Written by: Attorney Tracy Turner
Much has been written about the effects of COVID-19 on renters and homeowners concerning foreclosures and evictions, but nothing has been written about the small business owners who are the landlords for these people. Many of these small business owners themselves have mortgages on their properties. For those small businesses whose properties, whether apartments or single-family residences or duplexes, financed through HUD, FHA, Fannie Mae or Freddie Mac, back on March 18, 2020 President Trump announced a two-month moratorium on evictions and foreclosures going through the end of April, thus, small business owner/landlords with these types of financing cannot evict or foreclose on their tenants or homeowners. As such, they must look to the Federal Government for help provided small businesses under the CARES Act.
Speaking of the CARES Act, it also places a moratorium for one hundred twenty (120) days beginning March 27, 2020 on not only evictions for “covered properties,” but also prohibits the assessment of a late fee against the tenant during this same period. A landlord with such a covered property cannot even issue a notice to vacate until thirty (30) days after the one hundred twenty (120) day moratorium ends.
For other landlords in Alabama, the Court system is still open for evictions and foreclosures but certain Sheriffs in Alabama, specifically Jefferson, Montgomery and Madison County, have refused to execute writs of possession issued by the Courts, thus failing to fulfill their constitutional oath and duties. Similarly, some Judges in Alabama have stated that they would not issue judgments for eviction or foreclosure, even if all of the paperwork was timely and properly filed.
At this time, no Judges in Mobile County nor the Mobile County Sheriff’s Department has refused to conduct move-outs pursuant to lawfully issued writs of possession or failed to enter an Order on properly supported motions for eviction. Nevertheless, for those instances where the tenant files an answer, even in Mobile County, the landlord is in limbo since the Alabama Supreme Court has suspended all trials through April 30th, and one can only postulate this will be extended well into May considering the continued expansion of COVID-19 cases. It may well be June before a landlord gets a trial date on an eviction where the tenant will have paid no rent in many cases since February or before.
At this time, Governor Ivey has not issued a state-wide prohibition on evictions and foreclosures. However, the Governor has not ruled out doing so if COVID-19 experience in Alabama gets any worse.
Considering the situation, if a landlord has someone who is more than a couple of months behind on their rent, and a proper seven (7) business day notice has been provided, it may very well be in their best interest to move forward with filing the eviction as soon as possible before a moratorium is put in place by the Governor. Doing so, might assist the landlord in later being paid by the tenant if, in fact, the tenant receives stimulus money from the government under the CARES Act before trials are re-instituted in May or June. If a landlord needs advice on these issues, myself and the attorneys at Johnstone Adams, LLC will be happy to assist.