The new bill covers a wide variety of necessary COVID-19-related costs, including an extension of the eviction moratorium and a substantial $25 Billion in rental assistance for those who have been unable to pay for rent or utilities as a direct result of COVID-19 related financial hardship.
The Coronavirus Relief Bill was signed by President Donald Trump in December and could be a positive turning point for both landlords and tenants who were impacted financially by COVID-19. This assistance for renters is, by extension, extremely beneficial for property owners or landlords who have not received regular rent payments from tenants, which are often relied on to run the business, maintain the property and ensure bills are being paid. It will be essential in keeping tenants in their homes after the eviction moratorium is lifted, as well as in continuing to keep the property profitable for landlords. This new aid will last through September 30, 2022, providing essential financial support to both the tenants who have not been able to pay the full amount of rent since the onset of COVID-19 in March, and the landlords or property owners who house them.
California’s eviction moratorium is currently set to last through January 31, 2021, and many impacted renters are hoping that the assistance will arrive prior to the eviction ban being lifted. It is estimated that this new order has been a life raft for to up to 40 million renters in the United States. The continuation extends the inability to evict tenants for non-payment through January 31, rather than December 31.
How Does Rental Assistance Work?
The money that is allocated for rental assistance can be used to back-pay both late rent or unpaid utilities. Tenants will have the opportunity to receive support for up to a nine-month period of non-payment of rent, as well as an additional three months paid ahead, amounting to a full year of assistance. In some cases, renters may be able to apply for additional help beyond the initial 12 months of assistance.
Which Renters are Eligible for Rental Assistance?
According to the NAA, eligible households are those that have an income below 80% of the area median income, have a demonstrated risk of housing instability or homelessness, and have one or more household members who qualify for unemployment benefits are experiencing financial hardship as a direct result of the COVID-19 pandemic.
It is up to state and local governments to provide this assistance to renters who have fallen behind on payments and need the assistance the most. This includes families with an income 50% below the area median income, low-income households, households with one or more unemployed members, or renters who are unemployed and have struggled with unemployment for three months (90 days) or longer. To remain eligible, recertification is necessary every three months.
What Constitutes Financial Hardship Due to COVID-19?
It can be a little confusing when determining how to best prove that a financial hardship, or non-payment of rent, is directly related to the COVID-19 pandemic. Things that would constitute a financial hardship as a direct result of COVID-19 include:
- A reduction in work hours due to the pandemic causing financial difficulties;
- Temporary business shutdowns as a result of the pandemic;
- Layoffs or terminations due to COVID-19; or
- An increase in out-of-pocket medical expenses
A clear example of this would be an individual working at a bar, restaurant, or other non-essential service that was required to shut down for a specific period of time as a public safety measure as a result of the pandemic. This loss of work not just at the current job, but for all related businesses that could be potential employers for the individual, could cause significant financial hardship.
Can Landlords/Property Owners Participate in the Program?
Landlords or property owners are not required participate in the program. However, payments for rent will be sent directly to the housing provider. If the money is rejected by the housing provider, the money will then be sent directly to the renter/resident, to then use towards the balance of unpaid rent.
What properties are included in the federal eviction moratorium?
The eviction moratorium, now extended to January 31, 2021 applies to all rental properties
How Can a Landlord, or Property Manager, Apply for Rental Assistance for Their Tenants?
Landlords have the ability to help tenants/residents enroll in or apply for the program. This process can only be done with the tenant’s full understanding. The tenant must be fully informed on the rental assistance process and consent to the landlord submitting an application on their behalf.
Where you apply depends on local and state programs, and each individual should seek out their own local resources to determine the specific process necessary.
How Does This Support Landlords or Property Owners?
The new assistance program is designed to not just be for the relief of the tenant, but for the landlord who has not received monthly rent in full as a result of the pandemic. Rental assistance ensures that rent is being received. Additional help, carried over from the CARES Act, allows property owners to apply for financial assistance if COVID-19 put significant financial strain on them.
Navigating new bills or laws can be difficult, especially when updates must be made to accommodate an ever-changing situation. Check back for updates as new information is provided. We seek to take the burden off of property owners, following all updates closely to best serve both our clients, and their tenants.