The acceleration of the COVID-19 pandemic by mid-March led to an economic and practical national shutdown at the end of that month. As expected, this led to tens of millions of Americans losing their jobs, whether temporarily or permanently. One natural result is that millions of people who do not have substantial savings available found themselves unable to make their rent or mortgage payments. Renters and homeowners faced the grim prospect of losing their homes, and landlords and mortgage holders came to grips with a sharp drop in their income streams. It’s been three months since the shutdown began, and it’s a good time to see where we stand regarding evictions.

The Usual Course of Events

There are four basic situations that result in a landlord seeking to evict a tenant. As one might expect, the most common reason is nonpayment of rent. A second reason is the term of the tenancy has expired, such as the end of a one-year lease, and the landlord and tenant cannot agree on a new lease. The tenant becomes a “holdover tenant” and the landlord is free to evict the tenant at any time. The third reason is that the tenant is violating provisions of the lease, e.g., not keeping the premises clean, creating too much noise, or allowing too many guests. The fourth is the tenant violates the North Carolina Controlled Substances Act, or commits a related criminal offense. Of these, eviction for nonpayment of rent is the only situation that federal and state law have directly addressed during the pandemic.

In ordinary times, once a tenant misses a rent payment, the landlord wishing to begin an eviction action must first deliver a written notice to the tenant. That notice informs the tenant that she has ten days to pay past due rent and any late fees or the landlord will begin eviction proceedings. If the the tenant fails to pay as demanded, the landlord files a complaint with the Clerk of the Superior Court. The clerk issues a summons that includes a notice for the tenant to appear and the Sheriff’s department is charged with serving the summons on the tenant. Under the summary eviction proceeding as described by North Carolina General Statutes § 42-28, the hearing is to be scheduled within seven business days after issuance of the summons. Section 42-29 requires that the summons be served not later than two days prior to the scheduled hearing.

What’s changed with the pandemic?

Governor Roy Cooper issued the first executive order declaring a state of emergency on March 10^th. His order limiting the size of mass gatherings and closing schools followed on March 14th. Several more orders were issued in subsequent weeks; the first affecting courts was order 121 on March 27^th. This order imposed the stay-at-home restriction, and although government operations were classified as essential businesses, it was plain that on-site staffing at courthouses would be substantially reduced, impacting the processing of civil and criminal cases. In fact, on March 13^th Chief Justice Cheri Beasley had issued two emergency directives, limiting access to courthouses and postponing most proceedings in ongoing cases. Although these directives and several subsequent ones that refined the use of remote hearings and effectively continued most proceedings by weeks at a time did not expressly mention evictions, their cumulative effect was to suspend the scheduling of evictions. The first express mention of evictions in a court directive was in the one issued May 30^th, which stayed all eviction actions until June 21st. That same day the governor issued an executive order that prohibited a landlord initiating or taking further action in an eviction for non-payment of rent. That provision expired by its terms on June 21^st. However, the courts are still very restricted in actions that can be handled, and the chief justice has issued a subsequent directive that gives clerks of court up to thirty days after issuance of the summons to schedule the hearing.

Congress weighed in on the matters of evictions and mortgage foreclosure actions in the CARES Act. Using the authority granted to it by the Constitution’s spending clause, in section 4024 Congress established a moratorium on eviction filings for nonpayment of rent in “covered dwellings.” That term includes nearly all residential real property in which the owner has a federally backed mortgage, which would include mortgages insured by the VA or FHA and mortgages purchased by the Federal Home Loan Mortgage Association (Freddie Mac) or the Federal National Mortgage Association (Fannie Mae). The moratorium extends 120 days from the adoption of the act on March 27^th, or until July 25^th.

Summing it up.

The North Carolina evictions moratorium expired on June 21^st, and the federal moratorium on covered dwellings will expire on July 25^th. The chief justice has already issued a directive giving court clerks 30 days to set a hearing after issuing summons. The governor’s executive order on evictions also gives tenants a period of at least six months to pay rent arrears. Again, note that this provision and the state and federal moratoriums apply only to evictions based on nonpayment of rent, although the executive order also encourages landlords and tenants to work together to avoid evictions in other cases. In a June 23^rd message to its members, the North Carolina State Bar said that there are more than 10,000 pending eviction actions in the courts. As the moratoriums expire, this number will undoubtedly increase. With the steady increase in COVID-19 cases currently reported in the state, it seems likely that court directives will further delay proceedings. In short, both landlords and tenants should be prepared for extended delays in the processing of eviction proceedings for all causes.

Whether you are a tenant seeking to protect your rights or redress problems with your residence, or a landlord who seeks to protect your property investment while you treat tenants properly under the law, the Law Office of Ken Hirsh is available to help you meet your goals. Set up your appointment now!