Don’t Include Late Fees Incurred During Moratorium in Post-Moratorium Collections

The CARES Act created a federal moratorium on evictions of tenants for most federal housing programs. The moratorium took effect on March 27 and extends until July 25, 2020. According to the provisions of the act, it’s unlawful to “charge fees, penalties, or other charges to the tenant related to the nonpayment of rent” [Section 4024(b)(2)].

While the act makes it unlawful to charge such fees during the 120-day eviction moratorium, you may be wondering if it’s permissible to charge late fees after the moratorium ends on July 25 for fees that otherwise would have accrued during the moratorium period.

According to the sixth update of the COVID-19 Q&A issued by HUD’s Office of Multifamily Housing Programs, HUD will interpret the late fee provisions of the CARES Act to mean that “fees and charges that could not be assessed during the eviction moratorium should not accrue and should not be charged after the moratorium ends.”

HUD further states that an owner “may only charge fees and penalties during the eviction moratorium if the charge is wholly unrelated to a tenant’s nonpayment of rent.” In addition, HUD confirms that “rents not paid during the moratorium, as well as fees assessed prior to the eviction moratorium, which took effect on March 27, 2020, may be collected.”