Resources for US Landlord and Tenants During the COVID-19 Outbreak

In this article you will find a breakdown of what the American Public Sector is doing to financially assist American Citizens.

Public Sector Assistance: Federal

Below you will find some government initiatives to make this crisis financially bearable for Americans:

Stimulus Checks

  • American adults will be granted the following one-time payments:
    • $1,200 payment to individual taxpayers
    • $2,400 payment for married couples filing jointly
    • An additional $500 per qualifying child under the age of 17
  • Income limitation: the payments start to phase out for single filers with adjusted gross incomeabove $75,000; married couples filing jointly with AGI above $150,000; and heads of household (that’s a single person with dependents), with AGI above $112,500. Stimulus amounts will be paid out based on 2019 income (or 2018, if an individual hasn’t yet filed their 2019 tax return).

Unemployment Benefits

  • In addition to state unemployment benefits, federal unemployment benefits provide up to $600 per week will be paid to individuals for up to four (4) months.
  • Benefits will last longer too. Regular state unemployment eligibility of 26 weeks has been expanded by an additional 13 weeks, for a total of 39 weeks.
  • The package expands unemployment insurance to those who don’t typically qualify: Gig economy workers who are classified as independent contractors and self-employed individuals.
  • Individuals who haven’t been laid off, but can’t work due to a variety of reasons related to COVID-19, would also be eligible for unemployment checks. These reasons would include a case where they were diagnosed with COVID-19, were awaiting a diagnosis, or had a family member diagnosed with the disease; Individuals who were scheduled to start a job and could not because their future workplaces had been shut down due to the COVID-19 pandemic, would also be eligible. Additionally, individuals whose head of household died directly due to COVID-19 will be eligible.
  • Workers who are furloughed, but haven’t been fully laid off, are eligible.
  • The 7-day waiting period before an unemployed worker can get benefits, which is a standard feature of most states’ unemployment systems, is being waived to help individuals receive cash as quickly as possible.

Paid Family Leave

  • Under the Families First Coronavirus Response Act, employees of businesses with fewer than 500 employees can get up to 12 weeks of family leave (with the first two weeks unpaid) if they must stay home with children whose schools and day care centers have closed because of the pandemic.
  • The expansion allows individuals who were laid off on or after March 1, but then rehired before the end of 2020, access to this family leave. (To be eligible for this leave, they need to have worked in that job 30-60 days before the initial layoff).
  • The benefit paid to individuals eligible for this family leave is two-thirds of pay, with a maximum of $200 per day, or an aggregate $10,000 per worker. In other words, it can be a maximum of $1,000 per week. (Employers cut the family leave checks and then get reimbursed by the federal government through the IRS.)

Paid Sick Leave

  • Employees (both part-time and full time) will get 80 hours of paid sick leave at full pay, capped at $511 per day, or an aggregate $5,110 per worker, with part-timers receiving a proportionate number of hours. Individuals who are unable to work or telework because they are under medical quarantine or treatment for COVID-19, suspect they have the illness or are ordered to quarantine at home are eligible for the pay.
  • Additionally, individuals who are staying home to care for someone else who has COVID-19 or is suspected of having it, or who have a child whose school or day care is closed because of coronavirus, are eligible for two-thirds of pay capped at $200 per day, or an aggregate $2,000per worker.

Mortgage Relief

  • Borrowers with federally backed mortgage loans—loans under Fannie Mae and Freddie Mac—who are experiencing financial hardship due to COVID-19 can request forbearance on their payments for up to six months. Borrowers must submit a request to their servicer and affirm that they’re experiencing a financial hardship during the crisis. Additionally, no foreclosures or evictions from properties with federally backed mortgages can occur during this period. During the mortgage forbearance period, interest will still accrue. However, additional fees, penalties or extra interest cannot be added to mortgages.
  • Please contact your bank/lender as soon as possible to arrange for a mortgage deferral.

Rent Relief

  • Renters have some eviction protection, but only if they live in a multifamily building or single family home that has a federally backed mortgage. Landlords cannot evict tenants of these buildings or charge any late fees, penalties or other charges for late rent payments.
  • Individual cities, counties, and States have also announced rent relief and/or eviction moratoriums.

Student Loan Relief

  • Interest will not accrue on federal student loans from April through September 30 and no payments must be made.
  • Even though payments are suspended during this time period, the Department of Education will treat it as if the borrower made a payment toward public service loan forgiveness or other forgiveness programs.
  • Borrowers who are in loan rehabilitation programs will also have the suspension period count toward rehabilitation. These programs are for borrowers working to pull their loans out of default.
  • Credit reports and scores will not be impacted during the suspension of payments period.
  • Wage garnishment and tax refund seizures will be halted during the forbearance period.
  • Additionally, the Department of Education announced on Wednesday it will be refunding approximately $1.8 billion in offsets to more than 830,000 borrowers. The announcement also requires private collections agencies to stop pursuing defaulted borrowers through such methods as phone calls, collection letters and billing statements.

Help for Businesses

  • Loans for small businesses are available through programs administered by the SBA.
  • Paycheck Protection Program (PPP):
    • Authorizes $349 billion for businesses to obtain loans of up to $10 million per applicant to be used on payroll, benefits, rent and other costs from February 15, 2020 through June 30, 2020. A substantial portion of the loan principal may be forgiven, but loan forgiveness is subject to reduction if staffing and salary levels are reduced and not restored. With some exceptions, such as restaurants and hotels, loan eligibility requires an aggregate employee headcount for the applicant and its “affiliates” of fewer than 500 employees. No personal guarantees or collateral is required for PPP loans. The formula for determining the size of the loan is tied to payrolls costs of the particular business.
  • Economic Injury Disaster Loans:
    • Expands the SBA’s economic injury disaster loans program to small businesses that suffer substantial economic injury as a result of COVID-19. An initial advance of up to $10,000 may be issued within three days of application and is not required to be repaid. The remainder of the loan will bear a low interest rate, and may be obtained in addition toa PPP loan, so long as both loans are not used for the same purpose.
  • Eligibility for both types of loans is highly fact-specific. The SBA’s expansive “affiliate” aggregation rules may preclude eligibility for many portfolio companies of private equity and venture capital funds. Policy makers are aware of the affiliation rule limitation and Cooley is continuing to monitor for any developments. For more information on the SBA Programs, please see our alert.

Public Sector Assistance: State

California

Limits to Foreclosure and/or Evictions

  • Suspends state preemption or restrictions of local government regulation of evictions, including post-foreclosure evictions. Localities may restrict evictions in cases where nonpayment was caused by income reduction or increased household expenses.

Illinois

Limits to Foreclosure and/or Evictions

  • No enforcement of residential eviction orders during duration of Gubernatorial Disaster Proclamation. This does not relieve individuals of the obligation to pay rent, make mortgage payments, or comply with other obligations that an individual may have under tenancy or mortgage.

Debt Collection

  • Debt collection agencies seeking to conduct collection activity at a location other than theiraddress of record, including remotely, are must provide IDFPR notice of each employee’s address where collection activity is being conducted within 14 days.
  • IDFPR has encouraged debt collection agencies and debt buyers to work with consumers to modify payment schedules or suspend all collection activity for a period of no less than 60 days.— IDFPR has reminded licensees to adhere strictly to the requirements of Section 805(a)(1) of the FDCPA and Section 9(a)(19)(A) of the Collection Agency Act, which prohibit communications at times and places that should be known to be inconvenient to the debtor. In light of the economic stress caused by the COVID-19 crisis, the Department will closely monitor adherence to these provisions.
  • IDFPR reminded debt collection agencies and debt buyers with respect to their accuracy duties under FCRA and encourages them to use disaster codes along with any other deferment or forbearance codes for any consumer who is unable to repay their debt to mitigate the credit reporting impact of the crisis.

Maryland

Limits to Foreclosure and/or Evictions

  • Foreclosures of residential properties and foreclosures of the rights of redemption of residential properties pending in the circuit courts are stayed effective immediately.
  • Residential eviction matters pending in the District Court of Maryland and all pending residential eviction orders are stayed effective immediately.
  • New residential foreclosures and foreclosures of rights of redemption after tax sale, and residential evictions are stayed upon filing.

Michigan

Limits to Foreclosure and/or Evictions

  • Bars removal or exclusion from leased residential premises or residential premises held under a forfeited executory contract, a tenant, a vendee of a forfeited executory contract, or a person holding under a tenant or vendee, except when the tenant, vendee, or person holding under them poses a substantial risk to another person or an imminent and severe risk to property. Effective through April 17, 2020.
  • Bars any person from entering residential property to remove or exclude from the premises, a tenant, a vendee of a forfeited executory contract, a person holding under a tenant or vendee, or the personal property of at tenant, vendee, or person holding under them, except when the tenant, vendee, or person holding under them poses a substantial risk to another person or an imminent and severe risk to property. Effective through April 17, 2020.
  • Bars sheriffs or constable, deputy, or other officer from serving process requiring forfeiture of leased residential premises or residential premises held under a forfeited executory contract. Effective through April 17, 2020.
  • The Executive Order does not expressly reference post-mortgage foreclosure evictions.
  • Extends deadline under which property forfeited to a county treasurer must be redeemed from March 31, 2020 until the later of: (a) May 29, 2020, or (b) 30 days after termination of the state of emergency. See Executive Order here.

New York

Limits to Foreclosure and/or Evictions

  • Executive Order: Orders that there shall be no enforcement of either an eviction of any tenant residential or commercial, or a foreclosure of any residential or commercial property for a period of 90 days (Per Executive Order No. 202.8 signed March 20, 2020).
  • DFI Guidance: Regulated entities should: forbear mortgage payments for 90 days from their due dates; refrain from reporting late payments to credit rating agencies for 90 days; offer mortgagors an additional 90-day grace period to complete trial loan modifications, and ensuring that late payments during the COVID-19 pandemic does not affect their ability to obtain permanent loan modifications; waive late payment fees and any online payment fees for a period of 90 days; postpone foreclosures and evictions for 90 days; and ensuring that mortgagors do not experience a disruption of service if the mortgage servicer closes its office, including making available other avenues for mortgagors to continue to manage their accounts and to make inquiries; and proactively reach out to mortgagors via app announcements, text, email or otherwise to explain the above-listed assistance being offered to mortgagors.

New Hampshire

Limits to Foreclosure and/or Evictions

  • All judicial and non-judicial foreclosure actions are prohibited, and all applicable provisions of any law, rule, or other regulation which would allow for the initiation of foreclosure proceedings are suspended for the duration of the State of Emergency.
  • Temporarily suspends initiation of and enforcement of evictions.

Texas

Limits to Foreclosure and/or Evictions

  • No trial, hearing, or other proceeding may be conducted in any action for eviction to recover possession of residential property unless a Court determines that the facts and grounds for eviction show the actions of the tenant pose an imminent threat of physical harm to the plaintiff or criminal activity. A writ of possession may issue, but the posting of the written warning and the execution of the writ of possession may not occur until after April 26, 2020.

Washington

Limits to Foreclosure and/or Evictions

  • Imposes an eviction moratorium through April 17, 2020 prohibiting residential landlords from issuing any eviction notice based on nonpayment of rent or termination of a tenancy unless the landlord attaches an affidavit attesting that the action is necessary to ensure the health and safety of the tenant or other individuals.

Washington D.C.

Limits to Foreclosure and/or Evictions

  • All evictions of tenants and foreclosed homeowners on or before May 1, 2020 are stayed.
  • Court hearings in landlord and tenant, small clams, debt collection, mortgage foreclosure, tax foreclosure, and housing court are continued and the Court will notify parties of new dates.