The US Government has sought to issue a nationwide, blanket ban on residential evictions until the end of the year.
The moratorium has come from the Centers for Disease Control and Prevention (CDC). Its legal merit is yet to be challenged in court at the time of writing this piece.
Known as the Coronavirus Aid, Relief, and Economic Security (CARES) moratorium, this is a significant move for America’s landlords and renters.
It doesn’t rescind the obligation for tenants to pay rent but is designed to help those suffering genuine hardship.
In the event of an impending default, each adult on the lease agreement must make a legal declaration regarding their financial situation to qualify for protection. This should cover the loss of employment or reduced hours. False statements can be penalised under perjury law.
Distressed tenants must also demonstrate they’ve made every effort to obtain rental assistance from the government and attempted to pay rent but without success.
Missed payments must be covered by tenants in the future – a potential debt trap for them. And landlords will be permitted to charge any associated fees, penalties and interest related to non-payment as stipulated in the original lease agreement.
There’s no protection for those earning $99,000+ p.a., or couples who would lodge $198,000 in a joint tax return.
Evictions can still be carried out if there has been criminal activity on the property, or if tenants have threatened others in a shared building or damaged property.
The CDC says it may rescind or extend its order depending on how the nation progresses in its fight against Covid-19. Local governments may have stricter conditions for evictions, so landlords should check their legal status.
The aim is to ensure housing stability across our nation and avoid making more folks homeless. Officials believe a spike in evictions will create a greater risk of community infection. Individuals and families might also move across state borders, further heightening the likelihood of Covid-19 spreading.
As an experienced real estate agent in your area, I’d welcome the opportunity to advise you on your specific situation.
These are challenging times, and landlords can be rewarded for displaying understanding and flexibility. For example, you might benefit from releasing a tenant from their lease. You might also consider passing on the benefit of any mortgage relief you’ve received from your bank.
Up to 40 million Americans are renting, and this is a difficult time for all of us. I recommend landlords explore all their options where tenants are in distress. Once this crisis passes, we will all benefit from stability and trust in the rental market.