In September, the CDC announced a ban on most evictions for non-payment of rent, replacing the expired federal ban through the CARES Act. The moratorium extends through the rest of 2020, ending on December 30.
In several states and cities, eviction bans, as well as other laws that protect renters during the pandemic, extend into 2021. This has put enormous pressure on property managers who want to take care of residents, but also must keep their owners’ properties in good financial standing.
So, what does that mean for rental properties and property managers in 2021? To prepare for 2021, it’s important to understand the COVID-related regulations that apply to your properties.
Here’s a rundown of what to expect in 2021, which regulations are ending, and where regulations are continuing into the new year.
The Federal Eviction Moratorium
The original federal ban on evictions expired on July 24, 2020, which was created to protect residents who suddenly found themselves unemployed due to the pandemic and resulting quarantine. In September, the CDC stepped in and declared a new ban that ends just before the new year. In addition, landlords whose properties are covered by the Federal Housing Administration (FHA), Fannie Mae, or Freddie Mac loans cannot begin eviction procedures for unpaid rent through the rest of the year.
But as of now, and assuming no other changes, the ban on evictions put in place by the CDC, FHA, Fannie Mae, and Freddie Mac, all end in December 2020.
In some cases, however, city and state bans are more comprehensive than the federal ones. For example, the CDC ban says nothing about charging late fees, but in New York, residents don’t have to pay late fees on the rent that they owe. In Connecticut, owners and property managers can’t report a resident’s nonpayment to credit scoring companies.
In those cases, because they are more comprehensive, the state eviction bans trump the federal ban. So, while the CDC ban was a big announcement, property managers should be aware of the regulations in their properties’ states and cities.
Utility Shut-Off Bans
In addition to bans on evictions, many states banned utility companies from shutting off water, electricity, gas, and, in some cases, cable and telephone to residents. In all, 29 states had bans in place in 2020. While most have already expired or will expire by the end of 2020, there are six states with utility bans that extend into 2021:
- California: Until April 16, 2021
- District of Columbia: Until 15 days after the end of the emergency
- Kentucky: Until the end of the emergency or further announcement
- Maine: Until the end of the emergency or further announcement
- New York: Until 180 days after the end of the emergency and no later than March 31, 2021
- Wyoming: Until the end of the emergency or further announcement
Property managers and owners who pay utilities in those states will still have a reprieve at least for the beginning of 2021. If residents pay for their own utilities, it’s still important to be aware of the shut-off ban regulations in your area. Should residents’ utilities be shut off for non-payment, you may get a phone call asking for help.
In addition, utilities that are shut off in cold-weather regions during the winter could cause burst pipes, or force residents to use risk-prone space heaters.
California: Bans on Evictions Still in Play
NOLO has a list of evictions bans by state. While most state bans on evictions have already ended or end around the same time as the federal ban, California’s ban extends into the beginning of 2021.
On August 31, Governor Gavin Newsom signed a statewide ban on evictions that extends until February 1, 2021. Any resident who cannot pay their rent due to a COVID-related hardship cannot be evicted before that date.
Many California cities and towns already had their own eviction bans in place. But for owners and property managers with properties in multiple locations in California, the statewide ban makes it easier to implement policies and comply with regulations at all of their properties.
In addition to the eviction moratorium, California cities still have regulations that protect residents that extend into 2021. For example, San Jose has banned rent increases on rent-stabilized apartments and rent-controlled mobile homes until January 1, 2021.
What Happens When Eviction Bans Expire?
The various eviction moratoria in place doesn’t mean a rent vacation for all residents. Every law in place makes it clear that if they are able, residents still have to pay their rent. And in some cases, if they are unable to pay all of their rent, they still have to pay a portion of it.
And by no means do the eviction bans cancel out rent payments entirely. Residents still owe the rent they didn’t pay. And once the moratoria are up, owners and property managers can begin eviction proceedings if they need to do so.
If a resident is in arrears, property managers have to notify residents according to the regulations in their state. In some cases, that means giving residents 30 or even 60 days’ notice. That gives residents 30 to 60 more days to pay owed rent and fees.
It’s also important to note that the eviction moratoria don’t apply to evictions for violations of other resident rules, either, such as illegal pets, damage to the property, or criminal activity. So, if you have a resident breaking other rules laid out in their lease, you can still proceed with evictions.
Bottom line: Keep in touch with your residents. Help them find a way to pay their rent and fees. It will mean the difference between keeping a resident and getting some income and filling a vacancy in a time when doing so may be tough.Read more on COVID-19