Landlord Protections During & After Eviction Moratorium

When the CDC Director Dr. Rochelle Walensky extended the eviction moratorium another month to July 31, renters across America released a collective sigh of relief. Their landlords, on the other hand, probably let out a sigh of frustration.

A moratorium first went into effect on March 27, 2020, through the CARES Act. While that moratorium ended on July 24 of that year, the Centers for Disease Control and Prevention instituted a moratorium that began Sept. 4, 2020 and was originally scheduled to end Dec. 31. Since that time, the termination date has been repeatedly extended, now through July 31, 2021, leaving some property owners without rent payments for more than a year.

Pennsylvania’s state moratorium ended Aug. 31, 2020.

Is Assistance Available for Landlords?

Most government aid during the pandemic has been tailored to individual renters and homeowners, but there are programs that landlords can access as well, in some cases indirectly.

Here are some methods landlords and property owners can use for financial relief:

• The Consolidated Appropriations Act of 2021 provided about $569 million to establish an emergency rental assistance program (ERAP) in Pennsylvania, which helps tenants pay their monthly rent, including past rent due. Landlords can benefit from the program by encouraging their qualifying tenants to apply. Landlords can apply on behalf of the tenant, with their permission and signature on the application. On Feb. 5, 2021, Gov. Tom Wolf designated the Department of Human Services (DHS) as the agency overseeing the administration of ERAP. Residents of Dauphin County can apply online. Those in danger of being evicted should call the HELP office at Christian Churches United at (717) 238-2851.
• Landlords and property owners can negotiate with their tenants on how much they are able to pay each month toward their rent. Something is better than nothing.
• If the property owner has a mortgage on the rental property, they can work with their bank to restructure the debt. Like an individual homeowner, they also can apply for available forbearance programs.
• The Paycheck Protection Program allows eligible small businesses, including rental property owners, to borrow the lesser of $10 million or 2.5 times the amount of their average monthly payroll expenses to cover costs associated with payroll, mortgage interest, and utilities. The program can greatly help the bottom line.
• The Small Business Administration also offers disaster assistance loans with fewer restrictions during the COVID-19 pandemic. You can borrow up to $2 million for expenses you would have been able to pay if the pandemic had not occurred. Qualifying expenses include fixed debts, accounts payable, payroll, and other bills.
• The CARES Act offers new tax provisions that can help small businesses, including rental properties.  Tax returns from 2018, 2019, and 2020 can be amended to distribute net operating losses across a period of up to five years, with no taxable income limit.
• Landlords can take a tenant to court if they believe the tenant lied about their financial circumstances on their moratorium Declaration.
• The Moratorium only applies to evictions based on a failure of the tenant to pay rent
• The Moratorium does not apply to evictions based on: criminal activity by the tenant or their guests; the tenant damaging or posing a significant risk of damage to the property; the tenant violating health, building, or other regulations relating to health and safety; and the tenant violating lease provisions, other than those relating to payment of rent and similar related payments.
• The Moratorium does not extend the length of a lease.  If the lease has expired and the tenant refuses to leave, a landlord can evict.

Additional Landlord Rights

While the initial eviction moratorium in the CARES Act prohibited a landlord from assessing late fees and other penalties, the subsequent orders from the CDC did not. You may sue for past rent and other fees if a tenant is unable to begin paying rent when the eviction pause ends.

Evictions are moving forward, despite the moratorium, for cases based on issues other than nonpayment. Landlords can begin the eviction process for those engaging in criminal activity in the home, violating building codes or health ordinances, or threatening the health and safety of other residents. The landlord files an eviction complaint at the local magisterial district court where the property is located.

If you are a landlord or tenant needing to begin eviction procedures, you will benefit from the guidance and knowledge of one of our highly trained attorneys at Scaringi Law.

The Purpose of Eviction Moratoriums

During the pause on evictions, renters cannot be kicked out of their homes for nonpayment of rent so long as they had completed and returned the program’s Declaration to the landlord, property owner, or other person responsible for collecting rent. The purpose is to enable people to shelter in place and quarantine should they become sick or have a medical condition that leaves them highly vulnerable to infection. The moratorium also helps keep people out of homeless shelters, which had shown an increased risk of virus spread and illness.

The federal order was specifically for residential tenants, but commercial tenants potentially received some assistance through the Paycheck Protection Program, established by the federal government. Some of those funds could be used to pay rent.

Is the Moratorium a Free Ride for Renters?

The moratorium does not forgive the tenant’s obligation to pay rent. Plus, persons can still be evicted for reasons other than not paying rent.

Do Renters Have Responsibilities During the Moratorium?

Yes, renters must meet certain criteria to be shielded from eviction.

A tenant must demonstrate the following:

• Put forth their best efforts to obtain all available government assistance for rent or housing
• Expects to earn no more than $99,000 in annual income for Calendar Year 2020 (or no more than $198,000 if filing a joint tax return), was not required to report any income in 2019 to the IRS, or received a (stimulus check) from the CARES Act
• Is unable to pay the full rent because of a loss of household income due to a reduction in work or wages, a lay-off, or out-of-pocket medical expenses
• Use their best efforts to make timely partial payments that are as close to the full payment as possible
• Prove that evicting them would likely make them homeless or force them to move into close quarters or a shared living setting

Ramifications of Noncompliance

While the CARES Act did not include any penalties, the CDC’s moratorium does establish penalties for the landlord and the tenant. If a tenant lies on their declaration, they can be charged with perjury in federal court, a felony, which carries the possibility of fines and up to a five-year prison sentence.

A landlord who violates the order could be fined up to $100,000 and receive a prison sentence of one year. If the eviction resulted in someone’s death, the landlord could be fined up to $250,000 in addition to the possible one-year prison sentence. Violating organizations may be subject to a $200,000 fine per event, $500,000 per event if the violation results in a death.

Legal Support for Tenant Disputes

We are a full-service business law firm, able to represent you in a dispute with a residential or commercial tenant in central Pennsylvania. At Scaringi Law, we understand the intricacies of tenancy laws and will work to protect your rights.

Call Scaringi Law at (717) 775-7195 or use our online form to schedule your consultation.