COVID Relief Bill Impacts Residential Landlords | KingSpry

COVID Relief Bill Impacts Residential Landlords

Posted on December 29th, 2020
by Karley Biggs Sebia

On Sunday, December 27, 2020, President Donald Trump signed a $900 billion COVID relief bill into law.

Incorporated into the more than 5,000 page bill are provisions that impact residential landlords.

Key provisions to be aware of include the allocation of $25 billion towards emergency rental assistance and an extension of the CDC eviction moratorium, imposed earlier this year, through January 31, 2021.

Rental Assistance

Under this most recent COVID relief bill, eligible Tenants may receive assistance with current and future rent and utility payments, unpaid rent or utility bills that have accumulated since the beginning of the coronavirus pandemic, and other housing expenses incurred due, directly or indirectly, to the pandemic. It also provides for the funding of services intended to assist tenants on matters related to housing instability, such as case management and tenant-landlord mediation services.

A household may receive up to twelve (12) months of assistance and may be eligible for an additional three (3) months if “necessary” to keep the household “stably housed”.  In order to be “eligible”, a household must: 1) have an income of no more than 80 percent of the area median income; 2) have one or more household members who can demonstrate a risk of experiencing homelessness or housing instability; and 3) have one or more household members who qualify for unemployment benefits or experienced financial hardship due, directly or indirectly, to the pandemic. This information must be recertified every three (3) months if the household is receiving ongoing rental assistance. 

As with prior COVID relief rental assistance funding, tenants may apply for assistance with entities designed by state and local governments to administer the funds.  It is then left to the individual states to establish any additional guidelines imposed on distribution of funds, including whether there will be a cap on monthly amount a tenant is entitled to receive and if there is a cap, whether the tenant may be held responsible for the difference between the rental relief and the actual month rent. 

Previously, Pennsylvania imposed a monthly cap of $750 on COVID relief rental assistance funding and the tenant was responsible for the difference between the amount paid under the rental assistance program and the tenant’s actual monthly rent.  The landlord was also required to waive the right to evict a tenant for any other rent due within 60 days from the date rent was due within the last month where assistance was provided.  It is anticipated that similar guidelines may be imposed on the distribution of these current funds.   

Once an application for rental assistance is approved by the administering entity, this COVID relief bill provides that rental payments are to be issued directly to the landlord, unless the landlord refuses to accept them.  If the landlord so refuses, the administering entity may provide a direct payment to the tenant to forward to the landlord.  A landlord may also apply for funds on behalf of the tenant, but the landlord is required to secure consent from the tenant.  

The bills also includes some incentive for landlords to work with tenants instead of moving to eviction as its language suggests that assistance is only available if the tenant is still occupying the property.  This means that if a landlord evicts a tenant, the landlord is not permitted to receive rental assistance funding for past due rent.

Eviction Moratorium

This COVID relief bill also extends the CDC’s order halting residential evictions of “covered persons” for “failure to pay rent or make a housing payment” through January 31, 2021.  That CDC order, set to expire on December 31, 2020, has been in effect since September 4, 2020. 

A more thorough discussion of the CDC’s order and its impact on landlords may be found at https://kingspry.com/cdc-halts-residential-evictions-for-non-payment-of-rent-through-december-31-2020/

The attorneys at KingSpry continue to monitor updates in the law impacting landlords in Pennsylvania. 

As more guidance becomes available on this most recent COVID relief bill, landlords must remain particularly vigilant to ensure they are in compliance with the most up-to-date legal requirements governing rental assistance funding and residential evictions.  Failure to do so could mean a loss of potential income and even criminal penalties for violation of the eviction moratorium.   We recommend landlords consult with legal counsel before initiating any eviction proceedings.    

This news item is a publication of KingSpry. It is meant to be informational and does not constitute legal advice.