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Understanding Eviction Moratoriums and the Effect on Real Estate Investors

The Centers for Disease Control and Prevention (CDC) announced a nationwide moratorium on evictions that was updated on September 2, 2020. The moratorium was put in place to help slow the spread of COVID-19. Below, you can learn more about what the moratorium protects and how it might affect you as a property owner. 

What Is an Eviction Moratorium?

An eviction moratorium is a temporary stay on eviction proceedings. It simply means that property owners may not evict their tenants without exceptional cause. The economy continues to suffer due to the impact of the pandemic, and it has left millions upon millions of people out of work or with significantly reduced pay. As a result, these individuals are struggling to pay their rent and would almost certainly face eviction if not for the moratorium. 

Are There Any Guidelines?

However, tenants must still meet certain guidelines in order to qualify for protection under the moratorium. For example, they must be able to prove to the court that they have attempted to secure government rent assistance. They must also prove that their income has been substantially reduced and that they would almost certainly be homeless (or forced into a living situation that may lead to illness due to the proximity of others) if they were evicted. Finally, they must meet income guidelines, and they must also make partial payments as frequently as possible. 

Can Landlords Evict Tenants for Any Reason?

Though the moratorium was put in place to help those who simply cannot pay rent due to the economic effects of the pandemic, many property owners know that failing to pay rent is not the only cause for eviction. For example, many landlords know what it’s like to have tenants who simply ignore the “no pets” clauses in their leases; this can lead to tens of thousands of dollars in damage. In other cases, tenants may simply neglect the home and fail to report potentially devastating issues, such as a termite infestation or mold growth. Typically, landlords would be able to file for eviction if they can prove their tenants have not abided by leases or that they have caused property damage.

What Landlords Can Do

The CDC’s moratorium is highly controversial, and some states – including North Carolina – question whether it’s even Constitutional. Each location and state is handling the moratorium differently. For example, while you may not be able to evict a tenant for nonpayment, that eviction may be allowed if you can prove that your property is at significant risk or that the terms of the lease have been broken. Other states have processed evictions up to the point of tenant removal. Still others will not even allow landlords to file an eviction with the court. 

Landlords who are concerned about how the eviction moratorium will affect them can reach out to their individual cities and states for information. Fortunately, many financiers are also offering payment deferrals to those property owners who can prove they have lost significant income due to the CDC’s stay on evictions.

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