Congress is set to pass the long-awaited second stimulus and COVID-19 relief package. This time, the bill includes $25 billion in funding for rental assistance to help support landlords and tenants.

The new measure comes as an estimated 12 million renters will owe $6,000 or more in back rent and utilities by the end of the year.

According to the National Multifamily Housing Council’s weekly rent tracker, 75% of renters paid by December 6, representing a 7.8% drop from the same day last year, and a 5% drop over November 6 2020.

The new package also includes a direct cash stimulus of $600 per adult and child below a $75,000 income threshold and $300 per week in enhanced unemployment insurance for 11 weeks. Funding is provided for food subsidy programs and childcare, which may allow some tenants to put more money toward rent.

Congress plans to appropriate $319 billion for employers, including an extension of the Paycheck Protection Program (PPP)and Economic Injury Disaster Loans (EIDL). It is hoped that this small business support will put more renters back to work.

Text of the nearly 6,000-page bill was released only Monday afternoon, leaving Congress to vote on the package without reading it by Monday night. Details that are currently available indicate that the rental assistance funding will go to individual states which will dole out the money based on priorities such as household income. At least 90% of the funding must be applied to rent, rent arrears, and utilities or other household expenses.

Eligible tenants will be those with incomes at or below 50% of the area median, where one or more household members has been unemployed for 90 days. The rent supplement will be available for 12 months, until December 31, 2021. Because it can be difficult to inform tenants of their rights to rental assistance, the bill allows for landlords to assist tenants by applying for the funds on their behalf.

In addition to the rental assistance funding, Congress has extended the federal ban on evictions for nonpayment of rent until January 31, 2021.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks , and Eviction Reports (U.S. only).

Click Here to Receive Landlord Credit Reports.

Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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Eviction Moratoriums Extended

by Chris on December 21, 2020

Landlords who were awaiting the December 31 deadline for eviction bans to end will be stuck for longer as federal, state, and city lawmakers work to extend tenant protections into 2021.

The federal relief bill just passed by Congress includes an eviction ban until January 31, 2021. If the language of that relief bill mirrors the current CDC directive, tenants who submit a declaration that the pandemic is a factor in nonpayment of rent will be afforded protection from eviction.

While a clarification of that CDC order indicates that landlords can proceed with eviction cases but not complete the eviction until the deadline passes, the procedure in many county courts — requiring in-person hearings and granting orders at the time of the hearing — may preclude many landlords from pursuing the case until after the ban has been lifted.

Once the ban is lifted, tenants will owe all past due rent. The federal ban applies to landlords nationwide.

In addition to the federal ban, several states and cities are passing their own eviction moratoriums. As of the date of this post, Oregon, California, Nevada, Seattle, Austin, Philadelphia, District of Columbia, Honolulu, Atlanta, and Kansas City, Missouri are among those that have extended eviction bans or are in the process. Most of these bans run until March 31, 2021. Where there is both a federal ban and a state ban, the longer one will prevail.

While these state and local bans cover only nonpayment cases so that disruptive tenants still can be removed from a property, not all tie eviction protections for nonpayment to tenants impacted by the pandemic.

After the eviction bans are lifted, landlords should expect extensive delays as courts are flooded with cases. Once the evictions are ordered, local sheriff departments will need to enforce the orders. That will take additional time. Landlords have few options to avoid this income loss, but these strategies may work in some cases:

Re-negotiate with tenants. The newest federal relief bill contains funds for rent supplements, unemployment, and PPP loans for small businesses. Check back with tenants to see if they are entitled to any of these benefits or if their employers have hired them back.

Look for rent subsidies that may be offered by the federal relief plan or by local governments.

Participate in mediation with tenants, like the Seattle-area eviction diversion program. The emergency orders are difficult to follow and tenants may not fully understand their liabilities. A mediator can assist in developing a repayment plan that both parties can live with.

Cash for keys. Buying a tenant out of a lease is the least palatable option for landlords, but it may make sense financially. Estimate how much it will cost in attorney’s fees and lost rent to evict a tenant and compare that to what a tenant might accept to leave voluntarily.

Tenants are hungry for cash, and a payment equivalent to a month in a cheaper apartment, returning the deposit, or some combination of the two may get the property back in service faster while allowing a tenant to find a cheaper housing option without the cloud of an eviction record or bad credit. One caveat: don’t force or intimidate a tenant into accepting the deal. Cash for keys must be voluntary.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks , and Eviction Reports (U.S. only).

Click Here to Receive Landlord Credit Reports.

Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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Hope on the Horizon: What Landlords Can Expect in 2021

December 21, 2020

With the ongoing vaccine rollout and a new stimulus and relief deal in Congress, there is hope on the horizon that 2021 will bring an end to the economic pain brought on by the pandemic. Businesses can reopen, renters can get jobs, and landlords can get paid. But there’s no question that COVID-19 has had […]

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2021 the Year of Lease Incentives

December 21, 2020

Rent incentives are back, and tenants can find them in cities across the country. Many Seattle landlords currently are offering six weeks free rent. New York City tenants can expect two free months. Same in Philadelphia and Boston. Washington, D.C. landlords are competing with less cash at move in, eight weeks of free rent on […]

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Tenant Scams 11 Landlords

December 14, 2020

At least 11 Toronto-area landlords are suffering income loss after the same tenant scammed them using a fake name. According to this news report, the tenant provided documentation under an alias name to secure leases on multiple properties.  The tenant allegedly sublet each of the luxury properties and collected rent. Some of the properties suffered […]

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How to Make the Most of a Tenant Credit Check

December 14, 2020

Running tenant credit is the final step in the tenant screening process. This information helps landlords: Uncover tenant fraud including identity theft and false identity; Confirm the applicant’s qualifications; and, Gain leverage for on-time rent payments. A credit report may prove a tenant’s habit of paying their bills on time. Conversely, the credit report may […]

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Vancouver to Increase Vacancy Tax

December 14, 2020

Citing the apparent success of the Empty Homes Tax in creating more rental housing, Vancouver lawmakers voted to increase the tax in 2021, sending an “even stronger message” to owners of vacant properties. This vacancy tax currently is set at 1.25% of the property’s assessed value. The new amendment raises that figure to 3%. The […]

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Rent Control Comes to Nova Scotia — For Now

December 14, 2020

Nova Scotia’s Housing Minister has announced provincewide temporary emergency measures including a limit on rent increases. That rent cap is retroactive to September 1, 2020. Under the new emergency orders, rent cannot be increased by more than 2% each year. The cap will remain in effect until February 1, 2022 or until the current state […]

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Alarming Rise in Tenant Fraud

November 23, 2020

The rental industry is experiencing a significant rise in fraud activity among applicants, that according to a new fraud analysis from TransUnion Credit Bureau. During the period from March 2020 to August 2020, landlords saw a nearly 30% increase in applicants who failed authentication or were identified as high risk. In August 2020, fraud triggers […]

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Landlords Suffer Setback in Bid to End Eviction Moratorium

November 23, 2020

A federal judge has refused to grant an injunction to a group of landlords who say that the federal government’s temporary eviction freeze violates their constitutional rights and is causing irreparable harm. In a 66-page decision that traverses the intricacies of numerous Latin legal terms and relies in part on a case involving turtle farming, […]

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