The COVID-19 pandemic has disturbed every aspect of our lives. The same goes for people who are renting their place to stay. People are losing their jobs and their source of income. At the same time, homeowners need a way to pay their mortgage. Are there any information for landlords and tenants on how to act during these tough times?
During the time of the Coronavirus lockdown, many people have lost their income, or have been in some other way financially impacted. This means that many renters can’t afford to pay their full rent. On the other side, landlords still have to pay the mortgage for their investment property and they also have deadlines for their payments. Many compare these moral arguments to a battle among classes and it’s difficult to say who is in the right. Here are some information for landlords and tenants about the rights and obligations both sides have during the COVID-19 pandemic.
In late March, Congress passed the Coronavirus Aid, Relief and Economic Security (CARES) Act, which has some new information for landlords and tenants. For example, there is a 60-day moratorium on foreclosures on homes with federally backed mortgage loans – in other words, on mortgages which are insured by the Federal Housing Information, Freddie Mac, Fannie Mae or some other federal agency.
At the same time, the law allows requesting forbearance for up to 90 days if someone has experienced financial hardships. Landlords who have received forbearance under the CARES Act won’t be able to serve eviction notices to their tenants until the forbearance ends. The Act also prevents all landlords with federally backed mortgages from evicting renters until 25th July – and the date may be prolonged.
What does this mean?
The homeowners will have some flexibility from the lenders when it comes to paying their mortgages, as there aren’t supposed to be any foreclosures for a certain period of time. This means that they can also be flexible towards tenants and that tenants can’t get evicted – at least not when their landlords have a federally backed mortgage.
But what if you don’t know what kind of mortgage your landlord has? Well, there are ways to find out and one of them is this sheet. There are also additional ways for you to find out who is the true owner of your property, and one of them is this list created by Regional Housing Legal Services (RHLS). There are many other good online resources with various information for both sides.
What if a landlord doesn’t have a federally backed mortgage?
According to the Urban Institute, around a quarter of the US rental units are in buildings with federally backed mortgages. This means that they are covered by the CARES Act’s protection against eviction. The CARES Act also protects properties subsidized with Low Income Housing Tax Credits or similar federal backings.
However, what to do if the property you are living in isn’t covered by the CARES Act? Then you must rely on state or local laws. If you look at this Anti-Eviction Mapping Project, which has a lot of information for landlords and tenants, you can see which states have passed the laws protecting tenants from eviction in case of losses of income due to the Coronavirus pandemic. If your state isn’t covered by this map, contact your lawyer or local representatives to find out if you have some kind of protection.
What if you can’t afford your rent?
Just because you are protected from eviction doesn’t mean you shouldn’t pay your rent. If you owe your landlord monthly rent, they can evict you as soon as the emergency is over. But what to do if you simply can’t afford to pay at the moment? The answer to this is very different depending on where you’re living.
If you’ve lost your job, the best thing you can do is to contact your landlord and to explain to them the situation you’re in. This way you can work out and try to make a deal. If you don’t know how to word yourself, there is a sample letter created by Tenants Together. You can adapt it a little bit and give it to your landlord. If nothing else, you’ll know what to expect.
The VICE website also has an article with information for landlords and tenants and what to do if you’ve encountered any problems. The article claims that tenants have a higher ground at the moment, as most landlords can’t afford to lose their source of income. Of course, there are other kinds of landlords who are even forcefully – and often times, illegally – forcing people out of their homes. There are even some bad tenants, who don’t want to pay their rent on purpose, just because they think they can.
There are several relief funds created for the purpose of protecting both tenants and the landlords during these difficult times. Most states have also started implementing the federal stimulus to create emergency rental assistance programs. Some elected officials are even voting on the bigger budget for the emergency rental assistance. The National Low Income Housing Coalition is also pushing for the federal government to pass the eviction moratorium which would apply to all rental units. Even if this doesn’t pass, there are surely to be some relief funds for both landlords and tenants.
Some tenant advocates are trying to begin a rent strike, but this probably isn’t a good option as not everyone has the same kind of problems. Both the landlords and the tenants need income to survive, and it would be the best if some sort of mutual agreement could be made.