On March 11, 2020, Governor Ducey declared a public health emergency in
Arizona due to the ongoing coronavirus outbreak (COVID-19). Many employees
are now working from home for the foreseeable future, and businesses are
struggling to stay afloat amidst the public practice of social distancing.
While much focus has been on the consequences of business closures due to
COVID-19, an area that also needs to be looked at is the consequences for
landlords and tenants. Numerous actions have been implemented recently at
the federal, state, and city levels that affect a tenant's rent obligations
for residential properties, and these actions are laid out below. Also,
actions regarding utilities are addressed.
FEDERAL ACTION: CARES Act postpones foreclosures and places a moratorium on
evictions for residential properties with federally backed mortgages.
On March 27, 2020, President Trump signed into law the Coronavirus Aid,
Relief, and Economic Security (CARES) Act. The CARES Act prohibits
foreclosures on federally backed mortgages for 60 days beginning March 18,
2020, and provides up to 180 days of forbearance for borrowers who have
experienced financial hardship related to the COVID-19 outbreak.
A federally backed mortgage loan includes any loan secured by a lien on
residential property that is purchased by Fannie Mae or Freddie Mac; insured
by HUD, the VA, or the USDA; or directly made by the USDA. A multi-family
borrower with a federally backed mortgage loan can receive up to 90 days of
forbearance for financial hardship related to COVID-19.
Evictions. Additionally, the CARES Act places a temporary moratorium on
evictions by preventing landlords from initiating legal action to recover
possession of a rental unit or to assess fees, penalties, or other charges
to a tenant related to nonpayment of rent where the landlord's mortgage is
federally insured by HUD, Fannie Mae, Freddie Mac, the rural housing voucher
program, or the Violence Against Women Act of 1994. This moratorium lasts
for 120 days from the effective date of the CARES Act.
STATE ACTION: Governor Ducey issues executive order postponing all evictions
for residential properties for 120 days for individuals affected by
On March 24, 2020, Governor Ducey issued
Executive Order 2020-14, postponing
all eviction action orders for 120 days against any individual affected by
COVID-19. This Executive Order is very broad. It covers any individual
is diagnosed with COVID-19;
is ordered to self-quarantine;
is at high risk for COVID-19 due to an underlying health condition; or
"suffered a substantial loss of income" resulting from COVID-19.
Examples of “substantial loss of income” include:
reduction in compensation,
closure of place of employment,
obligation to be absent from work to care for a home-bound school-age
other pertinent circumstances.
The Executive Order does not relieve a tenant of the obligation to pay rent
under his/her lease agreement, so a tenant cannot rely on the Executive
Order to avoid rental obligations. The Executive Order only temporarily
postpones any eviction action order. Also, it is likely that, based on the
plain language of the Executive Order, nothing prevents a landlord from
initiating an eviction action and proceeding with it, but then just having
to wait 120 days until an eviction action order could be enforced.
CITY ACTION: Mayor Gallego has halted all evictions for city-owned housing.
In a Tweet on March 15, 2020, Phoenix Mayor Kate Gallego halted all
financial evictions from city-owned housing. Mayor Gallego stated:
"Phoenix has halted all financial evictions from city-owned housing during
#COVID-19. This is the responsible thing to do to ensure people have access
to shelter and sanitation. The state should ensure this protection is
extended to all Arizonans during this uncertain time."
This directive is likely broader than Governor Ducey's Executive Order on
evictions, because Mayor Gallego's tweet is not limited to people affected
PRIVATE ACTIONS: Utility companies are voluntarily pushing back payments.
In addition to the actions above,
numerous utility companies have pushed
back payments for utilities. While there have been no orders, yet, mandating
changes to utility company billing and payment practices, a few companies’
revised practices include the following:
Arizona Public Service will not shut off electricity for non-payment and
is also waiving late fees.
Cox Communications will not shut off services to anyone impacted by the
coronavirus. Cox is also waiving late fees and eliminating data caps.
City of Phoenix Water Services Department has halted all water shutoffs to Phoenix residents
who are late paying their bill.
Southwest Gas stopped service disconnections indefinitely or "until the
coronavirus situation improves."
Salt River Project has suspended all disconnections for both residential
and commercial customers who are having trouble paying.
If you are an owner of residential rental properties or a lender with
residential rental properties as collateral for your loan, or if you have
questions about these eviction restrictions or utility protections, Sacks
Tierney attorneys are available to provide advice on these matters.