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Congressional Moratorium on Evictions

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  • Congressional Moratorium on Evictions

    Better write your Representatives. The latest stimulus bill in the House has a 12 MONTH moratorium on evictions. Page 962. Why would anyone pay rent? The rental business will cease to exist. https://docs.house.gov/billsthisweek...16hr6800ih.pdf

  • #2
    Since it prevents filing depending on state regs the actual time a tenant can stay without paying rent will be expanded by an additional 60-90 days. Someone kindly point me to the section that indicates I don't have to pay the mortgages on my rental properties for the next year.

    "(b) MORATORIUM.—During the period beginning on 17 the date of the enactment of this Act and ending 12 18 months after such date of enactment, the lessor of a cov19 ered dwelling located in such State may not make, or 20 cause to be made, any filing with the court of jurisdiction 21 to initiate a legal action to recover possession of the covered dwelling from the tenant for nonpayment of rent or 23 other fees or charges."

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    • #3
      There is precedent in some other countries affected by Covid-19. The trend as I see it (Although I maybe wrong in my perception) is:
      1. Monatorium on Residential evictions
      2. monatorium on mortgage arrears (or non-foreclosure grace period extension for 6 months). This gives some relief to landlords but basically both these measures are for the general population (voters).
      3. Movements to Legislated requirement for commercial landlords to allow either reduction in rents by businesses significantly affected by Covid-19 or deferral in rent.

      wrt 1: this is bad for residential landlords and a headache. It shifts the balance of power in the Tennant-landlord relationship. Practically though, it would be hard to evict anyone in this period anyway, but this just makes it open slather for non-rent payment for a period. To many it may mean “I don’t have to pay rent for 6 months”. With the other government support, hopefully rental arrears will not be affected as much as one would suppose would normally happen with such legislation.
      wrt 3: Share the pain to commercial landlords. Presumably there would also be measures enacted to prevent commercial lending clauses being activated with a reduction in rent otherwise this could trigger a meltdown in the commercial space. It will be interesting to see what happens in retail, particularly areas with a significant number of restaurants. I am keeping an eye on this. Distressed selling might take another 12 months to emerge.

      Bank lending managers I spoke to 2 weeks ago were nervous about issuing residential loans above 1M and commercial. It might be a challenge to get a substantial loan approved at the moment.

      Do you have any thoughts about strip retail in the next 2 years ?

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      • #4
        Originally posted by Dont_know_mind View Post
        wrt 1: this is bad for residential landlords and a headache. It shifts the balance of power in the Tennant-landlord relationship. Practically though, it would be hard to evict anyone in this period anyway, but this just makes it open slather for non-rent payment for a period. To many it may mean “I don’t have to pay rent for 6 months”. With the other government support, hopefully rental arrears will not be affected as much as one would suppose would normally happen with such legislation.
        Unfortunately it is more than a headache if my tenants have a choice to either pay me the $19,200 they committed to or not without penalty. Deferring my mortgage payment doesn't assist with the financial loss, my time and liability. This is quite the cluster and I hope there is a fair solution which includes me receiving the rent we agreed upon.

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        • #5
          Yes. Government is intervening in private commercial transactions.
          English case law is substantially different from the French/Roman legal approach. One is based substantially upon legal common law and precedent. The other is the “emperor” basically declares laws as he sees fit. The old rules do not matter.
          Property rights and private transactions have a new set of rules. How would a property owner reassert old case law (it has been wiped out)?
          The approach of intervening on “eviction” and “collections” as a short pause was a drastic first step.
          Now you have Congress not subsidizing the lessee, instead adopting the Roman law approach. Don’t be surprised if lessor still has responsibilities without collecting rent.
          Strip Retail- the legal landscape is a higher risk to the owner. Legal rights (case law) have been suspended locally and looks like an attempt to make it national. I doubt it turns out improving a lessor’s returns.

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          • #6
            There's less than a 1% chance this will pass the Senate. Like many bills, this wasn't made to help the American people. It was made to help come election time.

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            • #7
              Hi, here’s a bunch of money from the taxpayer. Oh, you don’t have to use any of it to meet your contractual obligations.

              Yeah, I’m sure the Congress critters and activists who drafted this wouldn’t mind if I stayed in their house for a year or more without paying rent while possibly trashing the place.

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              • #8
                Interesting comment on TV.
                Lobbyists were excluded from the original PPP.
                Buried in this supposedly is the organization of lobbyists. They want PPP! Why, that organization coordinates the lobbyists to write the bills! Someone needs to get paid because the staffers don’t write. They manage the lobbyists.

                This reminds me of a choice of techniques in dealing with the IRS.
                * Give them only the exact document that answers their request
                * Give them the 40,000 or so documents that are responsive to their request, but make them find the answer.
                This proposal used lobbyists instructed to include virtually every thing possible. It creates a huge mess intentionally to hide the real items that are actually needed or preferred. Result, delay and innocently blame the opposition for no progress.
                Purely election politics.

                For your enjoyment, how to deal with the IRS:

                https://youtu.be/TfMJ8yXBPmo

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                • #9
                  To me no evictions = no rent = no $ to pay property taxes. Everyone loses. There is no real estate investment property that will be safe from disaster if the government won't let people return to work.

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                  • #10
                    Originally posted by dennis View Post
                    To me no evictions = no rent = no $ to pay property taxes. Everyone loses.
                    Bring up an option for a moratorium on property taxes in the House and you'll get laughed out of the room.

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                    • #11
                      The counter legislation should be 1% loans to landlords for the missing rent. A loan that can be petitioned for forgiveness if the tenants do not end up paying the back rent. Basically PPP for landlords. Then I'd have no opposition.

                      Even though it has low chances of passing federally, it gets the juices flowing of residents & elected officials in certain states. And that could be a problem.
                      $1 saved = >$1 earned. ✓

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                      • #12
                        I don’t have to deal with tenants so I don’t mind what happens.
                        I guess it is more a state thing.
                        Interestingly, Covid-19 has affected a lot of countries and the US is not the only one.
                        As I mentioned, quite a few developed countries have enacted 1-3 and also in some instances refunds of rates/property taxes proportionate to the reduction in rent where this was attributable to covid-19.
                        Will it happen in the US ?
                        I mentioned previously that wages programs were starting in other countries like the UK. People said this was impossible in the US and lo and behold something similar gets enacted. It shouldn’t be a surprise if it happens in the US if it has happened in other countries that have been affected by covid-19.

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                        • #13
                          Originally posted by dennis View Post
                          Better write your Representatives. The latest stimulus bill in the House has a 12 MONTH moratorium on evictions. Page 962. Why would anyone pay rent? The rental business will cease to exist. https://docs.house.gov/billsthisweek...16hr6800ih.pdf
                          This whole thing is a mess. Even if the government had good intentions with this stuff, they have no idea about the unintended consequences. I still think that there is going to be a lot of dominoes that have yet to fall. I don't know what they are, but I have a feeling we aren't out of the woods of the economic side of this mess.

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