What the End of Eviction Moratoriums Actually Means for Landlords
In the last weeks of August 2021, the Supreme Court ended the moratorium on evictions, much to the relief of landlords. The COVID-19 pandemic wasn’t easy on anyone, and landlords were hit particularly hard. While the moratorium was created to protect tenants who were suffering a sudden loss of income, landlords still had mortgages and property taxes to pay. They were forced to continue paying those bills without much help from the local or federal government.
But the end of the moratorium doesn’t mean a return to normalcy. At least, not yet. With some states enforcing their own bans and landlords stuck in debt from tenants who are unable to pay months of accumulated rent, eviction laws and the rental market continue to create uncertainty.
- What financial issues will continue despite the moratorium ending?
To be clear, the moratorium ended on a federal level, but individual states can enforce their own eviction laws. New York will continue to ban evictions until mid-January 2022 while other states have varying limits until the end of the pandemic, a date that remains unclear. Also, though the ban was lifted in September 2021 for California evictions, this could always change in the future.
Even in states with no ban, landlords still face financial hardships. Let’s look at the statistics:
- Unpaid rent is placed in the ballpark of $17 billion.
- An estimated 3.5 million households are behind on rent.
- 3 million households are close to eviction.
- By the end of 2021, there could be 750,000 evictions.
- $47 billion in landlord relief may be slowed or hard to get due to state and local government bureaucracy.
Going through the actual process of eviction is another issue. Not every landlord can afford to file, especially while facing pandemic debt. Eviction is a long and costly process and it doesn’t guarantee a landlord will recoup losses, even though arrears were never canceled.
- Can landlords expect relief if a tenant is still unable to pay?
To put it simply: yes and no. California, for example, offers the largest state rental assistance in the United States. But there are some roadblocks. Landlords don’t qualify for state relief if tenants are not responding or if they can’t prove a tenant qualifies as low income. For example, a tenant qualifies for protection if they meet the following requirements:
- They cannot pay the total rent due to a substantial loss of income.
- They didn’t earn more than $99,000 in 2020 or they expect to earn less than $99,000 in 2021.
- They are making efforts to pay.
- They tried seeking government assistance.
- No other housing is available.
For a landlord to prove their tenant is low income, they need a signed declaration from the tenant stating financial hardship. This may not be possible to get or a tenant may be slow to apply for assistance. In Long Beach, CA, around 14,000 renters have registered to receive help, yet only 7,000 have completed the needed forms.
Also, a landlord can’t get state help when a tenant moves and can’t be located.
- Are there alternatives to evicting tenants?
According to Agents of LA, 2021 is a seller’s market. But for many landlords, eviction or finding alternatives is the only way to protect assets in today’s post-COVID world.
To avoid the cost and headache of evictions, many landlords are opting to negotiate payment plans. Communication is key. By starting a conversation, landlords can determine where the tenant is at financially and if they’ve sought any government assistance. If a tenant shows signs of wanting to make things right by paying their back rent, a landlord can negotiate a contract so everyone is on the same page.
Eviction laws are tricky, even with luxury real estate. By staying aware of state and federal changes and keeping communication open with tenants, a landlord can find ways to survive and thrive in a post-pandemic market.