With the shutdown wreaking havoc across California, the nation and the globe, the real estate landlords are looking at ways to work around and provide rental housing. The fear is due to their tenants are enduring economic hardships brought on by government-mandated stay-at-home orders.
Millions are out of work and can’t make rent, and this is giving landlords hard decisions to make. Our landlords are trying to be lenient and postponing payments, but many more simply cannot afford to be that generous. This leaves one option, which is an eviction that neither party wants.
As property managers we know from a tenants prospective being forcibly removed from your home is not a pleasant experience. But now it is coupled with public in a health panic and recovering from economic shutdown. We are in the business of providing housing and not creating hardships, it’s a tough decision for landlords and property managers to start an eviction procedure for any reason.
Our government has deployed a stimulus package intended to boost taxpayers and, in some cases, curb evictions. The CARES Act does this by implementing a moratorium on eviction, penalties, and late fees for nonpayment of rent for all rental properties that, in anyway, receive financial support from the federal government, including, mortgages secured by Fannie Mae, Freddie Mac, and Federal Housing Administration or U.S. Department of Veterans Affairs, which is nearly all the financed homes the United States, and landlords who are receiving Low-Income Housing Tax Credits. Plus landlords who have tenants that are on Section 8 or Housing Choice vouchers.
The CARES Act protections will remain in place for 120 days starting on the date the measure was enacted, March 27, 2020 on or about July 27, 2020. Rather than immediately filing for an eviction at this time, it is highly suggested to make a six month payment arrangement with the tenants to catch up any past rent due and keep rent current, rather than immediately proceed with a eviction.
America has not faced such a situation, and the courts will be impacted causing delays in the eviction proceedings, and it’s nearly a 100 % chance that the Judge will make an order to workout the late rent payments first, before granting an eviction and lockout. It would be reasonable to ask the tenant to prove how they will pay current rent and make payments to catch up past rent, back at same job, overtime, new job, loan or rent assistance.
Over the next few months will be tough for a lot of people. Flexibility is the KEY in Prevention. Tenants need to pay rent, landlords need to use that money to pay their mortgages, and lenders need to pay their investors. Landlords may need to use some of the government loan assistance programs to tide their way through this, because we have the potential of housing crises similar to 2008. My advice is for tenants and landlords to work together and figure out payment arrangements on their own.
Robin Shidler, a California Real Estate Broker and Property Manager over 50 years.
