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Michigan’s COVID-19 Eviction Moratorium Ends July 16, 2020: What Happens Now?

 

In response to the devastating social and financial effects of the COVID-19 pandemic, Governor Gretchen Whitmer issued Executive Order 2020-19 on March 23, 2020 ordering that all eviction actions in the State of Michigan are frozen until April 17, 2020.  This moratorium was extended to May 15, 2020 under Executive Order 2020-54, extended again to June 11, 2020 under Executive Order 2020-85, and extended once more to June 30, 2020 under Executive Order 2020-118.  The idea was to keep Michigan residents from being tossed from their homes while job layoffs continued, infection rates rose and district courts operated at limited capacity.

On June 26, 2020, Governor Whitmer issued Executive Order 2020-134 and extended the effect of Executive Order 2020-118 one more time into mid-July.  Effective July 16, 2020 at 12:01 a.m., the eviction moratorium officially ended and landlords were once again able to engage in legal procedures to remove tenants from rentals and mobile home parks.  By many estimates, there will be nearly 100,000 new eviction cases filed in district courts throughout the state in a short period of time due to non-payment of rent in the last four months,  Many tenants may find themselves displaced from their homes following summary proceedings within the next couple months.  What relief is available to renters to avoid eviction if they cannot pay their rent?

Anticipating a congestion of eviction cases, the Michigan Supreme Court issued Administrative Order 2020-08 on June 24, 2020 to lay out the procedure to manage this workload.  Under normal circumstances, district courts would schedule hearings as a “cattle call” where many cases are called at the same time.  However, the risk of infection and social distance requirements make it impossible to run court today in that kind of manner.  Instead, courts are directed to use a prioritization approach in adjudicating these cases to limit the number of persons in the courthouse at one time.  When scheduling hearings for recovery of possession of premises under MCL 600.5714 and MCL 600.5775, the following priorities apply:

  • “First priority: complaints alleging illegal activity under MCL 600.5714(1)(b), and complaints alleging extensive and continuing physical injury to the premises under MCL 600.5714(1)(d), complaints alleging that the tenant or someone in the tenant’s household has caused or threatened physical injury to an individual while on the leased property under MCL 600.5714(1)(e), and complaints alleging that the tenant is trespassing or squatting under MCL 600.5714(1)(f).” AO 2020-08(2)(a).
  • “Second priority: complaints alleging nonpayment of rent for 120 days or more.” AO 2020-08(2)(b).
  • “Third priority: complaints alleging nonpayment of rent for 90 days or more.” AO 2020-08(2)(c).
  • “Fourth priority: complaints alleging nonpayment of rent for 60 days or more.” AO 2020-08(2)(d).
  • “Fifth priority: complaints alleging nonpayment of rent for 30 days or more.” AO 2020-08(2)(e).
  • “Sixth Priority: All cases described in First Priority through Fifth Priority that are filed after a court has moved to the next priority designation, and any case for recovery of possession of premises where the complaint alleges nonpayment of rent of less than 30 days. Cases filed in a lower numerical priority designation (e.g., a second priority case filed during a court’s priority five period) shall be given first consideration in order of priority.”  AO 2020-08(2)(f).
  • “Courts should proceed to a subsequent priority when all cases in the higher priority have been scheduled for hearing.” AO 2020-08(2)(g).
  • “Instead of setting many cases for one hearing time as has traditionally been common, each case must be scheduled for a particular date and time (whether held in-person or remotely) to allow in-person proceedings to be held safely.” AO 2020-08(2)(h).  Most courts are allowing virtual participation by way of the Zoom application.
  • “A filer who filed a case before April 16, 2020 (the date Administrative Order No. 2020-8 entered) must update the factual allegations in the complaint and file the verification form required by Administrative Order No. 2020-8 before a hearing will be scheduled. The form will allow a filer to indicate that the case was filed before the moratorium period began and therefore, even if a covered dwelling, is not foreclosed from proceeding.  If the filer must remove any fees or costs that are prohibited under the CARES Act, the filer must file an amended complaint for any action that proceeds during the moratorium period.  The court shall not require an additional filing fee.”  AO 2020-08(2)(i).

The priority phases apply to any landlord/tenant filings alleging a lease violation between March 20, 2020 and June 30, 2020.  The requirement that a tenant must file a written answer (pursuant to MCL 5735(4)) within 5 days of service is suspended.  The tenant, however, must appear at the court hearing in person or virtually to avoid a default judgment.  The tenant may still request a jury trial to contest the eviction action.  MCR 4.201(F)(3) is temporarily suspended to the extent that a jury demand must be made in the first responsive pleading.  Instead, if the tenant wants a jury trial, he or she must demand it (and pay the jury demand fee) within seven days of the first responsive pleading.  AO 2020-08(10).

The priority phasing of cases can buy additional time for tenants to figure out how to obtain additional funds or work out a resolution with the landlord.  Likewise, the delay in getting a day in court may incentive landlords to reach out to their renters and work out a payment plan.

In addition, Executive Order 2020-134 directs that landlords may agree to seek relief from the Eviction Diversion Program (EDP) in lieu of evicting the tenant.  The Michigan State Housing Development Authority (MSHDA) oversees this program through its network of Housing Assessment and Resource Agencies (HARAs).  These HARAS, in collaboration with county and municipal stakeholders, will design an eviction diversion process where court filings regarding COVID-19 housing debt can be resolved by conditional dismissals instead of judgments of possession:

  • “COVID-19 housing debt” means a money debt resulting at least in part from a breach of a residential lease, residential executory contract, or residential mortgage due to failure to make a required payment during a state of emergency or state of disaster arising out of the COVID-19 pandemic. Executive Order 2020-134(2).
  • Landlords and tenants can apply for EDP to satisfy up to 90% of the amount due to the landlord with a lump sum payment. However, landlords must be willing to waive any late fees and penalties and forgive 10% of the COVID-19 housing debt owed.  Executive Order 2020-134(3).  Landlords opting into this program can be paid back rent as soon as two weeks.
  • Eligibility for rental assistance payments is available for households at or below 100% of area median income (based on tenant income and household size). Executive Order 2020-134(4).
  • Landlords accepting EDP funds agree to using a conditional dismissal as opposed to pursuing a court order. This is advantageous to the tenant as it protects his or her credit history and will not appear as a judgment of eviction when searched by prospective landlords.

This program is attractive to landlords who want to keep “good” tenants that are otherwise financially struggling due to the COVID-19 pandemic.  The governor set aside $50 million to fund the EDP programs throughout the state with more future money available whrn the federal government disperses additional coronavirus relief funds.

If you or a loved one is facing eviction in Michigan and need assistance, a skilled lawyer can help guide you towards the resources that can help you stay in your home.  When you need legal advice or representation, do not hesitate to contact the experienced attorneys at Kershaw, Vititoe & Jedinak PLC for assistance today.

 

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