How Are People Going To Pay Months Of Rent In a Lumpsum?

What are rent arrears and eviction? Rent arrears and eviction coexist in this nation-state. Eviction is the termination of a tenancy by the landlord for the tenant due to non-payment. It involves an element of force. Rent arrears and eviction are intertwined.

For the first time in history, a virus as deadly as a rampant strain of Ebola-infected the United States, and the threat to American lives is growing with a staggering 543,000 confirmed deaths. The Corona Virus is here, and its effects are devastating—impacting businesses, jobs, transportation, and communities.

The Coronavirus pandemic has left tens of thousands of renters struggling to make ends meet or becoming homeless. Many people have been unable to pay their rent and have lost their homes to foreclosure. There is support for those who need it most, however. Tenants could pay their rent back by coming up with a payment plan with the landlord or Government and Housing Authorities, Faith-based Organizations, and Non-profit and Private Agencies that provide rental assistance.

Related Article: 8 Landlord Lessons Learned (Year 1)

Understanding the rent moratorium

The Centers for Disease Control and Prevention (CDC) has been working with partners like American Public Health Association and the National Center for Healthy Housing (NCHH) to pass laws in states that will protect people from being evicted. The economic fallout caused by the Covid-19 pandemic has severely afflicted tenants leading to widespread housing insecurity in the USA.

Nearly all states acted quickly to cushion tenants who were in a tight spot, and by May 2020, 43 states drafted and passed eviction moratoriums limiting landlords from evicting tenants who couldn't pay up. In March, the U.S. Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which consisted of a moratorium on evictions for residential properties receiving federal subsidies. The Centers for Disease Control (CDC) rolled out a list of conditions for the rent moratorium for persons set for eviction. Under the order, a form has to be filled and meet the following;

· They cannot expect to earn an upward of $99,000 in a single-income household (or $198,000 upwards in a dual-income household) in 2020.

· They must substantiate that they are working with a government agency to receive financial assistance for past due rent.

· They should not be in a position to afford rent due to loss of household income.

· If evicted, they would most likely become homeless because of a lack of other housing options.

· They must be making efforts to make "timely partial payments" to their landlord.

In September 2020, the Centers for Disease Control and Prevention (CDC) introduced an eviction moratorium protecting renters, even if the property was federally subsidized. This applies to states that had allowed their moratoriums to cease. On day one in office, January 20, 2021, the new president, Joe Biden, extended the moratorium to March. However, because of pitfalls in the moratorium and its implementation, in addition to insufficient financial relief, a majority of tenants have either lost or risk losing their shelters due to failure to pay up.

Breakdown of a Moratorium for Eviction

An eviction moratorium should cover the five key stages of an eviction.

The details may differ from state to state, between courtrooms within a single jurisdiction, and between local jurisdictions within states, but eviction encompasses five key phases:

· Firstly, the landlord provides the tenant with an eviction notice, guiding the renter to vacate the establishment by a stated date.

· Secondly, the landlord commences a judicial eviction lawsuit, also known as a forcible detainer or an unlawful detainer against a renter who has overstayed in the premises over the specified date.

· Thirdly, the court holds a hearing or a string of hearings to acquire evidence and legal arguments from the tenant and landlord and other witnesses that will determine the case.

· Fourth, the court gives a ruling. If the ruling goes the landlord's way, the tenant must vacate the premises and pay back other damages, costs, and rent. This includes an order that authorizes the court clerk to direct the local sheriff to evict the renter physically.

· Finally, the sheriff carries out the order to evict the renter by carrying out a physical eviction.

How are people going to pay rent when the moratorium ends?

The Government announced that the national wide eviction moratorium would be lengthened to June 30, 2021. The moratorium, implemented almost a year ago, has been crucial in protecting families struggling with the persistent economic effects of the CORONA VIRUS pandemic. Ever since the moratorium was implemented, hundreds of millions of dollars have been channeled toward rental assistance for landlords and tenants. More rental aid will be accessible through the newly implemented American Rescue Plan Act from the Federal Government.

The moratorium on evictions has maintained housing for millions of people who would have been removed from their homes during the pandemic. Nonetheless, the moratorium has its setbacks undermining the public health impact.

However, tenants may still have a way out of this puddle of mud through a few ways that may help them pay their rent in a lump sum.

Enter a payment plan with the landlord

Instead of receiving eviction notices, renters in some states may have a chance to enter a payment plan with their landlord for unpaid rent. These plans are known as Tenant-Based Rental Assistance (TBRA) programs, and they allow tenants to enter into a contractual agreement with the landlord. The tenant must first pay off any arrears in rent.

Rental Assistance Programs

When you are struggling to pay rent, the last thing you want is to be evicted. There are various government assistance programs in the USA that can provide housing subsidies and grants to low-income families to help them pay the rent. Some of these include Government and Housing Authorities, Faith-based Organizations, and Non-profit and Private Agencies. These rental aid programs are drafted to pay a tenant's rent directly to their utility provider or landlord, giving individuals the chance to evade utility disconnection or an eviction notice aiding them to prevent foreclosure on their home or apartment and settle their current bills.

The Emergency Rental Assistance program avails more than $25 billion to help households that are not in a position to settle their utilities and rent due to the CORONA VIRUS pandemic. The funds are availed directly to States, Indian tribes, U.S. Territories, and local governments. Grantees use the money to aid eligible households through newly created or existing rental assistance programs. For more information on rental assistant programs in your are please check out our article: Government Funded Programs That Help Your Tenant Pay Rent

Future Plans for Rent moratorium

The Government, through congress, ought to defend the CDC order in the courts and enforce, further extend, and strengthen the eviction moratorium until the pandemic ends. Addressing the moratoriums shortcomings should be of high priority through enforcing and improving the order. The Government should enroll more resources and protections to cater to the housing needs and health of America's lowest-income earners.

Stats on rent arrears

According to a Census Bureau survey, an estimated 15 million tenants defaulted their rent and were at risk of eviction at the beginning of the year. An estimated 16 million tenants did not expect to pay rent in February. By further extending the moratoriums, landlords and property managers are left saddled with the financial burden of housing to over 40 million tenants without adequate resources to do so, leaving residents to accumulate even more debt. According to the National Low Income Housing Coalition, tenants owed roughly 30 billion to 70 billion dollars in back rent to their landlords closing in December.

Even with December's $900 billion enrollment of a stimulus package providing an added $25 billion cushion in rent relief funds to renters, it was not close to enough. The Government's stimulus plan being drafted now entails an additional $25 billion to aid tenants, $5 billion to help relieve the strain of homelessness, and $5 billion for utility bills payment support. But more will be needed.

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