Why landlords across the nation are disappointed by the CARES Act

Why landlords across the nation are disappointed by the CARES Act

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 The CARES Rent Relief Program was designed to provide relief to landlords between March 1, 2020 and December 30, 2020  but is instead leaving them distressed

Landlords were told that the CARES act would provide them with a monthly rental assistance up to $750 per lessee (or up to 100 percent of the monthly rental) to cover rent incurred for a maximum period of 6 months.

These monthly rental assistance payments were supposed to be made directly to the landlords, through ACH payments or by check, each month, according to this article that was published last year in the beginning of July. Well, we’re currently in the middle of January in 2021 … so, what happened? 

How the CARES Act “Failed Miserably” to Relieve Landlords 

One Pittsburgh-based article headlined: “The program failed miserably.” Another landlord in Pittsburgh named Darlene Boyd said that she knows renters are protected from eviction due to financial issues related to COVID-19, but as a result of that renter’s relief, landlords such as Boyd are looking for help now, too. 

The way these Pittsburgh-based landlords are feeling is, by extension, an accurate depiction of how landlords throughout America are feeling. While there is assistance for landlords with the CARES Act forbearance that allows homeowners to pause payments with the assurance that landlords will have to be repaid in the future, there is still the current anxiety of landlords not being able to profit from a property that is being rented out. “I’m just renting it out for what my mortgage payment was [sic],” Boyd said, adding that it’s a challenge to keep up with the payments.

 One of those articles comments that landlords in Pittsburgh said they feel forgotten and failed by the Cares Act that was supposed to help protect them and their tenants. “Some haven’t taken a paycheck in 9 months and fear what could happen the longer this pandemic persists,” comments the article.

 Robert Dean, a landlord for 25 years with properties throughout Pittsburgh (a sizable 26 buildings and 41 tenants) expressed his frustrations first-hand with the program not living up to its advertised expectations. Apparently, he “hasn’t been able to take a paycheck since March of last year” — an issue that the CARES Act was designed, in part, to combat. And, apparently, Dean isn’t the only landlord facing this issue.

 After having conversations with fellow landlords, he learned that others are struggling with the same issue, some with over 100 properties having not received any money. Dean reached out to the Channel 11 to receive more information regarding the lack of appropriate funds, but to no avail.

 Why the Lack of Funds and What Happens Next?

 One reason for the lack of funds could be failing to submit proper documentation. Nonetheless, it’s clear that the CARES Act could’ve done a better part to support the whole relationship between the leaser/lessee or distribute funds accordingly. However, several weeks ago (December 27, 2020) the COVID-19 relief bill was signed, acting as a stimulus package that would impact landlords in two important ways.

 First, the relief bill extends the current CDC eviction moratorium from December 31, 2020 until January 31, 2021. This means that landlords cannot evict tenants for nonpayment of rent who have provided, or provide before the possession turnover, a CDC declaration.

 Second, the relief bill provides an additional $25 billion to help individuals and families with rent and utility payments. The assistance is intended to assist with rent and utility bills — both current and those that have accumulated since the beginning of the pandemic — and other housing expenses incurred because of the pandemic.

 Unlike the CARES Act program, with this latest relief bill, if a landlord decides that it does not want to participate in the assistance program, its tenant(s) may still receive assistance, and the payments will be made directly to them.

 While this new bill is still being tested out for efficiency, we can only hope for the best.

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