Evictions and the CARES Act
Congress passed the Coronavirus Aid, Relief, and Economic Security Act’’CARES Act last week and most of the news has been about the payroll protection program and the checks that the government will be sending out to many Americans in the coming weeks.
Section 4023 of the Act relate to forbearance of loan payments for multi family homes and a moratorium on certain evictions. Here is what you need to know:
If you have a federally backed multi-family mortgage loan and are experiencing a financial hardship because of COVID-19, you can request a forbearance for up to three 30 day periods on your mortgage and should reach out to your lender for relief. To do so, you had to have been current with your mortgage as of February 1, 2020. However, these sections apply only to properties designed for 5 or more dwelling units
If you receive a forbearance on your mortgage, during the time of the forbearance you cannot evict a tenant for non-payment of rent or other charges, nor can you charge any late fees, penalties or other charges.
You also cannot send a notice to quit to that tenant, for any reason until at least 30 days after the forbearance expires.
Section 4024 of the Act creates a 120 day moratorium on evictions on “covered dwellings” beginning March 27 and running through approximately July 27. During this time period a landlord who has a federally backed mortgage for any residence – regardless of the number of units in the building — cannot evict tenants for non-payment of rent or other charges. Late fees are not permitted. Notices to quit cannot be sent until at least 30 days after the 120 day moratorium.
Nearly 2/3 of mortgages are federally backed, so you should check with your lender and find out if you might qualify for forbearance.
Finally, remember that forbearance does not mean forgiveness. You are still responsible for the payments, but you have a break from paying.