On March 27th, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was passed and signed in law by the President. The following information summarizes the new obligations under the CARES Act directly applicable to residential landlords. A guide for the CARES Act can be found here.
Residential Landlords Provisions
There is a 120 day moratorium on filing evictions related to any monetary default by a resident, with an additional 30-day cure period for any monetary default at the end of this period. Therefore, no eviction based on monetary default can be filed for 150 days. Evictions arising out of criminal activity/endangerment to other residents and property damage may still be filed.
All late fees are waived for this 120-day period. Due to the aforementioned cure period for any late payments or monetary defaults at the end of the 120-day moratorium, no late fees can be charged for 150 days, as well. Resources regarding late fees in the CARES Act can be found here.
A payment plan is in place for tenants directly affected by the virus who can provide written documentation of their loss of a job, income or other monetary hardship. The resident must repay missed payments over a 12-month period. If the resident fails to meet payment obligations, he/she may be reported to credit agencies and have collection procedures initiated.
Landlords may be eligible for relief programs such as small business loans or grants under different provisions of the CARES Act. The CARES Act also features direct payments and expanded unemployment compensation which tenants may be eligible for.
All of these provisions apply to landlords with loans backed or issued through the federal government or its agencies. For your business, take a look at this CDC guide for how you can plan and respond to the recent COVID-19 crisis.
If you have any questions concerning these provisions, do not hesitate to contact Daryl J. Sidle at 410-385-8077 or James E. Baker at 410-385-8122.