NewsWorldThe change in the end of the moratorium on...

The change in the end of the moratorium on rent payments is a “whiplash” for landlords

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(CNN) – Owner Matthew Haines said that since the start of the pandemic, he has lost a quarter of a million dollars in rental income from tenants who they did not pay the rent.
“I’ve never woken up with panic attacks before this year,” said Haines, 53, who owns and manages 253 rental units in the Dallas area through his company Tangent Group. “This is all because we cannot control and direct our business.”

He worries about supporting his family, keeping his employees and whether he has to sell the buildings and single-family homes he owns, which have been his livelihood for 27 years, he said.

Like many owners With tenants who have not paid their rent during all or part of the pandemic, Haines awaited the end of the federal moratorium on eviction established by the Centers for Disease Control and Prevention (CDC, for its acronym in Spanish). in English) to help prevent the spread of the coronavirus.

But after it expired at the end of July, the CDC issued a new eviction moratorium focused on areas experiencing a high spread of the coronavirus. That encompasses about 90% of the tenants, including the area where the Haines properties are located.

The CDC said that evicting people could be detrimental to public health and interfere with efforts to curb the pandemic.

“I am totally upset for her,” he said of the new moratorium, which will be in effect. Until 3 October. “It is a violation of my rights as an owner.”

Haines said it does not intend to evict all of its non-paying tenants. But it makes a distinction between those who cannot pay and those who do not want to. Only the latter, he said, he wants out of his buildings.

“We are not kicking out people who cannot pay,” he said. “We are kicking out people who refuse to pay.”

Independent rental owner Matthew Haines inspects a solar panel installed on top of one of his buildings earlier this summer.

Haines said he currently has about eight people from 253 units who refuse to pay. Haines believes that either these tenants have the means to pay, or they could receive rent assistance, but have not applied for it. “They haven’t paid in six months or a year. We were finally going to be able to do something about it.”

According to Haines, landlords like him have done what was asked of them, shouldering the burden of housing millions of people who lost income during the pandemic and fell behind in paying rent.

“But every time we think we can get to the other side, they move the goalposts and change the rules,” he said. “I want to run my business. I want to feed my family. I can only do it for a while under these conditions before we end up in financial failure.”

Whiplash for homeowners

When Dawn Pfaff, a landlord with properties in New York and Florida, learned that the federal ban on evictions was re-taking effect after expiring last month, she said it filled her with “dread.”

Pfaff said he believes that allowing one person to live on someone else’s property for six months or a year for free, while someone else has to pay taxes, insurance and maintenance, is a violation of the law and is unconstitutional.

The idea that the moratorium is not legal it is much discussed. Court cases have been resolved both for and against and other cases have not been resolved yet. Also, the moratorium does not eliminate the rents owed.

But most of America’s homeowners are like her, so-called “mom and pop,” with a handful of properties, depending on rent for income or to finance retirement.

“I haven’t bought stocks and I don’t have a lot in savings for retirement,” says Pfaff, who also works as a real estate agent and runs other property-related businesses. “Our whole plan is to get our mortgages paid off and live off rents as our retirement income.”

Although he said most of his tenants have been keeping up with their rent during the pandemic, he said he sold a 65-unit mobile home park in upstate New York last December, in part because it had become very cumbersome to evict tenants with recent changes in tenant laws in the state before the pandemic.

“There are a lot of people like me who have tenants who can’t pay,” Pfaff said. “And their hands are tied.”

News of the latest eviction moratorium, just days after the previous one expired, was a “whiplash” for homeowners, according to Greg Brown, senior vice president of government affairs for the National Apartment Association, an industry group that groups together the owners.

“We were disappointed to see that we came back to it after we agreed that it would end,” he said. “Now we have a totally new metric and owners are wondering how to track this and trying to figure out how to deliver.”

Unlike the previous ban, the new protection is more limited and targets the areas most affected by the coronavirus. Protects tenants in areas with a “high” or “substantial” transmission of covid-19, according to CDC monitoring of the virus.

But although they are presenting judicial resources Against the new moratorium, Brown said his association is telling landlords that they should postpone evictions for non-payment of rent and that they should work with tenants to get their rent reduced.

There are, he said, some places where the judges are interpreting the moratorium differently. In Franklin County, Ohio, for example, judges announced that they would not apply the new rule prohibiting evictions.

Following the renewal of the moratorium on evictions, the Franklin County municipal court, which includes Columbus, announced that it “will not follow the moratorium order on evictions issued by the CDC,” due to an earlier judgment of the appeals court that determined that the CDC lacks the authority to issue the national moratorium, according to a statement.

The court is “legally bound to follow the decision of that court and will accept and process eviction requests,” the statement said.

But, according to Brown, there are significant penalties for violating the order. “The owners are not going to risk having to face them.”

With the eviction moratorium updated, many landlords, Brown said, are probably figuring out what it takes to lose two more months of rent.

“They are figuring out how to cover 60 more days,” he said. “What is the new estimate of how much they can recover from the rental assistance?”

Not being able to pay vs. refusing to pay

When the pandemic hit, Haines knew it would be a blow to low-income residents in his units, where a one-bedroom apartment rents for between $ 800 and $ 900 a month, Haines said. He mentions that he eliminated late fees and switched everyone to a month-to-month contract, seeking to ease the burden of breaking a contract if they could no longer pay the rent.

But when local eviction moratoriums were followed by a national ban, he found that few people were leaving.

Haines says he’s doing what he can. Currently, Haines has 24 tenants who are behind on their rent, 17 of whom owe more than $ 1,000 in total. Late payment fees remain low for those working for rental assistance and tenants who are still struggling can stay on a month-to-month contract without the standard 10% to 20% premium to do so, he said.

Most of his tenants who are behind on their rent want to pay but can’t and are doing what they can to fix their arrears, he said. He and his staff are contacting residents, making sure they are aware of the federal emergency rental assistance program and helping them request it.

One of her tenants, she said, lost her income but is working to pay what she can and requested to receive part of the $ 46 billion from help paying rent.

“It is about $ 6,800 late,” he said. “But I’m not going to kick her out for that. We’ll get over it with her.”

The biggest problem, he said, is tenants who refuse to pay.

“We have not requested the eviction of anyone who is working with us,” he said. But it has evicted residents who violated the terms of the rental agreement.

Like the resident who, he said, earns $ 80,000 a year, which is within the individual income limit of $ 99,000 to qualify for the CDC’s moratorium on evictions. But when the moratorium took effect, Haines said the tenant sublet part of the apartment while she was living there, getting $ 1,500 a month for herself and withholding rent from Haines.

Because the moratorium only protects tenants from eviction for non-payment of rent, Haines was able to kick her out for what she described as a breach of the terms of her lease.

There are also residents who refuse to apply for rent subsidies, he said. To be protected by the CDC moratorium, tenants must sign a statement that they have made a good faith effort to pay and apply for government assistance.

You’ve also seen at least two residents manipulate the rent payment subsidy program by requesting aid money from multiple addresses, with inaccurate contact information, or by arranging for checks to go directly to them without giving you back rent. And he says he still can’t evict them.

But, compared to other independent rental owners, Haines considers himself lucky so far. He and his wife have been conservative with their finances. Still, rental shortages have slowed their ability to save for retirement and they have needed to pump cash to ensure they don’t have to lay off any of their 10 employees.

This year’s losses have also forced Haines to change his criteria for selecting new residents, looking more at the history of rent payments, which he says “hurts the same low-income people that the government does. says he’s trying to help. “

Haines said that as long as his residents are willing to work with him, he will do everything he can to keep them housed.

“I’m not going to run away from people who are trying to do the right thing,” he said of his tenants. “We can keep it for a couple more months, but we shouldn’t have to.”

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