Update on Texas Evictions and New Texas Eviction Diversion Program

Thursday, October 8, 2020 8:39:00 AM

It’s been and continues to be a whirlwind when it comes to the eviction process in Texas, and throughout the country.  From the CARES Act, FHFA forbearance, local prohibitions (Austin, Dallas, San Marcos, San Antonio), individual justice courts’ refusal to hold hearings, the Texas AG Opinion, the CDC Order, and now coming is the Texas Eviction Diversion Program  first announced by Gov. Abbott, and the corresponding TX Supreme Court required citation notice.

The provisions impacting a potential eviction proceeding that are in place are currently: the CDC Order and the CARES Act 30-day notice.

Then a new program will be in place starting on October 12 in select counties followed by a statewide expansion in November the: Texas Eviction Diversion Program

 

CDC Order & TX Supreme Court 25th Emergency Order

Recall that the CDC Order essentially allows for tenants that file a “declaration,” under penalty of perjury, swearing to certain income levels and alternative payment efforts as the pre-requisites for a court to then prevent an eviction from proceeding until the end of this year.  There are exceptions for criminal or threatening acts or violations that threaten health and safety.

After the CDC Order was issued, the Texas Supreme Court issued its 25th Emergency Order.  This order maintains and expands upon the new various requirements imposed on a landlord seeking an eviction, as well as the CDC Order’s potential eviction abatement.

Prior to even filing a petition for eviction, the Emergency Order requires (see paragraph 3(a)(iv.)) that a landlord swear whether or not they have provided the plaintiff/tenant with a declaration under the, “Centers for Disease Control and Prevention’s agency order, titled Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19, (‘CDC Order’)” that took effect on September 4, 2020. 

The clear implication from this requirement is that the landlord should provide this declaration prior to filing for an eviction.  Skipping this step and then having to disclose that such a declaration/notice was not provided, basically means the justice court will then inform the tenant about the CDC Order.

Ordinarily when a petition is filed by a landlord for an eviction, the court must immediately issue citation directed to each defendant/tenant. The citation must include 14 enumerated items per Texas Rules of Civil Procedure 510(4)(a), which are:

(1) be styled “The State of Texas”;

(2) be signed by the clerk under seal of court or by the judge;

(3) contain the name, location, and address of the court;

(4) state the date of filing of the petition;

(5) state the date of issuance of the citation;

(6) state the file number and names of parties;

(7) state the plaintiff’s cause of action and relief sought;

(8) be directed to the defendant;

(9) state the name and address of attorney for plaintiff, or if the plaintiff does not have an attorney, the address of plaintiff;

(10) state the day the defendant must appear in person for trial at the court issuing citation, which must not be less than 10 days nor more than 21 days after the petition is filed;

(11) notify the defendant that if the defendant fails to appear in person for trial, judgment by default may be rendered for the relief demanded in the petition;

(12) inform the defendant that, upon timely request and payment of a jury fee no later than 3 days before the day set for trial, the case will be heard by a jury;

(13) contain all warnings required by Chapter 24 of the Texas Property Code; and

(14) include the following statement: “For further information, consult Part V of the Texas Rules of Civil Procedure, which is available online and also at the court listed on this citation.”

However, under the 25th Emergency Order, paragraph (3)(b), the court citation must now also include the following:

“The Centers for Disease Control issued an order stopping some evictions. You may be able to stop your eviction if you sign the attached Declaration under Penalty of Perjury for the Centers for Disease Control and Prevention’s Temporary Halt in Evictions to Prevent Further Spread of COVID-19 and provide it to your landlord and the court. Before signing the Declaration, read it carefully and make sure all the statements are true. The Declaration is sworn, meaning you can be prosecuted, go to jail, or pay a fine if any of the statements are not true. Find out more about the order at TexasLawHelp.org.”;

In addition, the citation from the court must include a copy of the declaration form, titled Declaration under Penalty of Perjury for the Centers for Disease Control and Prevention’s Temporary Halt in Evictions to Prevent Further Spread of COVID-19, (“CDC Declaration”) that is attached to the CDC’s Order or a similar declaration form.

Side Note: Starting on October 12 in some select counties, and going statewide in November, there will be additional citation and notice provisions also needed related to the Texas Eviction Diversion Program.

While judges must walk a fine line when hearing cases so as to remain neutral to both sides, many judges are now asking if tenants have applied to have their eviction abated under the CDC Order.  The Texas Justice Court Training Center has posted several forms and resources for justice courts to use, and guidance from the Texas Supreme Court has made it clear that judges can inform tenants about the CDC eviction protections.  And on Friday, October 9th, the CDC published a Common Q&A document for additional information.

CARES Act 30-Day Notice Still in Effect

The Texas Supreme Court’s 25th Emergency Order makes clear that the 30-day tenant notice provisions of the CARES Act are still applicable for “covered properties.” 

Originally the CARES Act required a 30-day notice and provided a 120-day moratorium on evictions for covered properties which are essentially any property backed by a federally supported program or mortgage (Low Income Housing Tax Credit properties; single-family and multifamily properties backed by Fannie Mae/Freddie Mac/USDA/FHA/VA; and most federally-subsidized rental housing properties - Section 8 vouchers).  Under the federal law, the eviction moratorium ended on Friday, July 24th. 

However, the law did not specify when the 30-day notice similarly expired.  Quite the contrary and to add ambiguity, the law was fashioned in a way so that at the end of the 120-day moratorium the 30-day notice would then still subsequently apply, effectively providing a total of 150-days.  But there is nothing in the law that sets the notice to then expire after the 150-days.  As such, tenant advocates contend that the notice is still in effect, essentially in perpetuity or until the federal law is changed.

The 25th Emergency Order effectively decided on whether or not the notice still applies by stating within the order that within a sworn original, amended, or supplemental petition from a landlord seeking an eviction, the petition must state whether or not:

  1. the premises are a “covered dwelling” subject to Section 4024 of the CARES Act;
  2. the plaintiff is a “multifamily borrower” under forbearance subject to Section 4023 of the CARES Act;
  3. the plaintiff has provided the defendant with 30 days’ notice to vacate under Sections 4024(c) and 4023(e) of the CARES Act

This is important because typically in Texas we have either a 3-day or 10-day notice of eviction.  The effect of this is for a MH community owner with a federally backed commercial loan is that they will need to provide a 30-day notice to vacate before filing an eviction petition.

 

Texas Eviction Diversion Program

On September 25th, Gov. Greg Abbott announced the allocation of over $171 million in funding from the CARES Act to be primarily used for targeted rental assistance for Texans at risk of becoming homeless due to eviction. The funding will also allow the Supreme Court of Texas, the Office of Court Administration, and the Texas Department of Housing and Community Affairs (TDHCA) to work in partnership with local governments and non-profits and the newly created Texas Eviction Diversion Program to help renters stay in their homes, catch up on missed rental payments, and avoid an eviction on their records.

Out of these funds, $167 million will go to targeted rental assistance and $4.2 million will be allocated through the Texas Supreme Court to help the state’s legal aid providers and pro bono lawyers provide basic legal services to eligible Texans through this pandemic.

Following the governor’s announcement, the Texas Supreme Court issued its 27th Emergency Order, effectively creating new citation and disclosures requirements (that are in addition to the new citation requirements in place for the CDC Order).

TDHCA has set up the preliminary parameters and eligibility of this new Texas Eviction Diversion Program (TEDP). 

The TEDP is a voluntary program that both the landlord and the tenant have to agree to participate in (the notices providing the necessary information on the program are mandatory).  If both the tenant and landlord agree to participate in the TEDP and meet the requirements, then TEDP may provide up to six months of rental assistance.

The assistance can be used to pay the full contracted rent that is past due (up to five months), and the remainder may be used to pay for subsequent months of assistance (up to a total of six months).

The TEDP uses a special court process that allows courts to put eviction lawsuits on hold and divert them to the TEDP. Under the TEDP, lump sum payments are provided to landlords for rental arrears in exchange for allowing tenants to remain in their homes and forgiving late fees. Diverted cases will be dismissed and made confidential from public disclosure.  

The eligibility requirements are:

For the Landlord:

  • Assistance for rent no older than April 2020
  • Rent for the household assisted may not exceed the TDHCA maximum limits
  • Must have a bank account and accept direct deposit
  • Units that are already receiving project-based assistance or are public housing units are INELIGIBLE
  • Units that are owned by a unit of government may be ineligible

For the Tenant:

  • Household income at or below 200% of poverty
  • Household has been financially affected by COVID-19 pandemic
  • Tenants are INELIGIBLE if they are receiving tenant-based voucher assistance, are in a unit receiving project-based assistance, or are in public housing

The first phase of TEDP is a total $3.3 million pilot program that starts on October 12th for the following counties: Brazos, Chambers, Montgomery, Travis, El Paso, Harris, Bexar, Deaf Smith, Potter, Randall, Erath, Parker, Palo Pinto, Wise, Fanin, Grayson, Bee, Jim Wells, Kleberg and San Patricio.

The second phase could start in November but depends on HUD approval of TDHCA’s submitted plans.  The money disbursement will also depend on if a given area is in an entitled area and/or already has rental assistance programs.  In other areas, it might not be until early 2021 before the program is available.

The TEDP and the resulting 27th Emergency Order mandate new disclosure notices in the citation for any eviction action. In addition to the typical 14 enumerated provisions required, and in addition to the new provisions required under the 25th Emergency Order for the CDC Order, a sworn original, amended, or supplemental petition must state:

  • that the plaintiff has reviewed the information about the Texas Eviction Diversion Program available at txcourts.gov/eviction-diversion/
  • the citation must include the following statement: “You may be able to stop your eviction if you and your landlord agree to participate in the Texas Eviction Diversion Program. At your trial, the court will tell you about the Program and ask if you are interested in participating. Find out more about the Program in the attached brochure, titled State of Texas Eviction Diversion Program, and at txcourts.gov/eviction-diversion/ ”; and
  • a copy of the informational brochure, titled State of Texas Eviction Diversion Program, prepared by the Texas Department of Housing and Community Affairs;

At an eviction trial, the judge must:

  • discuss the Texas Eviction Diversion Program with the plaintiff and defendant;
  • ask the plaintiff and defendant whether they are interested in participating in the Texas Eviction Diversion Program; and
  • if the plaintiff and defendant both express an interest in participating in the Texas Eviction Diversion Program:
    1. abate the eviction action for 60 days;
    2. make all court records, files, and information—including information stored by electronic means—relating to the eviction action confidential to prohibit disclosure to the public; and
    3. inform the parties of the reinstatement and dismissal procedures

Conclusion

The complicated process in the current COVID situation for evictions continues to evolve.  For many landlords the various layers of new requirements must be taken in aggregate, while for others only certain new provisions apply.

There are three on going lawsuits challenging the legality of the federal CDC Order, but those cases are making their way through the courts of Virginia, Tennessee and Georgia, and have not been ruled on, much less appealed, which they inevitably will be. 

Many of the new provisions create more questions and add to the ongoing confusion and ambiguity.  This post has been updated with new information since its original publication.