Updated November 2021
As COVID-19 continues to play a role in how you do business as a landlord, you’ve likely gotten more accustomed to how eviction and foreclosure moratoriums have been used over the last year to help renters, homeowners, and landlords navigate the pandemic.
Multiple phases of the moratorium on evictions have been implemented, renewed, and extended during the pandemic, and understanding the current eviction moratorium status can be confusing.
What are the terms of any remaining or updated moratoriums? How are they going to affect your business? What types of protections can you expect to see?
These are unprecedented times to be a landlord, and we’re here to help make sense of these confusing updates. Let’s break it down together.
A Table Of Contents For The Eviction Moratorium
For landlords, eviction moratorium rules, deadlines, and effects continue to play a large part in how you do business. Stay updated on what’s happening and what you can do to succeed with eviction and foreclosure moratoriums at play:
- The Updated Eviction Moratorium
- The Foreclosure Moratorium Has Expired
- Moratoriums & Landlords: How You Were Affected
- Continue Protecting Your Business
- Eviction Moratorium: Landlord’s FAQs
- Moving Forward
The Updated Eviction Moratorium
The statuses of both eviction and foreclosure moratoriums have been in flux over the last year. Deadlines have been extended multiple times, so it can be difficult to know exactly what the current situation is. Learn more about what’s happening today below.
The Federal Eviction Moratorium
As of September 30, 2021, the eviction moratorium end date was reached and the federal moratorium on evictions is no longer in effect. On the national scale, the CDC, HHS, and Department of Housing and Urban Development are no longer recommending or requiring that evictions be placed on hold. This is largely due to pressure from the Supreme Court to end the federal moratorium, and it does not currently seem that any halts on evictions will be added at the national level.
Despite negative feedback from some sectors of the public on this decision and even from organizations like the Department of Housing and Urban Development, most landlords feel it was appropriate for the moratorium to end.
Many regions require a few additional weeks before eviction cases can be filed again, but that varies. Overall, this means there are no longer any federal restrictions on evictions of tenants affected by the COVID-19 pandemic.
That being said, there are still several differences at the local and state levels that must be considered as a landlord. You’ll want to ensure that you are aware of these specific limitations as you continue your rental business.
The Expired Moratorium
Though the federal eviction moratorium has expired, landlords affected by moratoriums at the state or local level or who are curious about the specifics of the federal moratorium may still want to read more into the expired order. The information below is not currently affecting landlords but can still be beneficial for these reasons.
If, in the future, a government organization extends eviction, we will work to update this article again.
Through actions by the CDC, the FHFA, and the Department of Housing and Urban Development, an updated eviction and foreclosure moratorium was in effect through December 31, 2020.
The CDC and HHS issued an order to halt evictions through the end of 2020 in specific cases. This order did not apply in areas where state or local eviction moratoriums were just as strict as the details of the CDC’s order. The order was officially published on September 4th and ultimately extended until September 30, 2021.
Here’s what the moratorium included:
- It halted the eviction of any covered individual until its official expiration.
- It included limitations on who is a covered individual.
- It did not remove the obligation to pay back rent at a later date.
- It did not remove the ability to charge late fees or penalties.
- It did not allow tenants to break their lease outside of the nonpayment of rent.
To qualify under this eviction moratorium, the tenant was required to:
- Apply for all applicable government assistance programs for rent or housing
- Fit one of the following categories:
- Make less than $99,000 per year
- Do not have to report income to the IRS
- Receive an Economic Stimulus Check under the CARES Act
- Be unable to pay the complete rent due to substantial loss of work or medical expenses
- Be making their best attempt to pay as much rent as possible
- Have nowhere else to go; would be homeless or in a shared living setting if evicted
Any tenant who believed they were a covered individual filled out the CDC’s declaration form and gave it to you, the landlord. This form provided the necessary information to prove the tenant was a covered individual. Each adult on the lease contract had to fill one out.
Once the sworn declaration was given to the landlord, the CDC’s order said that you were no longer permitted to evict the tenant for nonpayment of rent. Tenants could still be evicted for other reasons.
Ongoing Moratoriums: State And Local Level
As mentioned, some states, counties, and cities are creating orders that extend eviction filings to protect tenants still suffering due to the effects of the COVID-19 pandemic.
Los Angeles County, for example, has placed a stay on evictions through early 2022. Certain cities are not renewing the moratorium, but they are also not allowing new eviction filings until mid to late October, to give tenants and landlords a bit more time to work things out.
Make sure to check your local county websites to find out the specifics of any remaining eviction moratoriums that may affect how you should carry on with business.
The Foreclosure Moratorium Has Expired
The Federal Housing Administration and HUD worked together to extend the foreclosure moratorium, but it ultimately ended on July 31, 2021, for most federally backed mortgages.
While in effect, the moratorium established the following:
- Foreclosure actions could be pursued on any FHA-insured single-family properties
- Homeowners with a Federal Housing Administration-insured mortgage could request continued mortgage forbearance with the option to extend for one additional year
- Lump sums could not be required on FHA-insured mortgages after the forbearance ended
This moratorium did not apply to private mortgages, but many lenders followed similar guidance with their own programs.
Moratoriums & Landlords: How You Were Affected
While the mortgage forbearance program was beneficial to some landlords, there is no doubt that the eviction moratorium made business difficult for many others. The CDC acted in their best interest, intended to help prevent a public health crisis, but the moratorium did not provide much additional support for landlords.
If you had tenants who were covered under the eviction moratorium, there was a good chance you had to go weeks or months without receiving rent.
So, how did landlords pay their mortgage during the eviction moratorium? Most continued to be able to make payments even without income from their tenants. Others utilized the foreclosure moratorium to protect their assets.
By this point in the pandemic, you are probably well aware of what your tenants can and cannot handle. Landlords with tenants who are already behind on or not paying rent are likely to see that situation continue even after the moratorium has ended. If you are one of those landlords, it’s time to prepare.
Continue Protecting Your Business
Though federal moratoriums have officially ended, there are still many ways in which you may need to protect your business.
Connect With Lenders
Were you eligible for mortgage forbearance on an FHA-backed mortgage? Is the private lender funding your mortgage still offering extended forbearance? Find out and make sure you are aware of what is going on with your mortgages if you have any active ones.
Most lenders are continuing to offer some type of relief, but you may need to call them directly to put that relief into action. It’s important to take advantage of the protections you can get through a forbearance during these difficult times.
Streamline Your Costs
Budgeting and paying close attention to your bottom line and rainy day fund during this time is very important. While not all of your tenants are going to continue to struggle to pay rent, there is a chance you will continue to miss out on expected income during this time.
Keep a close eye on your finances. Streamline costs where you can, and consider your situation very carefully before expanding your investments at this time.
Record-Keep The Rent
Your business plan already includes clear tracking of rental payments, but that tracking needs to be more accurate than ever during this time.
If you have covered tenants who are not able to pay the full amount or aren’t paying any rent at all, you will want to make sure you are keeping a clear and accurate record of every detail. Down the line, you may still need to file an eviction suit if the tenant does not pay back what they owe.
Keeping full and complete details is always important during an eviction case, but those details are likely to be even more important post-moratorium. This confusing time is unprecedented, so ensure your record-keeping is as detailed as possible.
Start Pursuing Eviction
If permitted, it is time to start pursuing eviction in your area, particularly for tenants who have not been paying rent for a year or more. While it is okay to be empathetic during these difficult times, tenants who have not yet found other support to help them make rent payments can no longer remain your tenants.
Find out when evictions can be filed again in your area, and communicate to your tenant in advance that you plan to pursue this route. This will give them one final chance to find another solution while still allowing you to continue running your business.
Continue To Pursue Eviction For Other Reasons
If you have tenants who are breaking their lease for reasons other than nonpayment of rent, you are still permitted to pursue eviction at this time according to the CDC’s order. Tenants who are breaking the law or otherwise doing something eviction-worthy on your property can be evicted.
What To Do When Tenants Can’t Pay
If your tenants are in a situation where they are not able to pay you the complete monthly rent, it’s going to be a trying situation for you both. Any remaining foreclosure moratoriums can help to decrease your monthly expenses, but they will not be eliminated completely. Eventually, your tenant will be responsible for paying you back.
Knowing the resources that are available to tenants at this time is a great way to keep things moving between both parties.
Read up on the following in your area, and pass along the information to your tenants as needed:
- Cities that received government grants may be using them for rental assistance programs
- Housing assistance programs may offer to fund renters struggling at this time
- The HUD resource portal may provide assistance
- Local non-profits may be running rental relief programs
The best way to find out about these programs is to research online and reach out to your local county health and government boards. These organizations should have the details on what is available locally, and you can help connect your tenants with that information.
It can be frustrating at this time to be shouldered with tenants who may or may not be doing all they can to resume paying rent. Even with the best support, not all tenants are going to follow through on their obligations.
Moving forward, it will continue to be essential to do thorough tenant screenings, to carefully ensure you find great tenants who fit well with your rental property. Utilizing tenant screening services from us here at RentPrep is a great way to streamline your process while keeping it as effective as possible. Find out more on our tenant screening page today.
Eviction Moratorium: Landlord’s FAQs
When will foreclosures resume?
The federal foreclosure moratorium expired on July 31, 2021. While some private lenders extended their own moratoriums, most mortgage providers are continuing to transition back to a normal state of business.
Foreclosures are not happening immediately, in most cases. National guidance requires mortgage providers to give up to 120 days to the lendee to establish a loss mitigation plan.
If you were utilizing the foreclosure moratorium to assist you in making ends meet during the pandemic, it’s time to contact your lender and make plans for moving forward.
Will the foreclosure moratorium be extended?
As of now, there do not seem to be any plans to implement another foreclosure moratorium. While some private lenders, credit unions, and local jurisdictions may implement foreclosure protections, these are likely to be seen on a much smaller scale than the national moratorium orders.
If you are struggling to keep up with your mortgage payments due to COVID-19 now that the moratorium has expired, it is time to reach out to your lender. Talk with them about your issues and see what types of loss mitigation plans they are willing to set you up with. Despite the moratorium being over, your lender may still be willing to help you through this trying situation.
For how long were foreclosures suspended?
Foreclosures were suspended for more than one year during the worst of the COVID-19 pandemic, and some lenders have suspended them for even longer. Specific states and jurisdictions, in some cases, are also continuing to prevent foreclosures from occurring at this time.
Though there has been a small rise in the number of foreclosures since the moratorium expired, the number is not significantly higher than what is usually seen around this time of year. For that reason, financial analysts are happy to see that the moratorium seems to have helped homeowners and property owners stay in their homes despite the pandemic, just as intended by federal organizations.
Can a homeowner be evicted?
Homeowners cannot be evicted from their home, but they can be forced to move out of their property if it is foreclosed on. Foreclosure occurs when the mortgage backer is not being paid, so they take control of the property and sell it to recoup their losses. In this situation, a homeowner would have to leave, but this is not technically the same thing as an eviction.
Eviction is when a property owner, such as a landlord or homeowner, files to have a roommate or tenant removed from the property for breaking the rules of their agreement. The reasons for eviction can include destruction of property, nonpayment of rent, and a number of other things.
Not paying off your mortgage is similar to not paying rent, but it is not technically an eviction when a home is foreclosed on. Regardless, the end result is the same, and the individual cannot stay at the property.
Has there been a rise in evictions after the moratorium?
So far, most analysts agree that it is still too early to tell if there will be a wave of evictions directly caused by the end of the COVID-19 eviction moratorium at the end of September. There has not been an immediate rise in the number of reported eviction filings, but it is important to remember that some court systems still have a stay on processing evictions at this time.
Likely, there won’t be clear evidence about whether or not the eviction moratorium expiring will lead to a large number of evictions. Hopefully, tenants seriously affected by the pandemic have been able to find a solution to paying rent by this time, thanks to the period when the moratorium was in effect.
While the foreclosure moratorium issued by the FHFA and HUD was similar to what we saw in the CARES Act, the CDC order was something brand new and unlike anything we have seen before. Many landlords and rental experts faced a situation unlike anything they have seen, and it may have been a very tough time for you.
As the moratoriums expire, make sure to keep an eye on developing news around the order. This will enable you to make plans on how you will manage your business with the order in effect.
Work with your tenants as much as possible to keep rent moving between you. At this time, we must find ways to keep moving forward. As you go, continue to document everything to make sure you can get paid back what you are rightfully owed down the line.