A lot has happened since the Center for Disease Control (CDC) issued a national eviction moratorium that took effect from September 4, 2020 to August 26, 2021.
For example, while the moratorium prevented renters from getting evicted during that period, it also burdened homeowners with housing their renters free of rent.
Adding to the problem is the delay in the full distribution of the federal government’s $46.55 billion fund through the Emergency Rental Assistance program (ERA). The amount is intended to assist eligible households that are unable to pay rent by covering up to 18 months of unpaid rent. To date however, only $28 billion has been distributed. The delay has left renters in mounting debt and at the risk of eviction.
Homeowners, meanwhile, are also wondering if it is still with the wait. They have also started pursuing eviction cases against their renters since the end of the CDC moratorium.
In this article, we would like to share with you our insights on the important eviction updates to help you decide on your best course of action. Do you go ahead and file an eviction case against your non-paying renters? If you’ve already filed a case, is the cost of going through the process worth it, or would you be willing to settle out of court?
The Eviction Process Post-pandemic
Changes have been made in the eviction process to help buy more time for rental aid to reach qualified renters and for you to get paid. Nonetheless, courthouses have been swamped with eviction cases which have reached 872,774 filed cases as of April 16, 2022. To ease the load, the courts have stayed the eviction until homeowners and renters alike have complied with these changes.
Eviction Diversion Programs
Most states and cities created Eviction Diversion Programs to hold off formal legal proceedings. It is a program that the court encourages (in states where it is optional) or requires (in states where it is mandatory) for you and your renter to undergo in the hope that you will both settle out of court and avoid the consequences of an eviction.
Eviction Diversion Programs enable the local government and non-profit organizations to go beyond just distributing ERA by providing other tools like legal aid, counseling, assistance in looking for additional cash assistance and social services, and dispute settlement.
The program’s success earned President Biden’s support to make it permanent in all jurisdictions. Currently, there are 30 states where Eviction Diversion Programs are operating.
We run down the basics for you by answering the most commonly- asked questions about this program.
Q: What are the benefits of the Eviction Diversion Program?
A: As owners, the program helps you avoid eviction-related expenses that could go as high as $10,000. For your renter, they avoid the negative impact of an eviction on their credit report and rental history which would make future housing prospects more difficult for them. The courthouses’ efficiency will improve as well because judges will have more time to hear more legally weighty cases as dockets lighten.
Q: Is it mandatory for me to participate in an Eviction Diversion Program?
A: Participation in these programs are either voluntary or mandatory depending on your location. But it’s encouraging to know that a program like this can help you and your renter settle the case in half the time compared to a formal eviction hearings that could drag both of you from between 60 to 90 days. Because the settlement is much faster, the program is therefore more economical for your rental business.
Q: What support can we get from the program?
A: While Eviction Diversion programs vary per state or county, the goal is the same: to engage you and your renter in an equitable dynamic solution. Equal support includes dispute resolution measures, financial counseling and assistance, legal assistance, and housing counseling. Both of you will receive continuous coordination of services, including assistance in filing for rent relief funds until you resolve a dispute.
Q: When is the right time to sign up for the program, pre-filing or post-filing?
A: You and your renter can participate in the program in both situations.
In Pre-filing, the program can begin from the time your renter starts to incur back-rents; during an ongoing dispute; or after a warning notice was issued.
In Post-filing, the program can begin after you file an eviction lawsuit in court against your renter.
Q: Is there an Eviction Diversion Program in my local jurisdiction?
A: You may refer to the Urban Institute’s complete list of the 30 states representing 47 eviction prevention and diversion programs to see if you have one in your jurisdiction.
Q: How long does it take to reach a settlement under the Eviction Diversion Program?
A: Eviction Diversion Programs vary in structure and scope of intervention where they are available. The more assistance is provided to both you and your renter, the sooner you could reach an agreement. If both of you agree to participate in the program, the court will pause the eviction proceedings for 60 to 90 days to give you both ample time to undergo counseling, mediation, or to apply for rental assistance.
Many states and cities hold off their eviction process to ensure that ERA-qualified renters remain protected from being evicted while waiting to receive their financial aid.
This means that before filing an eviction case, the court will first instruct you or your renter to apply for federal rental assistance or any financial support initiated by the state or non-profit organizations. By filing, you will be able to determine if you’re eligible to receive financial support.
In some local courts, when the eviction has already been filed, they will revert you to apply for rental assistance. If you or your renter has already applied, the court will need to see the accomplished form and case number. Still, the eviction process will not proceed and the court will not give justice to the case until it is notified of the final status of the application. This waiting period could run from 60 to 90 days.
Keep in mind that if you decide to accept funding, your right to evict renters for reasons not related to payment of rent stands.
Navigating Through The Changes
Despite the difficulties and challenges in the eviction process, you still need to abide by the law. What seems like a dead-end situation for owners can still be handled positively by taking proactive steps to soften the blow caused by the moratorium to your finances and business.
Here are some suggestions:
Avoid Self-help Evictions
Never succumb to self-help eviction measures in order to intimidate renters to leave your property. Engaging in these measures is illegal in all states and has consequences including jail time. Self-help evictions include:
- Changing the locks before the eviction lockout date
- Shutting off utility
- Not making necessary home repairs and emergency maintenance works
- Touching, removing, or selling your renter’s possessions
- Harassing your renter or their guests
We recently wrote an article that discussed the legal pitfalls of evicting tenants during the pandemic. While it is an article for our customers in Las Vegas, it described the same principle of the new eviction process across all states. It also contained practical advice for owners to ensure that they follow the eviction process according to law.
To know more about the eviction process specific in your area, consult your local court’s website for more information.
Communicate More With Your Renter
Take the initiative to talk to your renters about the situation. Discuss with them the impact of eviction on their credit record, employment record, and their chances of renting another home. Your goal is to make them cooperate with you by helping them look for resources to fulfill their rent obligations and avoid eviction. The moratorium only protects them from being evicted from non-payment of rent within the period it was in force. Even if they are eligible for the relief funds, they still need to pay rent or any late fees if there are any.
If you have a financial advisor, you may ask them to speak to your renters in order to guide them on how to raise money for rent. Examples of these could be by utilizing any tax refund or selling an asset to lessen the burden of rental debt.
Take Full Advantage of Rent Relief Programs
Aside from the federal ERA, the private sector, and non-profit organizations also created programs to supplement the financial help for owners and renters. You and your renter should take advantage of these supports to avoid the possibility of costly evictions.
We have shortlisted some rental relief programs for owners in the states we are currently servicing. You can find financial assistance for your renters as well as forbearance on your mortgage.
Here are more owner-specific resources from the Consumer Finance Protection Bureau that you can also check out.
- How federal rental assistance works for landlords and tenants
- Mortgage forbearance help for homeowners
- Rental relief help for landlords
- Protecting your credit during the Coronavirus pandemic
Work With a Property Manager
Dealing with the eviction process is very difficult especially if you have multiple renters that you want to evict. It is easy to get caught in legal pitfalls if you do not know what you are doing.
Working with a property manager can put your mind at ease. This is because they are more adept in handling even the simplest of renter issues down to evicting them. They have a wide network of lawyers that can assist owners throughout the eviction process. They also provide coverage for eviction-related expenses, lessening your financial losses in such a situation. So if the court finally rules for the eviction of your renter, you can use those funds to recover your losses or to market your property to place it with a new renter.
You do not have to be on the losing end when dealing with renter eviction. Despite feeling overwhelmed, there are now more legal assistance and financial aid available compared to when the pandemic started. Make use of these available resources. Work out a mutually-beneficial short-term solution with your renters. Enlist the help of professionals like financial advisors and property managers to mitigate the impact of Covid-related income losses.