Without question, the impacts of COVID-19 have been felt on a wide scale across the economy of Utah. Many rumors and questions have arisen as to whether these impacts require tenants to pay rent, or whether they may be evicted for lease violations at the present time. In light of the economic impact of the pandemic, Governor Herbert issued an Executive Order dated April 1, 2020. This order pertains to eviction and rental payments in light of COVID-19’s impacts. However, it is important for landlords to know and understand what is and is not included in the Executive Order, and to understand their rights at this time.
First off, the Executive Order does not apply to commercial leases, but is only made in reference to residential leases. The Executive Order is not a widescale preclusion of eviction actions, nor does it require or imply rent forgiveness. Its provisions only apply to evictions for nonpayment of rent in residential leases, where: 1) the tenant was current on rent as of March 31, 2020; and 2) the tenant has suffered lost wages directly resulting from COVID-19, has undergone self-isolation (and presumably lost wages as a result), or has tested positive for COVID-19. As such, if a residential tenant has failed to pay rent, but cannot demonstrate that such failure is caused by a COVID-19 related factor, the landlord is allowed to proceed with the eviction. Similarly, a tenant can be evicted for other breaches of the lease which would normally warrant eviction, such as creation of nuisance, illegal activity, or some other issue that is specified as an offense warranting eviction in the lease agreement.
Landlords should further keep in mind that the Executive Order does not create or imply rent forgiveness. The Executive Order provides, “a tenant remains responsible for all rent pursuant to the tenant’s rental agreement.” Meaning, the landlord will have the right to recover rent for the entire period of the lease and will not be obligated to reduce or forgive rent for any period of time. While there is a limited “Rent Deferral” program that has been implemented, it is quite narrow in its scope, and requires the tenant to apply and demonstrate that the requirements are applicable; the deferral is not automatically granted. Even under the Rent Deferral order, the tenant is required to enter into a repayment agreement wherein the full rental amount will be paid.
If you have any questions about this article, please contact Tyler Foutz at Skoubye Nielson & Johansen at 801.365.1017. I have represented real estate owners and landlords for over a decade, and I would be happy to spend a few minutes discussing these or other issues property owners are facing.