Many landlords and tenants have questions about how a dispossessory action (the Georgia form of eviction) for nonpayment of rent will work in light of Coronavirus disease 2019 (“COVID-19”). While the majority of protections provided have focused on residential tenants, there are general concerns and lasting impacts for both residential and commercial landlords and tenants.
Georgia’s Residential Eviction Protections
The Supreme Court of Georgia issued two orders on April 30, 2020 relating to dispossessory actions. The first order temporarily approved new Uniform Magistrate Court Rule 46 effective May 4, 2020 and the second order temporarily approved new Uniform Superior Court Rule 49 effective May 4, 2020. Each of these orders requires landlords who file a dispossessory action for residential property for nonpayment of rent (but not other dispossessory actions) before August 25, 2020 to submit verification of whether the property is exempt from the moratorium provided for in the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). These new rules include a sample affidavit to use if the property is not a “covered property” as defined by section 4024(a)(2) of the CARES Act. If the property is a “covered property” under the CARES Act, then the landlord shall comply with the 30-day notice requirement detailed in the CARES Act, and the required 30-day notice shall not be sent prior to July 26, 2020.
The effect of these new temporary rules from the Georgia Supreme Court is that Georgia landlords could not evict a residential tenant in a “covered property” (as defined in the CARES Act) for nonpayment of rent from May 4, 2020 until July 26, 2020. Although Georgia landlords could serve eviction notices beginning July 26, 2020, they are subject to the 30 day notice requirement under the CARES Act, meaning the earliest that Georgia landlords could remove a nonpaying tenant from a covered property is August 25, 2020.
These new rules are in line with the federally mandated CARES Act Eviction Moratorium in Section 4024(b) of the CARES Act, which prohibits Landlords from initiating eviction proceedings or charging fees, penalties or other charges for the nonpayment of rent where a rental property has a federally backed mortgage loan (a single family residential mortgage owned or securitized by Fannie Mae or Freddie Mac or insured, guaranteed, or otherwise assisted by the federal government) or federally backed multifamily mortgage loan (an almost identical definition except it applies to properties designated for five or more families), or where the rental property has tenants who receive subsidized housing money through public housing, the housing choice voucher program, Section 8 project-based rental assistance, rural housing programs or the low income housing tax credit program. This means that the “covered property” status under the CARES Act is tied to the funding of the property. The CARES Act does not absolve tenants of the responsibility to pay rent, so tenants may still face eviction (and liability for all past due rent) after the moratorium period ends.
As mentioned, Georgia landlords must submit an affidavit verifying that the CARES Act does not apply before they can evict a nonpaying residential tenant. The Georgia Supreme Court ruling states that if a landlord knowingly and willfully submits a false affidavit as to the material issue of whether the CARES Act applies to a particular property, the eviction case can be dismissed and the individual who signed the affidavit referred for prosecution (the sample CARES Act Affidavit attached to Uniform Magistrate Court Rule 46 and Uniform Superior Court Rule 49 is to be signed by the owner or owner’s attorney or agent).
In summary, certain residential tenants in Georgia are protected from evictions for nonpayment of rent, but only for covered properties meaning that the rental property has a federally backed mortgage, or who have tenants who receive subsidized housing money through public housing, the housing choice voucher program, or Section 8. Georgia does not have a statewide eviction moratorium like certain other states.
On the local level, Atlanta Mayor Keisha Lance Bottoms and the Atlanta Housing Authority (“AHA”) have announced relief efforts for individuals with lost income due to COVID-19 who are currently renting a unit owned or subsidized by AHA or who are participants in the Housing Choice Voucher Program.
Impacts on Commercial Landlords and Tenants
On the commercial leasing side, there are no statewide protections for commercial tenants, though it may be tough to get a hearing right now. There is a marked increase in tenant requests for landlords to temporarily defer rent (typically extending the term of the lease for the same length of time that rent is deferred) or reduce rent. We are also seeing some tenants negotiating to terminate leases early, and we have even heard of tenants closing up shop and vacating the leased premises without terminating the lease (which leaves such tenants open to a breach of contract claim by the landlord). We anticipate a large number of forthcoming eviction actions and lawsuits seeking unpaid rent, as certain states that have resumed evictions hearings have already seen a crush of proceedings. However, many landlords have been working with existing tenants since the landlords anticipate that it will be difficult to find new tenants to take over these commercial spaces in the current market. Tenants are also looking at force majeure clauses and the impossibility of performance claims, which vary by state and depend on the specific terms of the lease, especially if a lease includes force majeure clauses referencing pandemics or governmental closures. Generally speaking, Georgia will strictly interpret any force majeure provisions according to the specific terms in the parties’ contracts.
The Supreme Court of Georgia issued a statewide judicial emergency on March 14, 2020, extended four times to date and currently running through at least August 11, 2020, which limits certain court functions and could result in a backlog of cases. An article published August 6, 2020 in the Atlanta Journal-Constitution noted that more than 10,000 eviction cases have been on hold in metro Atlanta. However, courts in DeKalb and Gwinnett counties resumed landlord-tenant hearings this week, and Fulton and Cobb counties plan to restart landlord-tenant hearings next week. Fulton County, usually considered the state’s busiest eviction court, elected not to resume in-person court dates until at least November 2020, but will allow virtual hearings in the meantime if both sides agree to conduct the hearing virtually. Courts are seeing a significant backlog of cases and hearings are slow-moving due to health and safety precautions for in-person hearings and technical issues in the case of virtual hearings. The recent statewide judicial orders did not extend filing deadlines, so tenants served with eviction notices are still under strict time limits to file their formal answer or response.
If you have any questions about dispossessory actions in Georgia, please contact David Martin (email@example.com) or the Burr & Forman attorney(s) with whom you regularly work.