Millions of Americans lost their jobs or faced income cuts during the coronavirus pandemic. We’ve been grappling with the economic effects of the virus for over a year now, and even some who could have managed a short-term financial hit have been unable to cope.
For homeowners behind on payments, forbearance has been available, letting them hit pause on mortgage payments for up to 18 months. Meanwhile, eviction moratoriums have protected some tenants who fell behind with rent.
Individual states have put their own programs in place to pause evictions, and the CARES Act, passed in March 2020, introduced a nationwide eviction moratorium last March. After it expired, the Centers for Disease Control and Prevention (CDC) instigated another ban that stopped landlords from evicting certain tenants for non-payment. That ban has been extended several times and is now set to expire at the end of June.
It’s difficult to know exactly how many renters are currently struggling. Mortgage payment data is collated and released regularly, but we have to rely on estimates of how many people are behind on rent payments. A March Household Pulse survey by the U.S. Census Bureau showed that over 7 million households are currently behind with their rent payments.
This has a knock-on effect, so landlords are also facing hard times. A lot are mom-and-pop landlords who can’t keep up with their own bills and maintenance costs. As a result, several housing groups have challenged the eviction ban in court.
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Judges in Texas, Ohio, and Tennessee ruled against eviction ban
In Texas, U.S. District Judge John Campbell Barker said the CDC ban was unconstitutional. The emergency order issued by the Texas Supreme Court to ensure judges follow the CDC instructions expired on March 31. Campaigners say tens of thousands of Texans are now at risk of becoming homeless.
In Ohio, eviction protection depends on where you live. District Judge J. Philip Calabrese in the Northern District Court of Ohio ruled the CDC had “exceeded the scope of its authority.” Even so, the Cleveland Housing Court says it will follow the CDC order. In contrast, the Akron Municipal Court will let landlords with cases dismissed because of the CDC ban refile at no cost.
Tennessee District Judge Mark Norris ruled that the ban was unenforceable, leaving renters in Memphis, Shelby County, and West Tennessee at risk of eviction.
Lawsuits are pending in other states, but so far, judges in Georgia and Louisiana have ruled in favor of the CDC.
What about the $50 billion in renter assistance?
The last two stimulus packages together committed $46.5 billion to rental assistance for struggling tenants. This money will help renters catch up with the rent they owe.
However, the money is being distributed to states, which has been problematic in some places. Some states haven’t agreed on how to allocate the money. For example, according to Pew Charitable Trusts, Montana has only paid out $17 million of the $200 million it received.
With the current CDC moratorium running out at the end of June, there’s a danger tenants nationwide will get evicted before they can access financial assistance.
What can renters do?
If you have fallen behind with your rent, take steps right away to deal with the problem, no matter what state you live in.
- Apply for financial assistance. Look at government agencies, local charities, and other nonprofits to see who might be able to help you. And that rental assistance we talked about? Find out how your state is distributing it, who’s eligible, and how to get your name on the list. Keep your eye on the local news. The sooner you apply for any new assistance programs, the more likely you are to qualify.
- Talk to your landlord. Dealing with financial difficulties can be stressful. It can help to remember that your landlord has their own bills to pay and may also be facing hardship. Talk to your landlord about your situation and what you can realistically pay. If you can work out a payment plan, it will make it easier on all sides. Court proceedings are expensive, so it’s in everybody’s interests to avoid that. Also, find out if your landlord has received mortgage forbearance. If so, you’re entitled to additional protection against eviction for non-payment.
- Know your rights. Every state has different eviction proceedings, and there’s a patchwork of state and local protections. Your state may have introduced additional renter protections. Make sure you understand the process in your area so you know what could happen and what steps might delay those proceedings. And don’t ignore any letters or emails.
- Find out if you are protected by the CDC eviction ban. You need to meet certain criteria, such as trying to make payments and applying for government aid. You need to earn less than $99,000 a year, and have suffered COVID-19 income loss.
- Get professional advice. If you face eviction, contact your local legal aid office for free or low-cost assistance. Having a lawyer on your side may make all the difference.
Unfortunately, a lot of people have fallen behind with their rent payments this year. If you are facing eviction, don’t be afraid to seek help. It is not an easy process, but you don’t have to face it alone.
View more information: https://www.fool.com/the-ascent/personal-finance/articles/evictions-are-moving-forward-in-these-states-despite-eviction-ban-what-can-renters-do/