Eviction, foreclosure moratoriums proposed

Local leaders would have increased authority regarding evictions and foreclosures during a public health emergency under a bill heard Feb. 4 by the Judiciary Committee.

Under LB394, sponsored by Lincoln Sen. Adam Morfeld, a municipality, county board or local public health department could enact a moratorium on evictions and foreclosures if deemed necessary to protect the community’s welfare during a public health emergency.

The bill is in response to the struggles of homeowners, landlords and tenants, Morfeld said, all of whom are worried about their ability to financially weather the current pandemic.

“This is a real problem that needs to be addressed,” he said. “Whether it be now or for future public health emergencies.”

Any moratorium imposed would end when either the relevant mayor, city manager or governing body determines by resolution or proclamation that it is no longer necessary, regardless of which entity originally enacted the moratorium. The public would be given no less than 14 days’ notice of such decision.

If a mayor or city manager calls for an end to a moratorium, the relevant governing body could overturn the decision with a two-thirds majority vote.

The bill would prohibit a landlord from serving notice of intent to terminate a lease or filing an eviction action in court while a moratorium is effective. A landlord also could not assess any fees or penalties for nonpayment of rent.

LB394 would not preclude a landlord from initiating an eviction proceeding after a moratorium ends for good cause unrelated to a rent delinquency. A tenant displaced from their dwelling in violation of the bill’s provisions would have cause for civil action to be restored to their dwelling and to seek damages and attorney’s fees.

The bill also would prohibit a mortgagee from filing a foreclosure action in court against any landlord while the moratorium is in effect. A housing assistance fund would be created to distribute both government assistance and private gifts and grants.

Erin Feichtinger of Together Omaha spoke in support of LB394. Her organization spent $960,000 in 2020 to help people pay their rent, she said, yet many people still lost their homes.

“It’s hard to fully articulate how disheartening it is to be one organization of many in our community trying desperately to hold back the tide of sorrow, pain and fear that every person who called us for help was feeling at the prospect of losing their home during this pandemic,” Feichtinger said. “LB394 would ensure that as we come out of COVID-19, if we ever go through this again, we can act quickly to protect the health of our community.”

Also supporting the bill was Kasey Ogle of Nebraska Appleseed. While availability of affordable housing was a problem before, she said, the pandemic only exacerbated the issue.

“This bill is essential for public health. The coronavirus pandemic caught us before we were prepared,” Ogle said. “While actions have been taken to suspend evictions, those steps have been inadequate to protect us from unnecessary spread of the coronavirus.”

Under the bill, in the six months directly following the end of a moratorium, a landlord would be prohibited from terminating or not renewing a lease agreement due to a rent delinquency arising during a moratorium. Following the six-month grace period, a landlord would be required to provide a tenant the opportunity to propose a reasonable repayment plan for unpaid rent.

A payment plan would be considered reasonable under LB394 if the tenant agrees to pay future rental payments on time and in full, any overdue rent is paid in full within six months and there is good cause to believe the tenant would have the financial means to meet the repayment plan terms.

Opposing the bill was Gene Eckel, representing both the Nebraska Commercial Property Owners and the Apartment Association of Nebraska. The bill may be unconstitutional, he said, because it would violate the contract clause.

“We think it’s government overreach to take this moratorium and say that [we] can’t enforce a contract,” Eckel said. “There is no compensation here for landlords. Nothing in this bill that says there’s going to be any assistance to pay landlords while they’re not receiving rent.”

Jon Cannon, representing the Nebraska Association of County Officials, also spoke in opposition. While the intent of the bill is laudable, he said, it would encourage people to make late property tax payments.

“If that’s the case, you’re going to create a cash-flow problem for the very agencies you’re depending on to get you through a pandemic,” Cannon said.

The committee took no immediate action on the bill.