Maya Chen
The COVID-19 pandemic has impacted landlords and tenants in several ways. While landlords are legally entitled to rent payments, many tenants have faced financial difficulties and have been unable to pay rent during the pandemic. To avoid large-scale evictions, governments have introduced measures to protect tenants, such as suspending eviction orders and encouraging landlords to defer rent payments. Landlords have also been encouraged to negotiate with tenants to agree on temporary arrangements, such as rent reductions or deferrals. However, these decisions ultimately depend on the landlord's financial situation, as they also have bills to pay and rely on rent as a source of income. The pandemic has highlighted the need for assistance in the rental sector, with potential long-term consequences for both landlords and tenants.
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What You'll Learn
Rent strikes and eviction notices
The COVID-19 pandemic has had a complex impact on landlords and tenants, with many tenants unable to pay rent and facing eviction notices. While some governments introduced measures to prevent evictions during the pandemic, these were often temporary, and there are reports of rising eviction notices as rents increase.
During the pandemic, some countries implemented measures to protect tenants from eviction. For example, in Ireland, legislation was introduced to prevent evictions during an emergency period that began on March 27, 2020, for three months, with a possible extension. This legislation prohibited landlords from serving notice of termination to tenants. However, landlords could still serve a warning notice, stating that the tenant must pay the rent owed. Similarly, in Ontario, Canada, the government suspended the issuance of eviction orders and all hearings, except for urgent issues such as illegal activity or serious safety impairments.
Despite these protections, tenants still accumulated rent arrears during the pandemic, and many faced eviction once these protections expired. In some cases, tenants were able to negotiate repayment plans with landlords to pay back the owed rent over time. However, as rents have increased, landlords have become less flexible, and eviction notices have spiked. For example, in San Francisco, rents have increased rapidly, and eviction notices are also on the rise as landlords seek to cash in on the booming AI industry in the city.
The legal process for evictions varies depending on the location and specific circumstances. In some jurisdictions, landlords are required to provide tenants with a notice period before starting eviction proceedings, such as the 30-day notice period mandated by the CARES Act in the United States during the pandemic. However, this federal regulation was later challenged and may have caused confusion and harm to both tenants and landlords, according to some sources.
Ultimately, the pandemic has highlighted the need for assistance in the rental sector, as large-scale evictions can have negative consequences for individuals and the wider economy. While some landlords may be willing to negotiate rent reductions or deferrals, tenants often struggle to keep up with rising rents and face the risk of eviction.
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Temporary rent suspensions
In the UK, the National Residential Landlords Association (NRLA) found that between March 2020 and September 2021, 23% of private landlords lost rent due to the impact of Covid-19. Of these landlords, 11% had negotiated rent reductions and temporary suspensions of rent payments with their tenants.
In Canada, the Ontario government suspended the issuance of eviction orders and all hearings, except for matters related to urgent issues such as illegal activity or serious safety impairment. The Landlord Tenant Board (LTB) continued to process new applications, but hearings to deal with arrears were not held during the pandemic. As a result, landlords were encouraged to negotiate with tenants and agree to reduce rents or defer payments.
In Ireland, legislation was brought in to prevent evictions during the emergency period, which initially lasted for three months from 27 March 2020 and could be extended. Landlords were not allowed to serve a notice of termination during this time, but they could serve a warning notice stating that the tenant must pay the rent owed. While rent deferment provided temporary relief for tenants, it also meant that tenants would be in debt and would have to address this debt in conjunction with their regular rent payments when the crisis was over.
In the US, the CARES Act stimulus package included a 120-day moratorium on evictions for renters living in properties with federally backed mortgages. Some states and counties also implemented their own eviction moratoriums, and local governments provided rental assistance to their residents.
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Repayment plans
The COVID-19 pandemic has had a complex impact on both renters and landlords, with many tenants unable to pay rent and landlords facing difficulties in evicting tenants and recovering unpaid rent.
To address these challenges, governments and organisations have introduced various measures and recommendations. For instance, the Ontario government suspended the issuance of eviction orders and hearings, except for urgent issues, and encouraged landlords to negotiate with tenants to reduce rents or defer payments. Similarly, the Irish Property Owners' Association advised landlords to provide rent deferments, but also highlighted the need for tenants to understand that deferred rent would need to be paid in the future, potentially alongside regular rent payments.
In recognition of the financial strain on renters, governments have also implemented emergency rental assistance programs. For example, the U.S. Department of the Treasury's Emergency Rental Assistance (ERA) programs have provided funding to prevent evictions and support housing stability for eligible renters.
To facilitate rent repayment, some sources suggest that landlords offer long-term repayment plans to tenants whose livelihoods have been affected by the pandemic. These plans should be carefully negotiated to balance the tenant's ability to pay with the landlord's financial risk. For instance, the District of Columbia's Department of Housing and Community Development (DHCD) established guidelines for repayment plans, including:
- A minimum term of one year, unless the tenant requests a shorter period.
- Equal monthly instalments unless the tenant agrees to an alternate schedule.
- No late fee or penalty payments during the public health emergency.
- Allowing tenants to pay more than the monthly amount to reduce the debt faster.
- Prohibiting lump-sum payments to ensure the plan is manageable for the tenant.
To support landlords and tenants in creating fair repayment plans, mediation services such as the Property Redress Scheme in the UK are available. These services can help both parties resolve disputes more quickly and affordably than through legal proceedings.
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Landlord-tenant negotiations
The COVID-19 pandemic has had a complex impact on both landlords and tenants. While tenants may struggle with unemployment or reduced work hours, landlords also face difficulties when tenants are unable to pay rent. As such, both parties are encouraged to work together and negotiate in good faith.
When negotiating, it is important to act with a sense of appreciation of the troubles COVID-19 may have caused for the other party. Landlords should recognise that many tenants may simply be unable to pay rent, while tenants should understand that landlords may rely on rent for their entire disposable income. If possible, tenants should continue to pay rent in full and on time, as per the agreement between landlord and tenant.
To begin negotiations, both parties can advise each other on how COVID-19 has impacted them. They can also list what aspects of the tenancy are most important to them and try to find ways to mutually accommodate each other's interests. It is likely that both parties will have to give and take during negotiations.
If the landlord and tenant are unable to resolve the issue to their mutual satisfaction, a landlord can serve a warning notice during the emergency period stating that the tenant must pay the rent owed. A notice of termination should allow 30 days for the breach and can be sent by Express Post.
To ensure a fair and realistic agreement, a careful balance must be struck through negotiations. While the tenant may struggle to pay large sums over a shorter period, a longer repayment period increases the financial risk carried by the landlord. As such, a repayment agreement should ensure that incremental payments are fair to the landlord while remaining realistic for the tenant.
To increase the chances of a successful private settlement, both parties should approach the negotiation with a positive and understanding attitude, be prepared, reasonably accommodate the other party's interests, and take steps to ensure that the agreement is enforceable. Once an agreement is reached, it should be documented in writing and signed by both the landlord and tenant.
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Government funding and assistance
The COVID-19 pandemic has had a complex impact on renters and landlords, and it has become clear that the sector needs assistance. In response to this, the U.S. government provided federal funding to help struggling renters who lost jobs or income due to the pandemic. The Department of the Treasury managed the Emergency Rental Assistance (ERA) funding, providing grants to state, local, and tribal governments. These grants were then distributed to renters, landlords, and utility providers to cover past-due rent payments or utility bills.
The ERA program has provided over $46 billion in funding, with two separate programs established: ERA1 provided $25 billion in financial assistance and housing stability services, while ERA2 provided $21.55 billion in financial assistance and addressed issues of housing stability and eviction prevention. At its peak, the program provided assistance to just under 500,000 households per month.
However, some renters faced challenges accessing this assistance, particularly those with unstable employment or those who were paid in cash, as they struggled to provide the necessary documentation. To address this, the Treasury allowed renters to self-attest their eligibility or approved them based on their income verification from other government programs. While these additional flexibilities improved access, they also presented an increased risk of fraud and misuse of funds.
In addition to the ERA program, other initiatives provided funding and assistance during the pandemic. The Bridges and Bridges RTC Rental Assistance Program offers housing assistance to individuals with very low incomes and mental illness while they wait for a Housing Choice Voucher or another rental subsidy. The Property Owner Risk Mitigation Fund (RMF) Program aims to reduce risks for property owners and expand housing opportunities for households with barriers to accessing housing. The Section 811 PRA program focuses on expanding supportive housing for individuals with significant and long-term disabilities.
During the pandemic, some governments also implemented measures to prevent evictions and protect renters. For example, in Ireland, legislation was introduced to prevent evictions during an emergency period, initially lasting for three months starting from March 27, 2020, with a possibility of extension. Landlords were prohibited from serving notices of termination during this time and were encouraged to negotiate with tenants to reduce rents or defer payments. Similarly, in Ontario, Canada, the government suspended the issuance of eviction orders and postponed in-person hearings, except for urgent issues.
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Frequently asked questions
Yes, unless you have come to a temporary agreement with your landlord.
You should talk to your landlord about your situation. They may be able to reduce your rent or defer your payments. You can also apply for COVID-19 emergency assistance.
Eviction cases may only be filed if the tenant poses a direct threat to the health and safety of other tenants, poses an immediate and severe risk to the property, or is causing a violation of a building code or health ordinance.
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