Make the CARES Act Eviction Moratorium Fair to Landlords

The eviction moratorium, which was extended several times by the federal government and some states, was meant to protect millions of renters who faced economic hardship due to the Covid-19 pandemic. However, this policy also had a negative impact on many small landlords, who rely on rental income to pay their mortgages, taxes, and maintenance costs.

According to the U.S. Census, the majority of the nation’s landlords are individual investors who own about 23 million units in 17 million properties. More than 6 million renter households are behind on rent, and the total estimated rent debt is just under $26.5 billion. While renters can apply for federal and state assistance programs, the distribution of funds has been slow and cumbersome, leaving many landlords in a financial bind.

Some landlords have challenged the legality of the eviction moratorium in court, arguing that it violates their property rights and contracts. However, the U.S. Supreme Court ruled that the moratorium could stay in place until July 31, 2021, when it expired. The Biden administration issued a new moratorium on August 3, 2021, targeting areas with high Covid-19 transmission rates, but it is also facing legal challenges and uncertainty.

While the eviction moratorium may have been justified as a public health measure, it also transferred the economic burden from tenants to landlords, without providing adequate compensation or relief. This could have long-term consequences for the housing market, as some landlords may be forced to sell their properties, reduce their investments, or raise their rents in the future.

What can small landlords do to cope with the situation and protect their interests? Here are some possible options:

• Apply for mortgage forbearance or modification. Some lenders may offer temporary relief or lower payments for landlords who are struggling to make their mortgage payments due to the eviction moratorium. Landlords should contact their lenders and explain their situation, and ask for any available options. However, they should also be aware of the terms and conditions of any forbearance or modification agreement, and how it may affect their credit score or future payments.

• Negotiate with tenants and seek rental assistance. Landlords should communicate with their tenants and try to reach a mutually beneficial arrangement, such as a payment plan, a rent reduction, or a lease termination. Landlords should also encourage their tenants to apply for rental assistance programs, and cooperate with them in the application process. Landlords can also apply for rental assistance on behalf of their tenants, with their consent. Landlords should keep records of all communications and agreements with their tenants, and follow the legal procedures for eviction if necessary.

• Seek legal advice and representation. Landlords should consult with a lawyer who specializes in landlord-tenant law and bankruptcy law, and who can advise them on their rights and obligations, and represent them in court if needed. Landlords may be able to sue the government for compensation for the takings of their property rights, or file for bankruptcy protection if they are unable to pay their debts. However, these options may have costs and risks, and may not guarantee a favorable outcome. Therefore, landlords should weigh the pros and cons of each option carefully, and seek professional guidance.