New COVID-19 relief package brings much needed rent relief money

Published: Jan. 12, 2021 at 1:21 PM CST
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HUNTSVILLE, Ala. (WAFF) - Rent relief is finally on the way after nearly 10 months of an eviction moratorium across the United States.

In the latest COVID-19 relief package from Congress, $25 billion is set to be given to landlords to cover overdue rent from tenants who’s ability to pay has been affected by the COVID-19 pandemic. These tenants have only had to some, or in some cases none, of their rent since the Spring.

Sarah Taggart and Holly Ray are two local Huntsville attorneys. Taggart works with landlords in eviction cases, Ray works with tenants. Both said this money will go a long way to helping eviction issues across the country, but it won’t solve the problem completely.

“So many people that we see were hit so hard by COVID and continue to be hit hard by COVID,” Ray said.

For more than 9 months now there has been some kind of ban on evictions. Who or what handles the ban has changed hands during the pandemic and not everyone has been protected by it, but nonetheless there has been a ban. However, up until this latest stimulus bill, there had not been any rent relief to go along with the bar on evictions.

“An eviction ban without rent relief made no sense, it disproportionately burdened one side of the equation,” said Taggart.

She said landlords have been handling a majority of the burden of the eviction moratorium with no help from the government, all while tenants have had an out if they can’t pay their rent because of COVID complications.

“In the pandemic, a landlord’s obligations have not changed,” said Taggart. “A landlord’s obligations to maintain, a landlord’s obligations to prepare, all of that has remained the same. The tenant still has access to the courts to sue the landlord, if the landlord does not do what he has to do under state law, that has not been suspended.”

Taggart said this isn’t right, if tenants who aren’t paying their full rent and are protected by the CDC moratorium can’t be evicted, then landlords need money from the government to makeup for what renters aren’t paying.

“It’s just a question of fundamental fairness, you are asking one side of the equation to bear all of the burden in what is a terrible situation that is impacting us all,” Taggart said.

Taggart said she does not want to evict people who cannot pay their rent because of COVID-19, she just wants the government to help landlords.

She said she’s seen the narrative around landlords become very negative during the pandemic, with all landlords being seen as evil people who just care about money and not the wellbeing of their tenants. She said that is far from the case.

“Evictions have always been an unfortunate part of landlord-tenant relationship,” she said. “No landlord that I have ever represented has ever aggressively wanted to evict, it’s the last ditch effort.”

Taggart said when a landlord isn’t getting rent from 5-10% of their tenants, this could mean not being able to provide services for the other renters who are paying in full. She said this can effect landlords from the “mom and pops” all the way up to the larger corporations.

In some cases, Taggart said landlords are able to handle a drop in rent payments, but in others it can be detrimental and no support from the government sends a bad message.

“What we’re telling landlords with this is real estate investment is not a safe investment and that is a dangerous concept in our economy as it stands, because we are telling landlords when the rubber hits the road, the government does not have your back,” Taggart said.

Now that the government is sending some monetary help, Taggart said this is a step in the right direction. However, there are still questions on how much money will come to North Alabama and how the money will be divided up.

Holly Ray said she is telling her clients not to rely on the new rental assistance to help pay all of their overdue rent.

“My advice for them is we don’t know the distribution plan for this money in Alabama,” she said. “The CDC moratorium still requires you to make partial payments, so if you can make a partial payment to your landlord and cover your other expenses, like food and heat, make a partial payment to the extent that you can.”

Ray said she does think this $25 billion will help but she doesn’t think it is going to be enough to cover all of the overdue rent across the country.

“The problem is we have a substantial number of tenants who, through no fault of their own, may owe 7, 8, 9, even 10 months of rent related to COVID,” she said. “If you got sick in March, lost your job and you have a job you weren’t able to reclaim between now and then, it’s entirely possible you owe 10 months of rent. Track that across a couple of hundred-thousand tenants and you’ve spent that money very quickly.”

As for how the money is distributed between the states, Ray said the most money needs to go to places hit hardest by the pandemic.

“Realistic best case scenario is we look at families most in need because of COVID, we look at folks who were in hard hit industries, restaurant, entertainment, hospitality,” Ray said. “People who haven’t been able to work for months or who have been minimally employed for months, and we use this money to bolster their ability to survive in large amounts.”

Here in Alabama, Ray is still wondering how the money will be distributed.

“The $25 billion question is how do we reduce the administrative costs of distributing that money as far as humanly possible to make sure the vast majority of it is going to beleaguered tenants and the landlords that have allowed them to keep a roof over their heads for the past 9 or 10 months,” she said.

Another concern, how to make sure people don’t take advantage of the assistance and get a portion of the $25 billion they don’t deserve.

“In my practice, I have found that certain tenants have abused this certain moratorium period,” Taggart said. “I believe that and I have seen cases where tenants will see in the media that there is a ban on evictions and will read that, instead of what they’re supposed to do, which is make efforts to make payments.”

Ray agrees that their have been people trying to take advantage of the circumstances around them.

“There are always going to be people that find a way to game the system, but I think they are the vast, vast, vast minority,” Ray said.

There is no shortage of questions for renters, landlords and their lawyers right now. The new stimulus bill also extended the CDC moratorium through the end of January, which creates a lot of confusion when it comes to landlord-tenant laws.

“It’s a mess with more money, it’s a mess with very unclear guidelines,” Ray said. “We’re used to practicing under landlord-tenant law that is 14 years old, we know the ins and outs of it and now we throw in these federal rules that change everything.”

Under the CDC moratorium, renters need to attempt to make partial payments of rent and have to prove they cannot pay their rent because of COVID-19 or it’s effects.

Ray and Taggart both said this is extremely confusing to landlords because in the past if they accept partial payments they give up their ability to evict.

Under the CDC moratorium, tenants can be called into court and go in front of a judge to prove they qualify for the eviction protection.

Ray said if you get a court summons for this reason and are unsure of what to do, you should call Legal Services Alabama.

The CDC moratorium does not stop evictions entirely either, Taggart and Ray said there are still evictions happening for people who fall outside of the CDC moratorium, who’s lease have expired and refuse to move out and for tenants with behavioral issues.

Right now, the moratorium is set to expire at the end of January, but both Taggart and Ray said it’s going to be a while longer before there’s an end to these pandemic-created eviction issues and nothing will really be over until the actual pandemic is.

“As long as we have things like kids getting kicked into virtual school we’re going to keep having economic impacts as a result of this, I think the other part is going to be a large scale economic recovery, both in terms of rental assistance and people being able to return to work full time,” Ray said.

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