The ban on evictions is set to expire on December 31st. This was enacted to prevent a wave of evictions that the CDC determined would spread COVID19 through renters. This order applied to those already qualified for the CARES act, who have fallen behind on rent payments, preventing them from being forced into crowded living conditions or homeless shelters. These tenants must have submitted a declaration stating the pandemic has caused hardship, be able to prove that they have reached out and applied for any and all financial assistance available, documentation is advised. They must also state that they would likely become homeless if evicted. Here’s what the eviction moratorium means for real estate investors in California.
Evictions for reasons that aren’t related to non-payment of rent during the eviction moratorium may still be processed for real estate investors in California. You don’t have to tolerate tenants committing criminal acts, threaten other tenants, or any other legitimate reason for eviction. It is highly advisable to practice due diligence in assuring that your tenant doesn’t qualify for the terms of any standing order and be prepared to withdraw from eviction proceedings should they produce a signed statement of financial difficulties due to the pandemic. e certain you’re aware of not only the standing CDC order but any state or local government orders regarding tenants and evictions. Civil penalties for the landlord or the resident are a risk, landlords can be fined rather hefty sums. Tenants who cannot respond affirmatively to all qualifying questions don’t qualify. They are signing the document under penalties of perjury.
When the order expires, not only will the unpaid rent still be owed by the tenant, their monthly rent payments will be due in full moving forward. One avenue is to discuss a plan with your tenants to begin making partial payments towards the monthly payment to the best of their ability, during the covered period. Otherwise, unpaid rent for real estate investors in California under the rules of the eviction moratorium, means either financing the missing income from other sources or taking your tenants to court to sue for back rent. The outcome of the latter of these options is dubious at best, considering that financial hardship is the very reason for the non-payment of rent.
Though cases won’t be heard until the order expires, an update to the original eviction moratorium from the CDC means real estate investors in California can start eviction court proceedings prior to the expiration of the order. The eviction cannot take place during the time period covered by the order. This update provides clarification on what is and isn’t covered under the guidelines of the order and can be found under the frequently asked questions section of the CDC website, as a document. In most cases, evictions take between 3 to 30 days. Depending on the local laws governing the property issued at the end of the moratoriums put in place due to the pandemic, courts will begin processing evictions. These eviction proceedings may begin as early as January of 2021. Landlords should remain abreast of updates on recent court cases that have been filed, fighting the moratorium on behalf of landlords, based on the premise that the CDC doesn’t have the constitutional authority to enact policies on rent.
Whenever possible real estate investors in California should consider devising a repayment plan for the back rent that has accumulated during the eviction moratorium. In many cases, landlords and tenants have an amicable relationship and wish to do whatever is possible to maintain the current arrangement. If both parties can afford this option and are agreeable to the amount that would be added in monthly amounts, in addition to future rent payments, you could keep your good tenants. As an added bonus, you will know you have helped a family keep their home. It would be best for all parties if you could work with your tenants well in advance of the looming deadline.
When communicating with tenants under the protection of the eviction moratorium, real estate investors in California would be wise to carefully document all communication. Should things progress legally, you will have every piece of evidence available to show your actions and whatever steps taken to work with your tenants during this time. Your documents will also provide backup, should your tenant attempt to omit any facts during the court proceedings, you can protect yourself from such a possibility with careful record-keeping.
Madrid Property Solutions will help you understand your rights as a landlord and all that the eviction moratorium means for real estate investors in California. Madrid Property Solutions is happy to answer any of your questions or concerns about what will happen to renters after the new year. Just reach out to our team by sending us a message or giving us a call today at (866) 233-3848!