Eviction Moratorium and How it Affects Landlords and Tenants
April 3, 2020
We have received numerous calls about the status of residential and commercial leases after the passage of the CARES Act. On March 27, 2020, the president signed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) into law. The law includes important, immediate protections for tenants and homeowners. The federal eviction moratorium for tenants living in certain types of housing is summarized in the attached article.
Even if your property is not affected directly by the Act, numerous tenants have seen an immediate reduction in income as a result of the various “Shelter in Place Orders” that have effectively shut off their ability to earn income. While Landlords have certain obligations to their investors and lenders, evicting a delinquent tenant may not be possible under the CARES Act, or even practical during the current health crisis facing the community. With the economic uncertainty we are facing, it is not as if potential tenants are lined up waiting to take the vacant unit.
Thus, it may be in the best interests of everyone involved in both residential and commercial properties to consider a forbearance agreement for all, or a portion, of the monthly rent until such time as the Shelter in Place orders have been lifted. Forbearance is also discussed in the attached information. I have also attached a sample Forbearance Agreement should you choose to go that route. Any such modification of your leases should be done in writing with such an agreement.
We are in uncharted waters here and we are here to help you all get through this time. If you have questions about this or any other COVID related issues, do not hesitate to call.