Back on March 27, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was passed by Congress and signed into law by President Trump. In response to the COVID-19 pandemic, this act provided immediate financial assistance for American workers, families, and small businesses. More importantly, it prohibited evicting tenants living in certain types of housing for non-payment of rent for a period of 120 days. More specifically, it calls for a COVID-19 eviction moratorium for tenants of rental properties that are either classified as government housing or are financed with a federally backed mortgage such as loans securitized by Fannie Mac or Freddie Mac and loans that are insured by HUD or the VA.
Accordingly, many states have also issued orders and adopted urgency ordinances establishing a temporary eviction moratorium on evictions due to non-payment of rent for renters impacted by the coronavirus in the US real estate market. These orders ban landlords from the filing of new eviction actions for non-payment of rent or from charging late rent fees. As the unemployment rate started skyrocketing, following the CARES Act eviction moratorium was important to lessen the impact of COVID-19 on tenants and protect them from becoming homeless in the midst of a global pandemic.
Coronavirus Eviction Moratorium Expiring in Some States
These eviction moratoriums, as mentioned, are temporary are now starting to expire. The CARES Act eviction moratorium, for example, suspended evictions only until the end of April. As for the government-backed mortgage buyers, Freddie Mac and Fannie Mae, they have agreed to do the same until at least June 30, 2020. So now, many fear that a wave of evictions is coming as people who have lost their jobs still can’t make the rent and the financial help from the coronavirus stimulus package is running out.
In addition, seven states across the country did not implement a statewide eviction moratorium or put court eviction proceedings on hold due to the novel coronavirus outbreak, to begin with. These states are Arkansas, Georgia, Missouri, Oklahoma, South Dakota, West Virginia, and Wyoming. However, it was still illegal for landlords with federally-backed mortgages in these states to file evictions for non-payment of rent according to the federal eviction moratorium.
And as for states who did issue a coronavirus eviction moratorium, each state implemented a different range of policies regarding the eviction process and foreclosures in response to the pandemic. As a result, each state had set a specific expiration date. Already, more than a dozen states including Texas, Wisconsin, Virginia, and South Carolina have lifted the ban and allowed landlords to begin the legal eviction process. And as of this writing, eviction moratoriums are set to expire in more states this coming week.
States That Extended COVID-19 Eviction Moratorium
Some state governors have recently announced an extension of the temporary ban on eviction as the effect of the coronavirus continues to impact people’s finances. Meaning, if you’re a landlord of a single-family rental or a multi-family rental, you can’t start the eviction process if you run a real estate business in these states. Here’s a list of states that extended the ban on evictions and the new expiration date as of this writing. Please note that this information is changing hourly and that laws differ by state. For the latest information about the status of the COVID-19 eviction moratorium where you live, make sure to check your state’s judicial system or governor’s website.
- North Carolina: June 21, 2020
- Iowa: June 25, 2020
- Illinois: June 27, 2020
- Hawaii: June 30, 2020
- Connecticut: July 1, 2020
- Florida: July 1, 2020
- Indiana: July 1, 2020
- Pennsylvania: July 10, 2020
- Arizona: July 22, 2020
- Vermont: July 24, 2020
- California: July 28, 2020
- Washington: August 1, 2020
- Massachusetts: August 18, 2020
- New York: August 20, 2020
Laws for Landlords to Keep in Mind
Some laws regarding the coronavirus eviction moratorium differ by county or municipality. This is why as a landlord, you must check your local laws and consult a lawyer to fully understand the regulations regarding evictions and foreclosures that may apply to your rental property. However, there are a number of laws that all landlords need to comply with during this pandemic. Most importantly, and as already established, landlords are prohibited from initiating the eviction process from residential dwellings (including single family homes, multi-family homes, mobile homes, or other structures lawfully used as a residential dwelling) if the tenant exhibits the inability to pay rent due to COVID-19. For residential leases, many states also prevent landlords form:
- Assessing late fees, interest, or other penalties for late payment or nonpayment
- Accumulating additional interest, fees, or other penalties for existing late fees during the effective period of the order
- Going to court to get a writ against tenants for not paying the rent
- Raising the rent or increase tenants’ deposit
Moreover, the COVID-19 eviction moratorium does not waive or remove a tenant’s obligation to pay back rent owed. A tenant will have up to 6 months after the expiration of the moratorium to pay his/her landlord unpaid rent. Landlords and tenants are also encouraged to communicate in good faith with one another and to work together on the timing and terms of payment and repayment solutions. Landlords should offer a reasonable payment plan based on each tenant’s circumstances. Having said that, landlords are still allowed to evict tenants if:
- He/she plans to occupy or sell the property, after providing at least 60 days’ notice
- The tenants have caused serious damage to the rental property or injury to the landlord or their agent or neighbor – except if the damage was done prior to the COVID-19 crisis
- The tenant is using the rental property for illegal purposes
- The tenant has threatened, abused, intimidated or harassed the landlord, the landlord’s agent or a neighbor
Additional Landlord Recommendations for 2020
Besides communicating and negotiating with your tenants to achieve an agreement, here are some more recommendations for landlords during the coronavirus eviction moratorium:
- Continue to document and preserve copies of all letters you sent to tenants requesting them to pay their rent
- Document and preserve copies of all letters from tenants notifying you of their inability to pay some or all of the rent due to the COVID-19 pandemic
- Send a letter to your tenants requesting documentation that proves that their lack of rent payment stems from the ongoing pandemic
- Encourage your tenants to pay whatever they can and form your own plan together for repayment of missed months
- If you’re paying your mortgage from the collected rent, apply for mortgage relief if you haven’t already
- Check your local government’s ordinances to determine whether local restrictions are still in place and operate accordingly
- Check your local government’s ordinances to determine the time frame tenants have to pay you back rent of missed months
- File an unlawful detainer action if a tenant still refuses or cannot pay rent after the COVID-19 protections are lifted in your area
For more information and updates on the coronavirus pandemic and its impact on landlords/real estate investors in the US housing market 2020, keep reading Mashvisor’s blogs.