With California’s new eviction protections for tenants with unpaid rent valid through March 2022, landlords struggle to stay financially afloat as they wait for rent relief funds.
Jonathan Madison, an eviction attorney, told The Epoch Times his clients have turned to taking out loans and filing for bankruptcy waiting to receive funds as their tenants fail to pay rent.
“A lot of landlords and property owners will be left in limbo while they wait for the money,” Madison said. “They still cannot evict their tenants for unpaid rent, so the effects of that [are] landlords who are unable to pay their mortgage, landlords who have to take out loans, end up incurring more debt, dipping into their savings account, having their credit reports negatively impacted, and ultimately taking their properties off the market.”
As the statewide eviction moratorium sunsets on Sept. 30, the new eviction protection is set to go into effect on Oct. 1, which will allow tenants to evade eviction by applying for COVID-19 rent relief until March 31, 2022.
While some landlords have viewed the ending of the moratorium as a relief to proceed with evicting unwanted tenants, Madison said the overlooked details with the newly implemented eviction protections essentially act as a continuation of the eviction moratorium.
“There are a number of landlords and tenants who don’t know or even understand that no eviction for unpaid rent during COVID-19 can take place through March 31 of next year,” Madison said. “That’s in large part because of the availability of rental assistance to cover the back rent, [but] there’s no guarantee on when the landlord or property owner is going to receive that money.”
On paper, the state is providing a guarantee that all landlords will receive the money applied for, Madison said. But it remains unclear exactly when landlords will receive the funds.
Following the original eviction moratorium declared on March 1, 2020, Madison has worked with landlords who are questioning their livelihood, as it’s been nearly a year and a half since applying for relief funds.
One of Madison’s clients is a senior couple with one retirement property. The tenants occupying their home stopped paying rent when the pandemic began. The couple has since opted to take out loans and filed for bankruptcy.
Despite having applied for rental assistance, the couple is waiting to receive their funds while watching the potential of their retirement property fade. When the couple does receive the funds, they’ll continue to remain at risk of financial instability, Madison said.
If the couple doesn’t receive the funds, it will be over two years of waiting for rent relief when the March 31 deadline passes. However, Madison said that even if the couple does receive the financial assistance, it won’t be enough the get landlords to where they once were.
“Even the repayment of all that back rent owed is not going to compensate them for any interest on the loan,” he said. “It’s not going to account for what they had to dip into for their savings. Interest on its own is over and above principal. The back rent is not going to fix their credit report and different things that happened to them as a result of not being paid.
“There’s no sort of safety net for those individuals, landlords, or property owners who have had their applications denied.
“It is an application; I think people are looking at this as a guarantee. I haven’t heard of anyone being denied yet; it doesn’t mean it’s not happening.”
Despite the government already extending the deadline to apply for rent relief, Madison foresees another extension to follow due to the potential inability to distribute money at a quick enough pace.
“There’s a very strong possibility that they’re going to get extended again and again until they actually distribute all the money.”
As of Sept. 29, the state has received over 300,000 applications for its COVID-19 Rent Relief program and has paid out nearly $650 million.