Understanding Your Options As A Renter Or Landlord During COVID-19

As the repercussions of the COVID-19 outbreak continue to ripple through the American economy, millions of renters are struggling to pay rent. By the end of March, 6.6 million Americans had applied for unemployment benefits while a similar amount hadn’t yet started the application process yet — and millions more have lost their jobs since then.

As employers outline their responsibilities during COVID-19, many tenants and landlords alike are now left asking the same question: where do we stand? Landlords are wondering whether they will be paid the rent they are owed and meet their own mortgage payments as a result. Tenants, on the other hand, are flustering for a way to stay afloat and are worried about the potential consequences of not being able to afford rent.

Advice For Tenants: Don’t Just Stop Paying, Have The Conversation

While there are countrywide eviction moratoriums in place that are stopping most renters from eviction, this doesn’t necessarily mean that tenants don’t have to pay rent or abide by the terms of their rental contract. If you are worried about making your rental payments in the coming months, a great first step is to have a conversation with your landlord. There has been a temporary stay on the charging of late fees, which means if you cannot make your rental payments by the agreed date, you cannot be charged provided it is still in the temporary moratorium period.

For as long as the moratorium period is in effect, these guidelines are seen as legal obligations of your landlord, similar to a landlord’s obligations to provide accessible housing where it’s needed. After this ends, your landlord can issue a vacation notice should you still be unable to meet rental obligations. Under the regulations, tenants would be given 30 days from the issuance of vacation notice to vacate.

Advice For Tenants: Research Your State’s Local Legislation On Rental Evictions

If your landlord has a federally backed loan such as those from Fannie Mac, Freddie Mac, and USDA, the general consensus is that evictions and mortgage payments are being halted. However, individual states have also been announcing individual relief measures for their renters and landlords, so it is worth checking your state’s website for its relief programs and more importantly, the qualifying conditions. For instance, in California, all evictions have been halted until May 31, according to orders by Governor Gavin Newsom. However, in Indiana, no residential tenant eviction proceedings can be initiated until April 5, but residents are still expected to keep up with their payments.

Individual state guidelines will also direct you on the next steps if you’re unable to afford rent during the allocated period or beyond it. Meanwhile, while you are in the state outline relief period, regulations stipulate that your landlord cannot change the locks or disconnect utilities without a court order. However, it is also a good idea to inform your landlord about any late payments you’re anticipating or to come to an agreement, such as partial payment or increased rental payments in the future.

Advice For Landlords: Clarify Your Mortgage And Foreclosure Deferral Options 

The popular opinion is that homeowners have received the better end of the bargain, thanks to the $2 trillion rescue package announced by the U.S. administration. The two major relief options now available to homeowners are a 60-day block of foreclosure proceedings and the option to defer mortgage payments for 180 days. Freddie Mac is also offering relief option to multifamily landlords, allowing them to defer payments for 90 days.

To access the government mortgage relief program and determine your eligibility, the HomeOwnership website or hotline can help. The website provides a comprehensive list of homeowner options available, including private banks and lending institutions that are also backing the initiative. For landlords and homeowners, bear in mind that your missed mortgage payments are still incurring interest and added onto the end of your borrowing term.

Advice For Tenants And Landlords: Find Out About State Offered Rental Relief Funds

With an estimated 40 million renters not being covered by federally backed relief programs, individual states and lenders have also begun to establish other forms of relief, such as Arizona’s $5 million rental assistance fund. These programs are an attractive option for both landlords and tenants since rent freezes or deferrals are essentially only delaying the inevitable. After the moratorium period expires, rental and mortgage payments are still to be made. Yet with millions out of employment and $49.4 billion owed in rent across the country as of April 1, the chances of that happening look very slim. As a result, landlords and tenants will be back in the same position as before with added debt.

This is such an uncertain time for everyone. From the drastic changes to everyday life to the uncertainty and worry surrounding renters and landlords, it can be quite overwhelming. However, a good first step is always getting informed about your options going forward.