Maya Chen
The COVID-19 pandemic has led to the implementation of various rent moratoriums across the globe. While these moratoriums aim to protect renters from eviction, they do not apply to all renters. For instance, the CDC moratorium in the United States only applies to individuals who are unable to pay rent due to job loss or economic hardship caused by the pandemic. Similarly, local moratoriums, such as the one in Beverly Hills, may be superseded by state laws, such as the Tenant Act, which imposes a different deadline for the repayment of rent. Additionally, rent moratoriums like the one proposed in Seattle have been criticized for being unconstitutional and detrimental to both renters and landlords in the long run. To qualify for protection under a rent moratorium, renters often need to provide written certification or a signed declaration stating that they meet specific criteria, such as income limits and efforts to obtain government assistance.
| Characteristics | Values |
|---|---|
| Who does the CDC moratorium apply to? | People who are unable to pay their rent due to job loss/economic hardship |
| What must renters do to take advantage of the hold on evictions? | Sign a document, under penalty of perjury, claiming that they meet the following criteria: They have used their best efforts to obtain all available government assistance for rent |
| What income should renters expect to earn to qualify for the CDC moratorium? | No more than $99,000 in annual income for Calendar Year 2020 (or no more than $198,000 if filing a joint tax return) |
| What is the deadline for the repayment of delayed rent? | 12 months after the end of the local emergency |
| What is the Tenant Act? | Allows tenants to delay the payment of rent, regardless of the existence of a local moratorium, by simply affirming financial hardship |
| What is the deadline for the repayment of rent as per the Tenant Act? | March 1, 2021 |
| What is the impact of the moratorium on landlords? | Landlords should also seek relief if they are unable to meet their financial obligations |
| What is the impact of the moratorium on renters in the long run? | Suspending rents without compensating landlords is not only unconstitutional but will hurt renters |
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What You'll Learn
Renters must meet criteria to qualify for the moratorium
The CDC moratorium on eviction applies to people who are unable to pay their rent due to job loss or economic hardship. Renters must meet specific criteria to qualify for the moratorium. Firstly, they must be a "tenant, lessee, or resident of a residential property". Secondly, they must provide a signed declaration to their landlord stating that they have made every effort to obtain all available government assistance for rent or housing. This includes expecting to earn no more than a certain amount in annual income, depending on individual or joint tax returns.
Renters must also declare that they are unable to pay their full rent or make a full housing payment due to substantial loss of income, employment, or extraordinary medical bills. They must commit to doing their best to pay as much rent as possible on time, given their circumstances. Additionally, renters must state that if evicted, they would have no other housing options and would likely become homeless or be forced to move into a shared living situation.
It is important to note that moratoriums may vary based on location and that renters should refer to the specific requirements of the moratorium in their respective areas. For example, Seattle implemented a moratorium on residential and commercial rent payments during the COVID-19 pandemic, allowing landlords to collect back rent later. However, this moratorium was later criticised for potentially causing long-term harm to renters.
Renters should also be aware of the limitations of moratoriums. While they provide protection from eviction, they do not eliminate the responsibility to repay delayed rent. Renters may have to repay delayed rent within a specified deadline, such as 12 months after the end of the local emergency or by a date determined by local legislation. Failure to repay delayed rent by the deadline can result in legal and financial consequences. Therefore, it is crucial for renters to understand the terms and conditions of the moratorium and seek appropriate guidance to ensure they qualify for protection.
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Rent must be repaid eventually
While the CDC moratorium on eviction provides relief to struggling renters, it is important to understand that rent must be repaid eventually. The moratorium allows renters to delay rent payments by affirming financial hardship due to the pandemic. However, this is not rent forgiveness, and the accumulated rent will become due once the moratorium ends.
The specific deadline for repaying delayed rent depends on the applicable laws and local regulations. In some cases, tenants may have up to 12 months after the end of the local emergency to repay the delayed rent. In other cases, a specific date may be set, such as March 1, 2021, after which the unpaid rent converts to debt, and landlords can take legal and financial actions to recover the owed amount.
To qualify for protection under the CDC moratorium, renters must meet certain criteria and provide a signed declaration to their landlord. This includes affirming that they have made their best efforts to obtain government assistance for rent and that they are unable to pay their full rent due to substantial loss of income, employment, or extraordinary medical expenses. It is important for tenants to understand that providing false or misleading statements during this process may result in criminal and civil actions.
While the moratorium provides temporary relief, it is essential for renters to prioritize rent repayment to avoid facing significant financial burdens in the future. Renters should also explore all available options for assistance and consider making smaller, more frequent payments to reduce the burden of larger lump sums. Additionally, seeking legal advice specific to their situation can help tenants understand their rights and obligations during and after the moratorium period.
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Moratoriums may hurt renters in the long run
Renters may also be hurt by the moratorium in the long run. The National Association of Realtors warned that the federal government was "kicking the can down the road" and creating a mountain of debt for renters that would inevitably lead to a flood of evictions when the moratorium ended. For renters, a failure to pay may show up on credit scores and impact their ability to find housing in the future. Certain consumer reports collect information on evictions that could also make it harder to rent in the future. Renters may also face court costs if their landlord seeks to get a judgment.
Instead of imposing a rent moratorium, it has been suggested that governments should focus on addressing regulatory barriers that created the affordable housing crisis in the first place. Governments should be bearing the cost of the crisis instead of imposing it on landlords, who are expected to sacrifice without compensation. Suspending rents without compensating landlords is unconstitutional and will make rental property more expensive for renters once the moratorium ends. Landlords will likely be forced to increase rents after the pandemic is over to compensate for lost rent payments.
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Moratoriums may be unconstitutional
The CDC moratorium on eviction applies only to people who are unable to pay their rent due to job loss or economic hardship caused by the pandemic. It does not apply to all renters.
Seattle's proposed rent moratorium has been deemed unconstitutional by some. The moratorium calls for an immediate moratorium on residential and commercial rent payments, such that no resident of Seattle should be required to pay rent during the health emergency or accumulate debt for unpaid rent. However, this proposal has been criticised as it does not compensate landlords, who will be forced to bear the cost. The US Constitution's Fifth Amendment requires governments to offer just compensation when taking property for public use. Suspending rents without compensating landlords will also hurt renters in the long run, as landlords will likely be forced to increase rents after the pandemic is over. Regulatory barriers that created the city's affordable housing crisis should be addressed instead.
The Supreme Court has indicated that an extension of the moratorium would be unconstitutional. President Biden has acknowledged that the move was likely to be subject to court challenge and expressed doubt about its legality. Scholars he consulted felt the measure was probably not constitutional. The moratorium may destroy all economically viable use of rental properties for an indefinite period, resulting in the same outcome as a direct seizure. Landlords would be unable to generate value from the property or make any other use of it while the moratorium is in place.
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Moratoriums may not apply to all situations
Local moratoriums may also be preempted by state law. For example, the Tenant Relief Act of 2020 allows tenants to delay rent payments and establishes a deadline for the repayment of rent, regardless of the existence of a local moratorium.
Moreover, some argue that moratoriums on rent payments may hurt renters in the long run by suspending rents without providing compensation to landlords, which could result in negative credit reporting and debt collection once the moratorium ends.
It is important to note that the specific applicability of a moratorium can vary depending on the jurisdiction and the specific terms of the moratorium order. Renters should carefully review the requirements and protections provided by the moratorium in their area to understand their rights and obligations.
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Frequently asked questions
No, the rent moratorium does not apply to all renters. To qualify for the CDC moratorium, renters must meet specific criteria, such as income thresholds and providing a signed declaration stating that they have been unable to pay rent due to financial hardship.
To qualify for protection under the CDC moratorium, renters must provide a signed declaration to their landlord stating that they have:
- Used their best efforts to obtain all available government assistance for rent or housing.
- Expected total income below a certain threshold for the calendar year.
- Been unable to pay full rent due to substantial loss of income, employment, or extraordinary medical bills.
Yes, in addition to the criteria mentioned above, renters must also understand that:
- They will still need to pay rent at the end of the moratorium period.
- Providing false or misleading statements may result in criminal and civil actions.
Yes, there are local variations to the rent moratorium. For example, Seattle implemented a policy that temporarily prohibits evictions or rent collection but allows landlords to collect back rent later. However, it's important to note that local moratoriums can be preempted by state laws, as in the case of Beverly Hills, where the Tenant Act established a different deadline for rent repayment.
