action against the tenant knowing that the court won’t take up the case until the suspension ends.