What Property Owners Need to Know About the Extended Eviction Moratorium
August 13, 2021 / by Hignell Property Management Team
The CDC recently announced that it would be extending the federal eviction moratorium into the fall. The eviction moratorium was designed to curb the spread of COVID-19 by providing relief to renters who are struggling to keep up with their bills. But, this bill also has an impact on property owners who rely on that rent to pay their own bills. Here's a look at what property owners need to know about the extended eviction moratorium.
The New Expiration Date is October 3rd, But It Could Be Extended Again
The eviction moratorium was extended after it lapsed at the beginning of August and the new date has been extended to October 3, 2021. That date isn’t necessarily set in stone and could be extended further depending on the spread of the virus. But the moratorium is not retroactive and any evictions that were completed between August 1st and 3rd are still legal.
But any new eviction proceedings must cease until after October 3rd. Property owners should keep an eye on the news for new updates on whether the moratorium will be pushed back or if there are any federal aid programs being announced. Congress has already allocated an additional $46 billion in emergency rental relief, of which an estimated $3 billion had been given out.
You Cannot Legally Evict Residents Until the Ban Has Expired
The extension of the moratorium means that you cannot legally evict a resident, even if they have not paid you any rent in months. property owners must follow the eviction rules prior to the pandemic – which means you cannot just kick someone out on the street without a legal proceeding. But until October 3, 2021 no legal proceedings will be commenced.
If your resident is struggling to pay the rent, the best thing to do is have a conversation and see if you can work something out. Some rent is better than no rent and if you have to lower the price temporarily or agree to accept payment at a later date, most residents will be willing to negotiate. But it's illegal to evict a resident without a legal proceeding and if you do so, you'll be held liable. So it’s best to look for other options for the time being.
There are Government Resources Available for Renters Who Are Struggling
If your resident is struggling financially, you should let them know that there are all kinds of programs available that can help. The Department of Housing and Urban Development offers rental assistance and can recommend a pro bono housing counselor who can help residents devise a plan and gain access to resources. The US Treasury Department also offers a list of rental assistance programs by state that can help residents get back on their feet.
There are a variety of programs out there that are offering financial assistance to those impacted by the pandemic. There are even programs that can help property owners who are losing income because of the moratorium. They can be somewhat difficult to find and apply for on your own. But that’s where housing counselors and other government resources can be helpful. They can let you know your options based on your location and level of need so that you and your residents can work something out.
Homeowners With a Federally Backed Mortgage Can Still Request Forbearance
In response to the extension of the eviction moratorium, Frannie Mae has also announced that they are extending their mortgage forbearance program for multifamily properties until September 30, 2021. This means if you purchased your property using a federally backed loan, you can discuss repayment options to rearrange your finances if you have been impacted by the deadline extension.
Property owners have a variety of ways they can make up for the missed payments, including a repayment plan, repaying it as a lump sum at a later date, deferring payments until the end of the mortgage, or making modifications to their loan terms.
Even if you do not have a federally backed loan, you can still negotiate with a private lender. Many have similar programs available that will let you reconfigure the payment schedule of your mortgage if you’ve been a good customer in the past.
The pandemic has impacted the economy in ways that we won’t fully understand until years later. But the good news is that there are plenty of resources available to help property owners weather the storm.
If you own a property and you’re tired of dealing with the burdens of self-managing your property on your own, you may consider hiring a property management company. They can help you with everything from preventative maintenance to collecting rent to applying for federal assistance programs, as well as keep you updated on important laws and legislation, so you can focus on more important aspects of your real estate business.
Topics: News, Residential Property Management, Commercial Property Management, Investment Property