Evictions and COVID-19

One of the topics that we have seen discussed lately is often an explanation of who qualifies for the eviction moratorium and what it means.  We are hoping to give some ideas of how to actually handle evictions at this time.  Please note: We are not attorneys and this not legal advice. These are targeted mostly in counties around the Atlanta area.  Finding a property manager in your area that understands the individual challenges of your area can be a life saver as none of the 6 metro counties in our area are treating evictions the same way.  Running it past an attorney in your area that handles evictions is a good idea as well.

 

Background (Skip to the next section if you are familiar with the eviction moratorium)

To respond to the situation of COVID-19, the Federal, state, and local governments have taken actions, including restrictions on travel, stay-at-home order, and the eviction moratorium.  These are seen as ways to protect people from the spread of the virus. The eviction moratorium has increased the liability for landlords in general.  Evicting tenants that are not supposed to be can incur fines from $100,000 to $500,000 and up to a year in jail. In practice, it is still unclear if the fines will go to the individual owner, an LLC, the property manager, or all of the above.  We are proceeding as if it is all of the above.

The moratorium originated on September 4, 2020, the CDC Director issued an Order temporarily halting evictions in the United States. Through later orders the moratorium has extended until March 31, 2021 and there is a big possibility for it to be extended further.

This Order is a temporary eviction moratorium to prevent the further spread of COVID-19. This Order does not relieve any individual of any obligation to pay rent, make a housing payment, or comply with any other obligation that the individual may have under a tenancy, lease, or similar contract. Nothing in this Order precludes the charging or collecting of fees, penalties, or interest as a result of the failure to pay rent or other housing payment on a timely basis, under the terms of the signed contract. If any violation of the lease gets done, there is a case of non-payment or expiration of the lease, these are rightful basis for eviction.

Those covered by this Order are those who present a declaration under penalty of perjury indicating that:

1.       The individual has used best efforts to obtain all available government assistance for rent or housing.
2.       The individual either (i) expects to earn no more than $99,000 in annual income for Calendar Year 2021 (or no more than $198,000 if filing a joint tax return), (ii) was not required to report any income in 2020 to the U.S. Internal Revenue Service, or (iii) received an Economic Impact Payment (stimulus check) pursuant to Section 2201 of the CARES Act.
3.       The individual is unable to pay the full rent or make a full housing payment due to substantial loss of household income, loss of compensable hours of work or wages, a lay-off, or extraordinary out-of-pocket medical expenses.
4.       The individual is using best efforts to make timely partial payments that are as close to the full payment as the individual’s circumstances may permit, taking into account other nondiscretionary expenses.
5.       Eviction would likely render the individual homeless – or force the individual to move into and live in close quarters in a new congregate or shared living setting – because the individual has no other available housing options.  

 

How to handle non-paying tenants

The number one way of handling non-paying tenants is to help them pay their rent.  At Citiside, we work extensively with Section8 and Housing Voucher programs.  These tenants have been far less affected when it comes to falling behind on their rent in our portfolio.  We have also established relationships with over a dozen aid organizations that we provide to tenants when they are falling behind.  In 2020, we received over $60k from these organizations.

When someone has fallen behind, we follow our normal collections calendar. While the moratorium does not allow you to physically evict someone right now, it does not stop the filing of the paperwork.  There will be a backlog of cases when the moratorium ends and you will want to get ahead of it.

An important note, the moratorium applies to people affected by COVID-19 so they can’t pay rent.  It does not give people the right to hold over once their lease has expired or for someone violating a lease in another way.  If you find someone has started a meth-lab in the basement of a house, you can still evict this person.  COVID was not the reason they are violating their lease.

Once an eviction has been filed, we do everything we can to get the tenant on a court consented payment plan.  This is a plan that is filed with the court and signed off by the judge.  Generally, when these are filed, tenants have not been filing a CDC affidavit.  If they miss a payment on the payment plan, a writ of possession can be immediately filed for.  NOTE: We still treat any tenant that has mentioned COVID as a reason for falling behind in a call, email, or text as if they have filed the affidavit.

Another thing that some tenants that have tried to game the system and don’t understand how things work have done, is they neglect to answer the dispossessory when they get served.  If they fail to answer the dispossessory, they have obviously not given a CDC affidavit and can be evicted.

The last situation that we have dealt with is someone answers the dispossessory and gets a court date.  Whether they file the affidavit or just mention COVID to the judge, it has been handled the same way.  The case will be decided upon the same as in the past.  The drawback is that we can’t file for the writ of possession to get the property until April 1st (when the moratorium is up…assuming no extensions).

This is how we are operating in the counties that are operating.  Cases are still delayed about a month for setting a court date if the county is doing court dates at all.  There are still counties that have not scheduled court dates on evictions that were filed in the summer of 2020. 

We hope this helps and can give you some food for thought on how you will handle evictions.  Remember, NUMBER ONE is to find a way to help the tenants get their rent paid.  Our largest check so far is $9k for a single tenant.