It’s been notable that the evictions moratorium that lasted since early last year, is coming to a definitive end by the end of August.
The ban was originally put in place to prevent any more evictions due to major housing shortages in major cities like New York City or Los Angeles. The cities have been experiencing an unimaginable rent hike and are among the most expensive places to live in America.
The ban was also meant to mitigate further spread of COVID-19 & any potential surges in homelessness.
In order to avoid future evictions, the Biden administration had promised a number of changes, including providing legal assistance for tenants facing eviction. This is to make sure no one will be priced out of their homes because they simply cannot afford their rent increases.
But, this new law will not help those who are already at risk of being or have already been evicted before October 1st due to the lack of affordable housing in major cities. Financial Analyst Meet Kevin made a video recently to cover the issue elaborating on tenant/landlord relationships & the growth of real estate inventory.
There’s a lot of back & forth between the CDC, the Supreme Courts, the federal/state government, landlords, & tenants. There is huge debate whether this is ideal during a time of remerging COVID & economic uncertainty.
Whatever the moral stance or justification is, what happens next?
What does this mean for tenants & landlords?
The landlord and tenant relationship is one that has existed for centuries. The agreement between parties consists of a rental payment, security deposit (if applicable), and on what is expected from each party.
But what happens when there is an emergency that can’t be helped by the tenant? Is the landlord obligated to help the tenant?
In most cases, landlords are required to aid their tenants in certain emergencies. This requires that they have knowledge of their tenants’ living situation and be aware of any chronic issues they may have such as mental health or addiction.
Tenants are not obligated to pay rent in an emergency situation under the current circumstances unless there was a contract stating otherwise.
But since this ban has ended, it’s time for homeowners & tenants to react. The government may not be readily available to help either party due to nationwide demand to confront many related-cases.
At this point, it may be up to the people involved in housing to determine their next course of action.
This is a drastic measure, but a known consequence when there is failure to pay rent. There’s consequences for the tenant in housing uncertainty, & consequences for the landlord who is unable to receive rent payments that may cover mortgage costs & other expenses.
Plus, the landlord would have to find another tenant to fill in the spot of reliable financial stability & good character. That could be months before landlords could find someone worthy & months of no income from a rental property.
This is a massive headache for all parties involved with severe economic effects.
Landlords need to give tenants at least 60-days notice to evict them for non-payment of rent or as a result of foreclosure or bankruptcy proceedings. Tenants without a lease also need to receive this notice before they are evicted. Evictions can also only happen once per year as opposed to 3 times per year before the tenant could challenge the eviction in court.
There could easily be a lot of back & forth between landlords & tenants.
Evictions would be harder to enforce if there is relative distance between the landlord & where their property is located (imagine living in NJ owning a property in California).
How cooperative a tenant may be another added benefit or hurdle based off their personality & life circumstance.
There’s been programs put in place from the government to manage this larger issue facing the nation. The Department of Treasury would get
However, according to The Wall Street Journal there has been delays in getting payments to landlords who need them most.
Since December, Congress has appropriated a total of $46.6 billion to help tenants who were behind on their rent. As of July 31, just $4.7 billion had been distributed to landlords and tenants.
These delays may be due to the huge flow of government infrastructure to make this program run smoothly. Examples include staff issues, hours of operations limitations, state/county variability, & demand for payments.
It seems like the slow pace of rental relief may not immediately address the growing concern for tenants or landlords.
A lot of what has happened in real estate is unprecedented, especially the evictions ban. A lot of tenet/landlord relationships are built on contract/leasing agreements usually without stipulations.
However, in these unprecedented times, landlords & tenants can make accommodations. Both parties are in direct contact with one another & more likely to benefit with each other than having to involve third parties like government officials or legal teams.
It’s important as a tenant to have a relationship with the landlord. Like, it is important for the landlord to have a relationship with the tenant.
They can make agreements such as lower monthly rent payments, a payback later plan, or a pause in payments under some agreements like finding employment & paying X amount.
This really depends on the kind of people tenants & landlords are as well as how their relationship functions.
Since both of their financials & well-being are on the line, it would make more sense to figure out what to do together than sorting to evictions or receiving no rental payments.
Sell The Property?
In a competitive real estate market as today, would it be worthwhile it sell a rental property whether its tenants are paying rent or not?
It depends. A landlord can sell the property altogether & let the buyer do whatever they want with it. Sometimes the costs of owning a rental property aren’t worth the returns. It would be favorable to sell a property instead when buyers are willing to pay above asking price.
It’s possible the buyer can still us the property for rental income, or to live in it, repurpose it outside of living, or break it down to build something else.
This would be ideal for a landlord whose at odds with no stable rental income coming in. This is less than ideal for the renters market when landlords decide to reinvent & increase their rent prices.
This ban is pivotal for the financial system as tenants rely on their housing for economic stability. Landlords especially are at odds because their finances being tied to equity, debt, & financial institutions. This can cause ripple effects to the economy not yet immediately felt.
It’s a matter of time before financial experts come together to discuss this openly to determine the right monetary policies for affected Americans to get through this.
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