Rent and Evictions Moratorium Extended One Month, Why It May Not Be Good News for Landlords
The Biden administration announced last week that the nationwide ban on evictions has been extended by one more month to continue to help tenants unable to make rent payments as a result of the coronavirus pandemic.
The Centers for Disease Control and Prevention director Dr. Rochelle Walensky extended the moratorium from June 30 until July 31, AP reports The CDC also added that “this is intended to be the final extension of the moratorium.”
According to the Department of Housing and Urban Development, 6.4 million American households were behind on their rent at the end of March. The extension to the moratorium is considered one of the few lifelines millions of Americans have in order to prevent increases in homelessness and evictions.
Adding to the pressure are thousands of landlords who are refusing or unable to accept the $50 billion Congress has allocated for rental assistance. The federal assistance was meant to help struggling landlords make mortgage payments in the wake of tenants not being able to make their payments.
Building owners say that the aid often has too many strings attached, such as preventing them from removing problematic tenants or requiring them to turn over sensitive financial information to government agencies or contractors, the Wall Street Journal reports.
The process also requires a good amount of administrative work and documentation on the part of the landlord which can be time-consuming and a deterrent to entry to the federal program.
The extension of the moratorium has been worrying landlords. Multiple groups representing landlords have been lobbying hard to end the moratorium and now warn that the additional month extension will put mom and pop operations out of business, CNBC reports.
While renters have faced considerable hardship during the ongoing pandemic, thousands of landlords throughout the country are feeling considerable financial pain as well, particularly the mom and pop landlords. Some have found it necessary to sell off property to stay afloat. Law firm Margolin, Winer and Evans LLP offered some advice on how landlords can cope with the effects of extended moratoriums until the pandemic eases up. The list, which can put additional work and even a financial burdan on the building owners, includes looking into the CARES Act benefits, applying for a favorable loan, line of credit or disaster loan through the Small Business Administration, working out partial payments with renters, relying on security deposits, rewarding loyal tenants with lower rent, establishing rent deferral programs, waiving late payment penalties and revising the rules for moving out.
Landlords may also qualify as a small business and use the myriad of resources through the SBA to apply for relief programs just like any other business owner. Landlords can get up to $2 million in financial assistance depending on their level of need determined by the SBA at a low interest rate.
Once the moratorium was extended, the Biden administration outlined measures it claims it will now take to further assist renters and landlords during the ongoing pandemic. In a press release, the White House states it would ensure that the 30-day eviction notice requirement for federally-backed properties is enforced. They stressed that HUD and USDA will ensure that no landlord, public or private, whose underlying financing is backed by the government may require a tenant to vacate their unit for non-payment of rent until 30 days after the landlord has provided the tenant with a notice to vacate.
They also added that they will clarify how landlords can receive further assistance and enter federally funded relief programs to make the process run more smoothly.
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