New executive orders have landlords in Washington DC and across the country wondering when, or if, relief from non-paying tenants will ever come. Recently, the POTUS signed an order to extend the eviction moratorium on residential properties. Therefore, at least for now, the light at the end of the tunnel is a little further away. So, as landlords and property owners struggle, continue reading below as we review the current moratorium restrictions affecting Washington DC.
How are Landlord’s Affected by the Eviction Moratorium
Many tenant advocate groups argue that the eviction moratorium is necessary to protect those affected by the pandemic. However, it’s the landlord who is taking the brunt of the hardship, as the moratorium disproportionately impacts small landlords. People often assume that landlords are in a lucrative financial situation and don’t consider that they have their own bills to pay. Although many landlords are not receiving rent, they still have property taxes, utilities, and property maintenance costs to consider. Additionally, the loss of income from rental properties has put many small landlords behind on their personal responsibilities such as mortgages and everyday expenses. However, as the eviction ban continues, many landlords are faced with losing their investment properties or having to sell to avoid falling further behind.
What are the Current Moratorium Restrictions on Evictions?
Recently, the CDC eviction moratorium restrictions were extended until at least March 31, 2021. In other words, tenants across the nation will continue to be protected from eviction for the time being. For landlords in Washington DC, we recommend reaching out to a qualified attorney before attempting any eviction. Thanks to ever-changing restrictions and requirements, it is easy for independent landlords to misstep and risk a legal or financial penalty.
In Washington DC, courts are reopening under CDC guidelines and hearing cases both in-person and virtually. Check out these important aspects of the moratorium guidelines below from the National Apartment Association’s website.
- All Non-Payment and Lease Violation Evictions Suspended
- Eviction Moratorium Remains in Effect Until the End of the Public Health Emergency
- Residents are Still Responsible for Rent
- A COVID-19 Related Impact is Not Required
Who Qualifies for Protection Under the Current Moratorium Guidelines?
Below is a list of common pandemic-related issues that tenants face. The Federal Eviction Moratorium protects these tenants from being removed from their rental based on any of the following circumstances. That said, as a result of the Mayor’s order, all evictions in Washington DC have currently stayed. For more information regarding updates on eviction matters in the Washington DC District Court, check out their website.
- Tenants making their best efforts to obtain emergency or government housing assistance.
- Individuals who use their best efforts to make partial rental payments promptly.
- Residents who cannot pay the full rental rate due to job loss or other pandemic-related loss of income.
- Any persons who would become homeless or forced to move into shared housing if evicted.
Additional Tenant Requirements Under the Federal Eviction Moratorium Guidelines
- Tenants who earn less than $99,000 as an individual or $198,000 if filing 2020 taxes jointly.
- Residents who were not required to report any income to the IRS in 2019.
- Tenants that have received an Economic Impact Payment under the CARES Act.
Tips to Mitigate Eviction Moratorium Financial Hardship
While the current moratorium restrictions do a lot to protect tenants, where does that leave landlords? “It is a difficult time to be a landlord in DC right now if you have a tenant who is unable to pay the rent due to the pandemic,” said Nicholas Stone, President of Bay Property Management Group Washington, DC. “Government funds are available for rent relief and are accessible to tenants and landlords. Work with your tenants to create payment plans and help them apply for any available rental assistance programs.”
So, when eviction is not an option, turning to other alternatives may help bridge the financial gap many landlords face. Consider the following options –
- Keep Communication Lines Open and Negotiate
- Postpone the Rent
- Reduce the Rent
- Research Government Assistance
Keep Communication Lines Open and Negotiate
Communication is a critical part of being a landlord and especially a successful one. Therefore, if your tenants have otherwise been model leaseholders, it may be to your benefit to keep them. So, if payments were missed during the pandemic, reaching out to inquire about the tenant’s situation is a good place to start. Once a landlord is aware of the tenant’s financial or employment hardship, try to create a mutually beneficial payment plan to ease both parties’ stress. Communicate with the tenants to see how much they can realistically afford. Then, draw up a payment arrangement in writing for both parties to sign.
Postpone the Rent
Depending on a landlord’s personal situation, postponing rent for a short time might help tenants catch up. If the tenants have lost employment, delaying a rent payment, even for one or two months, could significantly help. Additionally, creating an agreement to postpone and repay the rent is better than the tenants just not paying or communicating at all. Plus, an owner’s willingness to work with a tenant’s situation helps them want to help you in return. So, just as you would with any agreement, ensure the details are in writing to avoid any disputes or miscommunication.
Reduce the Rent
Ideally, your rental price includes a certain amount of profit each month above and beyond what is needed to cover expenses. So, if that is the case, consider reducing the rent as a way to assist financially strapped tenants. For example, if the rental rate is $1500 per month, but an owner only needs $1100 to cover the mortgage and expenses, consider negotiating with the tenant to pay the lower amount for a short time. Keep in mind, when the mortgage is due, receiving any money from tenants is better than nothing. Thus, a temporary reduction in the rent could help tenants from falling even further behind.
Research Government Assistance
Through the CARES Act, Economic Security Act, and Coronavirus Aid, landlords and tenants may be able to find emergency financial assistance to cover expenses. As a landlord, helping your tenants find government assistance programs is also in your best interest. So, communicate with tenants and ensure they know what programs are out there if or when they may need assistance.
Furthermore, if Fannie Mae or Freddie Mac owns the property’s mortgage, owners may delay making payments for a period of time without incurring added fees or a credit score penalty. So, check with your lender to see what options there are if you are facing financial hardship. Besides, a foreclosure moratorium remains in effect along with the stay of eviction order. Take a look at the current moratorium restrictions on foreclosures below –
- Foreclosure moratorium extended through June 30, 2021
- Mortgage payment forbearance enrollment window extended until June 30, 2021
- Up to six months of additional mortgage payment forbearance, in three-month increments, for borrowers who entered forbearance on or before June 30, 2020.
What is The Best Way to Navigate Changing Eviction Regulations?
The best way to keep up with changing laws and ensure your interests as a landlord are protected is to hire a local property manager in Washington DC. The trusted experts at Bay Property Management Group help guide owners through COVID’s current moratorium restrictions and negotiate with tenants to find a solution to non-payment issues. So, if you need help keeping your rental property business as profitable as it can be during this trying time, reach out to Bay Property Management Group to see what full-service rental management can do for you!