Housing providers have special considerations when it comes to their residents. How they can protect them? What precautions should they take? How they can insure the building is protected and sustainable. This FAQ answers those questions.
What properties are covered by the federal eviction moratorium?
All rental properties are covered by the CDC notice(link is external). NAR has published a one-page summary(link is external) of the order issued by the CDC. It does not apply to residential properties in locations with an eviction moratorium that provides the “same or greater level of public-health protection that the requirements” of the order. It also does not apply to American Samoa.
When did the federal eviction moratorium begin?
The moratorium began on September 4, 2020. After that date, a housing provider may not evict for failure to pay, any tenant who submits a signed attestation, per the Notice through December 31, 2020.
Is rent that accrues during the eviction moratorium forgiven?
No: The moratorium prohibits housing providers from evicting, but does not forgive the rent that is due. In fact, for tenants who have attested and received the eviction moratorium, a property owner or agent may charge penalties, late fees and interest, per the lease.
How can the government do this? Isn’t it a 5th Amendment takings?
The order by the CDC is based under Section 361 of the Public Health Service Act, and is designed to “prevent the further spread of COVID-19.” Legal challenges are anticipated.
Is there an appropriate way to request past due rent without having to do 30-day notice to quit?
An owner can certainly make a request for rent payments that are due during the eviction moratorium; owners may also enter into repayment agreements with tenants during the moratorium, making clear the amount due and the terms for repayment.
If a tenant doesn’t pay the full rent on time, can I send a late payment notice to the tenant?
Yes, but with some caveats: the moratorium prohibits initiation of eviction proceedings but it does not prohibit an owner from sending the tenant a notice that the rental payment is late or incomplete. Among other things, if an owner wants to initiate collection or eviction proceedings after the moratorium ends, it is wise to have a copy of these notices on hand, making clear that the housing provider documented the nonpayment and provided information to the tenant. If you send such a notice, you should consult with your legal counsel about the wording. Among other things, the notice needs to indicate that it is not itself a notice of eviction.
What other steps should I take if a tenant doesn’t pay the full rent on time?
In addition to providing a notice of nonpayment, many owners are asking tenants to execute a formal rent forbearance agreement. These documents constitute a contractual agreement between the housing provider and the tenant, identifying the amount of rent that is unpaid and providing terms for repayment in the future. If a tenant has a good rental history in the past, it may be desirable to work out terms for repayment after the moratorium, rather than go through the effort to evict a tenant now and try to re-rent the unit. From the tenant’s point of view, many are eager to enter into a forbearance agreement that establishes a mechanism to pay accrued rents to avoid having to pay all accrued but unpaid rent in a lump sum at the end of the moratorium period. A forbearance agreement clarifies what the tenant owes and when it will be paid, and provides remedies that the housing provider can exercise if the repayment terms are not met. Again, housing providers need to consult with legal counsel to make sure that the forbearance agreement complies with state and local landlord/tenant laws in general.
Can tenants pay partial rent?
Some housing providers may want to enter into a rent discount agreement with tenants, under which the tenant agrees to pay a discounted amount of rent on the regular due date each month. Many tenants, even if they recently lost their job, will continue to receive some income from unemployment compensation and other sources and would be willing to pay some portion of their current rent to avoid facing a lump sum at the end of the moratorium period and possible eviction thereafter. Likewise, many housing providers would prefer to receive at least some portion of their rental income on a current basis, rather than no income at all and face the cost and uncertainty of eviction in the future. Again, any such discount agreement should be prepared by legal counsel familiar with state and local landlord/tenant law requirements.
If tenant does not pay rent during the eviction moratorium, when can I start to charge fees or penalties for nonpayment?
Immediately. Unlike the previous moratorium in the CARES Act (which has expired), the CDC notice allows a property owner to charge late fees, penalties and interest on any rent that accrues during the eviction moratorium period (September 4 – December 31), per the terms of the lease.
Am I allowed to initiate eviction for cause (criminal activity, etc.) during the eviction moratorium?
Yes: the moratorium only applies to actions “for nonpayment of rent or other fees or charges.” A housing provider can initiate a “for cause” eviction if a tenant has breached some other lease provision – such as committing a crime or assault on another tenant – that does not involve nonpayment of rent or other charges or fees.
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