Federal Eviction Moratorium Extended
In March, the CDC announced that the federal moratorium on evictions would be extended until June 30. While this news is a relief for many renters, property owners aren’t happy about it. There have been three deadline extensions now; one in December, one in January and now this one. For property owners with tenants who haven’t paid rent since the end of August 2020, the situation is becoming a bit worrisome. How will tenants ever get back on track? Here’s what landlords need to know and some ideas for helping those tenants get up-to-date on rent payments.
Landlords Have Rights, Too
Ordinarily, if a tenant doesn’t pay rent, you have the right to begin eviction proceedings in accordance with state and local laws. But with the current moratorium on evictions, that right has been stripped. However, that doesn’t mean that landlords have no resources to deal with this situation. Landlords still have options and rights.
First of all, according to the Cleveland, Ohio Housing Court, non-paying tenants must submit an Eviction Protection Declaration. This is an official form that is used to determine whether a tenant is protected under the CDC’s moratorium. In other words, a tenant can’t just stop paying rent. They need to answer the questions on the form and make a formal submission to their landlord. Once that’s received, the Cleveland landlord can either “allow the eviction to be stayed” or challenge the declaration. If the landlord chooses the latter, then a hearing would be scheduled where a court would decide. Note that even if you, as a landlord, accept the declaration at one point, you can always challenge the declaration later, for instance if you have new information that the circumstances have changed or the information was inaccurate.
CDC’s Authority Questioned
If you’re wondering who gave the CDC the right to enact a moratorium on evictions, you’re not alone. Several organizations and lawmakers are questioning the CDC’s authority on this. One such organization is Pacific Legal, a non-profit that is suing the CDC on behalf of Ohio landlords for the right to evict.
In Memphis, the right to evict now is more muddled. On the 16th. U.S. District Judge Mark Norris struck down the CDC’s moratorium, stating that the CDC had overstretched beyond their authority. Legally, the ruling means the moratorium is no longer enforceable in western Tennessee. In practice, it may be harder to evict in Memphis right now than usual, depending on whose legal advice you listen to.
Financial Help For Landlords
If you have a Fannie Mae or Freddie Mac-backed loan, you are likely able to delay mortgage payments without incurring late fees or taking a hit on your credit score.
The American Rescue Plan (ARP) is pending. A new stimulus package is in the process of being voted on by the Senate. (The House has already passed it.) The bill sets aside $25 billion for rental assistance and $5 billion for utility bill assistance, but includes another moratorium on evictions through September 2021. Since “the eviction ban is limited to federally guaranteed properties, those same borrowers are also eligible for forbearance through September 2021.”
Ideas to Help Tenants Get Back on Track
Landlords can also help themselves by helping their tenants get back on track with rent payments. Keep in mind that most tenants want to pay rent. They don’t want to get behind any more than you want them to. They don’t want to be evicted after the moratorium is ended. So it’s likely that your ideas will be welcomed. Here are some constructive ideas to consider implementing through your property manager.
Steer Tenants Toward Government Help
Most, if not all states, have put assistance programs in place for tenants who find themselves unable to pay rent. The National Low Income Housing Coalition has published a helpful spreadsheet that summarizes available programs, organized by state. That spreadsheet can be found here. There may also be local programs for city residents. In Memphis and all of Shelby County, a federal grant of 28.2 million is being disbursed to those who need help with rent and utility payments. Information can be found here.
CHN Housing Partners is available to help tenants with rent in Cleveland and all of Cuyahoga County.
Offer Partial Payments
When the eviction moratorium ends, many tenants will be woefully behind on rent. If you’ve ever fallen behind on a montage payment or a car payment, you know how hard it can be to catch up. Depending on your rental contract, you may have prohibited tenants from making partial payments. This is pretty standard in a boilerplate rental agreement. However, due to the extenuating circumstances of COVID, consider making an addendum where your tenants can make partial payments. If this situation lasts even three more months, This partial payments might add up to at least one month’s rent paid in full.
Offer a Temporary Reduction in Rent
Another way to help tenants is to temporarily reduce the monthly rent. Doing this might make the tenant feel confident that they can make the reduced rent after all. One option to try is to make the rent low enough so that it just covers your mortgage payment plus expenses.
If you do decide to try any of these ideas, you should do so through your property manager. For the tenants who are truly struggling due to job loss or illness, the eviction moratorium makes sense. Unfortunately, that doesn’t make it any easier for landlords. Hopefully, the information above will make things a little more bearable until the pandemic is over. If you have questions or concerns about your rights where your turnkey rental is located, please don’t hesitate to contact us.