Phoenix real estate attorney Scott Clark is on professional probation for filing to evict Arizona renters who were protected by the CARES Act last year.
Clark is the first attorney to face discipline following a 2020 Arizona Republic investigation that found 900 evictions were filed against Maricopa County tenants who likely should have been protected by the federal CARES Act.
Clark didn’t “take steps necessary to identify numerous client properties covered by the CARES Act” and filed “numerous eviction actions in violation of the CARES Act,” the Attorney Discipline Probable Cause Committee of the Supreme Court of Arizona ruled last month.
The CARES Act, passed by Congress on March 26, 2020, to provide fast economic help to people hurt by the COVID-19 pandemic, barred landlords with federally backed mortgages from evicting tenants before July 26, 2020, for not paying rent. About 70% of the nation’s mortgages are federally backed by Fannie Mae, Freddie Mac and FHA.
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The court’s disciplinary action follows a recommendation of the State Bar of Arizona, which investigated complaints about 500 Maricopa County eviction cases. Clark admitted 128 of those cases violated the federal eviction protection law.
Another complaint against Clark included 45 Pima County evictions, but it’s not clear how many of those were found to be illegal.
Clark of the Law Offices of Scott M. Clark is on probation for a year but can continue to practice.
The judicial panel also ordered Clark to swear that all judgments obtained in evictions that violated the CARES Act be vacated, and to notify the three major credit agencies in writing that the judgments had dropped.
Specifics about the cases that violated the CARES Act are not available. Clark asked the panel to seal records about those cases and it agreed.
Clark said in a written statement to The Republic that “some unintentional errors occurred” with eviction filings during the CARES Act.
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“Once we became aware of them (the errors), we undertook an extensive self-audit,” he said. “This process, together with our interaction with the State Bar, has led to substantive improvements in our processes and procedures, and we continue to be proactive in seeking out and implementing additional improvements.”
Could other attorneys face discipline?
Corinne Cooper, a Tucson landlord, tenant advocate and former law professor, filed the complaint against Clark for the Pima County evictions with the State Bar of Arizona in June 2020. Her complaint included documents showing the attorney filed multiple evictions for missed rent payments on properties covered by the CARES Act.
She said the State Bar should act quickly if Clark doesn’t follow up on vacating wrongful evictions judgments and contacting the credit agencies.
An eviction black mark can stay on tenants’ credit records for several years and strongly deter other landlords from renting homes to them.
“I only wish the bar would have taken the same steps against all the attorneys with all cases I filed,” she said. “And unfortunately, the reason for tracking and fighting these cases was to keep people in their home, and it didn’t help that.”
Cooper also filed complaints against other Arizona attorneys over wrongful evictions of people who should have been protected.
The Republic investigation found several attorneys filed evictions illegally under the CARES Act in Maricopa County.
Unlike with the state and federal eviction moratoriums, tenants living in apartments or rental homes with federally backed mortgages didn’t have to prove they were impacted by COVID-19. Under the CARES Act, they were automatically protected from eviction for not paying rent.
The CARES Act should have stopped landlords from even starting the eviction process in court, housing advocates say.
The CARES Act also allowed property owners with federally backed mortgages to skip their mortgage payments until the end of the year. This means some of the landlords who were allowed to miss their payments could have evicted renters who could not make theirs.
Information on what property owners had forbearance programs last year hasn’t been released by the federal government.
County justice courts, where evictions are handled, started requiring landlords to declare whether a property was covered under the CARES Act on Arizona eviction filings after a state Supreme Court rule went into effect in early July 2020.
County justice court spokesperson Scott Davis said Arizona judges had to rely on the information they received from rental owners and their attorneys.
He said the Arizona Code of Judicial Conduct prevents judges from independently researching a case before them, so “judges hearing an eviction case are not allowed to ask or go online to check if a property was covered by the CARES Act. That must be addressed by the parties” involved in the case, he said.
Landlord representatives and attorneys acknowledged that evictions may have been filed in conflict with the CARES Act during the Republic investigation in the fall of 2020, but they blamed the federal government’s lack of clarity for any potential errors.
“It is the AMA’s understanding that the (Clark law) firm and its attorneys cooperated fully with the State Bar and have made substantive changes to their processes and procedures to ensure such an issue does not happen again,” said Arizona Multihousing Association CEO Courtney Gilstrap LeVinus about the ruling against Clark for violating the CARES Act.
She said the CARES Act changed the eviction process with no notice, overnight, and the housing industry didn’t have time to figure out the 300-page law.
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Top complex for evictions
Clark’s firm represented the owner of an affordable west Phoenix apartment complex with federal financial backing that tried to evict the most residents during the CARES Act, according to The Republic’s analysis.
The Flats at 2030, which was bought by a Houston group with the same name last year, had 31 eviction filings during the protection time frame. Some of the filings were for other issues, but many were for not paying rent.
The complex has 263 apartments, so almost 12% of its tenants faced eviction.
Last year, attorney Christopher Walker of Clark’s firm said his client mistakenly believed the property was not covered by the CARES Act for the first few months the law was in place.
He said there was “substantial confusion when this law took effect and few resources available for property owners to confirm their property was backed by a federally backed loan.”
“My client in no way intended to violate the CARES Act. My client has since vacated all judgments wrongly granted by the courts. My client has advised me that some of the tenants who were subject to these judgments voluntarily vacated their units well before the constable arrived. Others were able to resolve the issue with my client directly,” Walker said.
Coverage of housing insecurity on azcentral.com and in The Arizona Republic is supported by a grant from the Arizona Community Foundation.
Reach the reporter at firstname.lastname@example.org or 480-694-1823. Follow her on Twitter @jboehm_NEWS.
AUTHOR: Catherine Reagor and Jessica Boehm