As we keep hearing, these are unprecedented times. The Covid-19 crisis has led the government to take extraordinary measures to support the economy and protect people that have been impacted by the pandemic. For landlords, the various eviction holds that have been placed are amongst the most significant actions and a cause of confusion. Here’s a quick summary of the current restrictions and how to navigate them:
CARES ACT
On March 27, 2020, the CARES Act was signed. Section 4024(b) prohibits landlords of certain rental “covered dwellings” from initiating eviction proceedings or “charg[ing] fees, penalties, or other charges” against a tenant for the nonpayment of rent. These protections were put in place for 120 days from enactment (March 27, 2020).
What it means: The Cares Act prevented landlords from charging late fees, issuing non-payment notices or initiating evictions on any “Federally related properties”. This included properties backed by Fannie Mae and Freddie Mac as well as HUD (Section 8). *The recent CDC restrictions now include all residential properties…not just Federally related (see below).
ARIZONA EXECUTIVE ORDER
On March 24, 2020, Governor Ducey signed an executive order delaying writs of restitution for those effected by COVID-19. On July 16, 2020, the executive order extending the moratorium on residential evictions until October 31, 2020 for those effected by COVID-19. https://azgovernor.gov/governor/news/2020/07/governor-ducey-extends-covid-19-eviction-protections-expands-rental-assistance
What it means: Although a landlord can proceed with an eviction for non-payment, they will not be able to execute a writ of restitution (a constable lockout) to regain possession of the home if a tenant claims and hardship due to Covid-19. There are several criteria the tenant must meet to qualify, including applying for rental assistance from a government agency.
CDC EVICTION HALT
On September 1, 2020, the U.S. Centers for Disease Control and Prevention (“CDC”) released an Order titled “Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19” (the “Order”). The Order is effective Friday, September 4, 2020, and expires December 31, 2020. https://s3.amazonaws.com/public-inspection.federalregister.gov/2020-19654.pdf
What it means: Unlike that Cares Act or the Arizona Executive Order, the CDC Eviction Halt effectively applies to ALL residential properties in the country. A tenant is protected from being evicted if they sign a declaration stating certain hardships and give it to the landlord.
WHERE DO WE GO FROM HERE?
It’s important to note that none of the restrictions “cancels rent”. They do, however, prevent landlords from regaining possession by eviction if a hardship is claimed. Here’s what we recommend:
Communicate: Keep in regular communication with tenants that are behind on rent to understand their situation.
Offer flexible payment options: If the tenant isn’t able to pay the full rent amount during the crisis, then allowing partial payments is a good option. Steady payments made weekly, or every other week will allow the landlord to collect rental income, while ensuring the tenant doesn’t get too far behind (a win-win for both the landlord and your tenant).
Be sure to have the tenant sign a partial payment agreement if the amount being paid is less than the full amount owed. It’s also recommended that both parties (landlord and tenant) agree upon a payment schedule for the remaining balance and include that in the agreement.
Be careful: The penalties associated with violating the evictions restrictions are steep. If a tenant claims a hardship, then all eviction action should be stopped to avoid a possible violation until the holds are lifted.
Recommend Assistance: Many tenants don’t know where to seek assistance. Help them by providing information to programs that are available to them:
Arizona 211 (General assistance for food, paying bills and other essential services): https://211arizona.org/covid-19/
Short-term Crisis Services: https://des.az.gov/services/basic-needs/shelter-housing/short-term-crisis-services
Phoenix Human Services:https://www.phoenix.gov/humanservices, 1-866-882-1178
Phoenix & Maricopa Rental Assistance: https://www.needhelppayingbills.com/html/phoenix_rental_assistance.html
Utilities: https://www.maricopa.gov/451/Get-Help-Paying-Utility-Rental-Bills
Salvation Army: https://www.salvationarmyusa.org/usn/covid19/
Arizona Food Bank Network:http://www.azfoodbanks.org/index.php/covid-19
Arizona Department of Housing (Rental Assistance):https://www.saveourhomeaz.gov/ra/
Landlords are carrying a heavy burden during this crisis. Being familiar with the restrictions and thoughtful with your approach will help you navigate the challenges. Our team at Rentals America is always happy to answer any questions you have about the current eviction restrictions or the rental market.
