Eviction moratorium strains local landlords
When the Coronavirus Pandemic broke out in the United States in March 2020, Congress passed that CARES Act. Part of that legislation included a federal moratorium on evictions. The idea was the United States should keep people sheltered during a global pandemic, regardless of whether they could pay their rent in an economy that was quickly screeching to a halt.
The federal eviction moratorium was replaced by a CDC order in September, which has now been extended several times, with the latest order not set to expire until June 30.
According to the order, tenants are not relieved of any obligation to pay rent, make a housing payment, or comply with any other obligation that they may have under tenancy, lease or contract. Nothing in the order precludes the charging or collecting of fees, penalties, or interest as a result of the failure to pay rent or other housing payment on a timely basis.
The order requires tenants to prove they could not pay rent due to the Coronavirus Pandemic. Landlords can still proceed with summary ejectment on any grounds other than non-payment of rent due to the pandemic.
“It [the Eviction Moratorium] has had an impact on the number of evictions we’ve seen in court. However, we’ve still had a small number of evictions for holdover cases or for other lease violations that don’t involve non-payment of rent. But as a general rule, that has had quite an impact as far as the number of cases that we see in court,” said Roy Wijewickrama, Chief District Court Judge for the 30th Judicial District.
Landlords can go to court to evict tenants if they, for instance, trash the property, own a pet on the property when the lease prohibits it, or, most commonly, for remaining in a property after the lease is over. These types of cases have been ongoing throughout the pandemic.
According to Wijewickrama, prior to the eviction moratorium, the majority of summary ejectment cases were for non-payment of rent. Without the ability to see most of those cases through while the moratorium is in place, the number of eviction appeals being heard in district court has reduced dramatically.
Austin Lee is from Bryson City. He was a teacher for 16 years before leaving that post to manage his properties full-time. The market had been improving and putting his time and resources into being a landlord turned out to be more lucrative than teaching.
When the eviction moratorium went into place, he understood its importance, but, he says, he was worried.
“It was problematic. You know, for somebody like me, the taxes never stopped, the mortgage never stops, the water bill never stops, that stuff just keeps going on,” said Lee.
Of his 24 tenants, only three went through periods that they could not pay rent due to the strains of the pandemic.
“I had a couple who lost work because of COVID of course,” said Lee. “And I told them, I’m not gonna put you on the street, we’re all in this bad situation. We just have to see what happens, we’ll figure it out. That was my thought process. The whole time was I’m just going to work through it with everybody because I know that unemployment’s coming, I know the stimulus is coming, and it did. And the vast majority of them paid and got current as soon as that stuff kicked in.”
For a local landlord though, having even a few tenants unable to pay causes issues down the line.
“It definitely stretched me thin, you know, what I had to do was basically just not do any kind of upgrades or maintenance during the time, just because the months were lean,” said Lee.
For instance, there was a roof that needed fixing. It was not about to cave in, or leak on a tenant, but it was nearing time for replacement. That project, and several other non-critical maintenance jobs got pushed back due to less monthly income. Lee saved money where he could, mowing and providing general upkeep himself instead of paying someone else to do the work.
“I keep reserves for emergencies and that’s where they kick in and come in very handy, but it was incredibly scary because, had a lot of people decided to not pay and for a long period of time, it would have become a huge problem,” he said.
Things are a bit different for the big guys. Michele Rogers is property manager for Select Homes of Waynesville, which has around 400 properties. She also belongs to the property management division of North Carolina Realtors. Only a handful of tenants, who Rogers knows and is working with, have been unable to pay rent during the pandemic. Select Homes maintained a rent collection rate of more than 96 percent throughout the eviction moratorium.
The CDC order is set to expire June 30, meaning summary ejectment cases for non-payment of rent, even if due to the effects of the pandemic, may continue after that date.
“I do anticipate an increase in the number of evictions once the moratorium ends,” Wijewickrama said.
Rogers is also concerned about how lifting the moratorium will impact her business.
“My concern as a property manager is as soon as the moratorium is over, it’s going to actually lead to a housing crisis because so many people are going to be evicted,” she said. “And to make that worse, there is nothing available for rent right now. When we do get rentals available, we are renting houses in less than two days.”
To help prevent this crisis from happening, Rogers says, Select Homes is giving their tenants a list of resources and organizations that may be able to help them stay housed.
“I just feel like that’s our job,” she said. “Our job is more than just to collect the rent. We have to stay engaged in the community and we have to help people stay in there. That’s what we want to do. It’s a win-win.”
For Lee, the scariest part of all of this is the precedent it could set for the future.
“Personally, I just think it’s unfair to tell a business owner that they can’t run their business the way they should. The scariest part for me is, I hope it’s not the tip of the iceberg when they start trying to mandate and dictate a lot of stuff like that. If so, I’ll probably get out of the business, but by and large, it worked out good because I’ve got great tenants, just super good people.”