Landlords were especially badly struck by the epidemic and eviction restrictions. Learn how to recuperate financial losses caused by the epidemic here.
What you will discover:
What options are there for landlords who have not been paid?
Can landlords use the Emergency Rental Assistance program?
Is it permissible to increase rent to make up for lost income?
Can landlords charge renters for extra services?
Can multi-unit homes be rented out on a short-term basis?
Can landlords amend their lease terms or cut services?
As millions of Americans struggled to pay their rent as a result of the COVID-19 epidemic, localities, states, and even the federal government imposed an eviction moratorium to assist renters and maintain public safety. However, the eviction moratorium shifted the economic suffering caused by COVID from renters to landlords. As the epidemic continues, many landlords are finding it difficult to fund basic expenditures owing to unpaid rent. While many landlords are still subject to state or municipal eviction moratoriums, landlords may mitigate and even recuperate some of their financial losses. Here are solutions to frequently asked inquiries from landlords dealing with moratorium and pandemic-related losses.
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What options are there for landlords who have not been paid?
While not a rent relief program, certain landlords and rental property owners may be eligible for Economic Injury Disaster Loans (EIDL) or grants from the Small Business Administration to mitigate pandemic-related losses. If paying the mortgage or other property-related bills has become difficult, an EIDL may be of assistance. Unfortunately, the procedure is lengthy and might take months.
In terms of direct rent assistance, the federal government committed $25 billion to the U.S. Department of the Treasury’s Emergency Rental Assistance program (ERA). Although the ERA is a federal effort, the aid is administered by states and local governments. The United States Department of the Treasury maintains a database of state and local programs on its website, where landlords and renters may search for programs in their region.
Aside from the federal ERA program, some states and towns approved rent assistance while also imposing an eviction moratorium. Some of these programs were created, at least in part, to protect landlords from the effects of the moratorium.
Can landlords use the Emergency Rental Assistance program?
ERA, like other rental assistance programs, is intended to help renters, hence tenants must apply for aid. However, assisting renters in paying their rent ensures that landlords are compensated. The Consumer Financial Protection Bureau (CFPB) expressly recognizes that ERA may benefit landlords and encourages landlords to assist renters in filing for assistance when necessary.
To be eligible for ERA support, renters must fulfill all three of the following criteria:
At least one member of the family has qualified for or should qualify for unemployment, has lost income, owing substantial sums of money, or has had other financial difficulties.
Household income is below a specific threshold, depending on where they reside.
At least one member of the family is homeless or is having difficulty obtaining secure accommodation.
Some state and municipal administrations that administer ERA choose to provide rental assistance payments directly to landlords rather than to tenants. In any case, renters are expected to utilize the funds to pay their rent, including acceptable late fines.
If a tenant is eligible for rental assistance via the ERA or another program, landlords should promote and support them in applying
Is it permissible to increase rent to make up for lost income?
Rent may generally be increased at the conclusion of the lease time or if permitted under the Lease Agreement. For example, if a renter signed a one-year lease starting January 1, 2021, the earliest you may increase the rate is January 1, 2022. However, if your renter is on a month-to-month lease, you may increase the rent at the beginning of the next month after giving the required notice. Some jurisdictions may compel landlords to provide renters 30 or 60 days’ written notice before raising rent. If a property is subject to municipal rent control legislation, extra restrictions and limitations may apply. Before sending a Rent Increase Letter, it may be wise to consult with a lawyer about the particular regulations governing rent increases in your state or area.
If the rental property is not subject to rent control or other municipal or contractual restrictions, a landlord may increase the rent for almost any reason after the existing lease ends. This includes recouping rent losses from the prior lease. For example, if a tenant paying $1,200 in rent missed monthly payments in March and April of 2021, a landlord may be permitted to increase the rent on the property to $1,400 per month for one year commencing January 1, 2022, in order to recoup the $2,400 in lost income. The renter is still legally obligated to make those missing rent payments, and a Rent Payment Plan may be utilized to assist the tenant in catching up on past rent.
If an eviction moratorium is still in effect in the location of a rental property, a landlord cannot evict renters for failing to pay in numerous situations. Landlords may still issue late and missed rent payment notifications and preserve extensive records. It is critical to communicate clearly and openly with a renter who is having difficulty paying their rent. Once your renter is back on their feet, be open to creative alternatives such as taking partial rent payments or working out a Rent Payment Plan.
Can landlords charge renters for extra services?
If you own numerous rental properties or have the potential to add amenities or services, you may extend your services or offer unit improvements to financially secure renters in order to create more money.
Your services might vary from gardening to home cleaning and beautifying. Similarly, the kind of improvements offered may vary depending on your unique property and ability, but might include access to coveted common amenities such as a pool or gaming room, a rooftop terrace, greater storage, or preferred parking. You may also provide in-unit enhancements such as air conditioning, bespoke renovation, a private hot tub, or other luxuries that a renter would be prepared to pay extra rent for.
A Service Contract or a Lease Amendment may include an agreement for services or upgrades not covered by the Lease Agreement.
Can multi-unit homes be rented out on a short-term basis?
In general, yes. Most landlords may designate certain apartments in a multi-unit building for use as a short-term rental space. If your rental property is in a tourist area, short-term rentals via different web platforms might provide an alternate cash stream to long-term rentals. These rentals are becoming more popular among tourists who wish to escape the cost and monotony of hotels.
However, be cautious and conduct your research before providing one of your properties for short-term rentals. Many towns and states have imposed tight regulations on short-term rentals, especially those in multi-unit buildings. Your short-term rental may also be subject to the most current COVID-19 requirements for visitors and hosts in your jurisdiction.
Can landlords amend their lease terms or cut services?
In general, landlords cannot amend the conditions of an existing lease without the tenant’s express consent or a commensurate fair rent decrease. This is true even if the renter violates the lease’s conditions, such as neglecting to pay rent. In fact, several jurisdictions expressly ban such self-help tactics, which might result in serious legal penalties. Notably, renters who are struggling to pay their rent may be delighted to accept a Lease Amendment that lowers the rate while eliminating services or perks, since this may relieve some financial burden.
If a landlord has to change the terms of a lease or limit services to a tenant due to financial difficulties, the best method is to engage with the tenant and arrange a Lease Amendment. Landlords, for example, may provide additional services or facilities, or agree to waive one month’s rent in return for the lease modification. Whatever is worked out, putting it in writing in a Lease Amendment will guarantee that everyone is on the same page.
