The relationship between local, state, and federal governments have been in the forefront of battling the COVID-19 crisis. From shelter in place orders statewide eviction ban, and the federal stimulus package, cities, counties, the state of Texas, and the federal 0government have enacted laws and regulations that directly impact AATC members’ operations.
AATC, TAA, and NAA government relations teams are proactively engaged with government officials to ensure that our properties are open; our assets are maintained; and our financial obligations are met.
Eviction moratoriums are one the most onerous aspects of the current crisis. The recently passed federal stimulus bill (CARES act) contained two onerous eviction restrictions: 1) 90-day eviction moratorium for those owners who seek mortgage forbearance for federally backed loans; and 2) 120-day eviction moratorium for all properties that have federally backed mortgages.
If you are uncertain if the above provisions apply to your portfolio, check with your lender or carefully review your loan documents.
For those owners seeking mortgage payment relief, during the forbearance period, the law prohibits:
- issuing a notice to vacate.
- initiating an eviction filing; and
- assessing fees, penalties or other charges on residents for nonpayment or late payment of rent.
Additionally, a multifamily borrower that receives forbearance under CARE act may not issue a notice to vacate until after the expiration of the forbearance period or require a renter to vacate until 30 days after the notice to vacate has been issued.
The most onerous eviction provision in the CARES act creates a temporary eviction moratorium for 120 days beginning on the date of enactment. The moratorium applies to rental housing providers whose properties are insured, guaranteed, supplemented, protected, or assisted in any way by HUD, the Federal Housing Administration, Fannie Mae, or Freddie Mac; or participate in the Section 202 Supportive Housing for the Elderly Program; the Section 811 Housing for Persons with Disabilities Program; Housing Opportunities for Persons With AIDS (HOPWA) Program; McKinney-Vento Homelessness Assistance Programs; Section 236 properties; Section 221(d)(3) below market and reduced interest rate program (BMIR); the Section 8 Housing Choice Voucher (HCV) Program; Section 8 project-based housing; HOME grantees; rural housing assistance programs; and Low Income Housing Tax Credit (LIHTC) properties.
In addition, owners covered by the above, are prohibited from initiating an eviction filing, or assessing fees or penalties on residents for nonpayment of rent. Additionally, rental housing providers covered under this section may not issue a notice to vacate until after the expiration of the moratorium or require a renter to vacate until 30-days after the notice to vacate has been issued.
This provision is separate and apart from the forbearance requirements.
AATC members’ properties who are covered by either the 90-day or 120-day moratorium should communicate to residents that suspension of evictions in no way removes a resident’s responsibility to pay rent or comply with the terms of the lease agreement.
For those AATC members who own properties in Texas that: 1) do not have a mortgage or 2) have financing not insured by government entities, you are under the March 19, the Supreme Court of Texas Court emergency order that suspends most residential evictions through April 19, 2020. There is a limited exception for an eviction based on a person posing an imminent threat of physical harm to another resident or the rental property’s staff, or for criminal activity.
The Texas Supreme Court order applies statewide. Courts may accept new filings, but citation will not be served until after April 19, and the time periods associated with the filings are suspended. Similarly, courts may issue writs of possession, but writs will not be executed until after April 26.
As soon as new directives are received, the Justice of the Peace Court having jurisdiction will contact litigants to notify them of their new court date.