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Eviction Ban Hard on Landlords and Property Managers

TALLAHASSEE, Fla. – With Gov. Ron DeSantis’ last-minute extension of a moratorium on foreclosures and evictions, renters and property managers continue to wade through uncharted territory.

The ban was first put in place by the governor on April 2, halting mortgage foreclosures and evictions related to nonpayment amid the coronavirus pandemic, and was set to expire June 2. Shortly before it was lifted, however, the governor moved to extend it to July 1, another month.

The ban does not stop rent from being due or halt renters’ obligation to make payments.

On top of the ban, an order from the Florida Supreme Court suspending the requirement for court clerks to issue writ of possessions, final documents issued in eviction proceedings, also provides a layer of protection for renters and is still in place.

While the extension will likely keep some from losing their homes this month, it has put significant financial strain on property managers and landlords who don’t know what’s next.

TALLAHASSEE, Fla. – With Gov. Ron DeSantis’ last-minute extension of a moratorium on foreclosures and evictions, renters and property managers continue to wade through uncharted territory.

The ban was first put in place by the governor on April 2, halting mortgage foreclosures and evictions related to nonpayment amid the coronavirus pandemic, and was set to expire June 2. Shortly before it was lifted, however, the governor moved to extend it to July 1, another month.

The ban does not stop rent from being due or halt renters’ obligation to make payments.

On top of the ban, an order from the Florida Supreme Court suspending the requirement for court clerks to issue writ of possessions, final documents issued in eviction proceedings, also provides a layer of protection for renters and is still in place.

While the extension will likely keep some from losing their homes this month, it has put significant financial strain on property managers and landlords who don’t know what’s next.

Property owners, managers feel pressure during eviction ban

For Mike DePaola, the operations manager of Premier Property Management in Collier County, the eviction ban has “definitely created an interesting terrain to navigate through.”

The company, which manages more than 750 properties in the county, started a program for renters prior to the eviction ban going into effect. This program allows Premier renters to defer rent balances for up to five months if they pay some of what they owe and allows that debt to be free of late fees and interest. The program is only applicable for renters who communicate with Premier and express that they are having trouble paying at this time.

Since putting this program in place, DePaola said that some of the residents have taken advantage of the situation. While he said that a majority, about 60%, of residents have been open and communicative throughout the pandemic, the other 40% have become “opportunists.”

“There’s the people who are taking advantage of (the eviction ban),” DePaola said. “We’ve had that happen where people just haven’t sent us any documentation and said, ‘Hey, we’re not paying because I know I’m not going to get evicted.’”

These residents, he said, have put a financial strain on the owners of the rental properties, as they have to pay mortgages and other expenses on the homes. Premier itself also owns some of the properties it manages.

“We have to sit there as the manager and say, ‘Hey, we’re kind of handcuffed at the moment,’” he said. “‘We can’t pursue this right now.’ That’s one of the hardest things to navigate through, is explaining to the owners.”

He said that Premier has been impacted also because the company runs on a “performance-based structure,” in which they collect management fees on the gross income that’s been collected.

“If there’s no rental income that’s been collected, there’s no management fees to collect,” he said.

He noted, however, that new units are being filled about 20% faster in April and May than last year, with the demand outpacing the supply.

“People were looking to move and filling new units at a greater pace than they were the previous year,” he said. “We’re hoping that … will mitigate a lot of the potential losses.” He attributes this to people not wanting to spend their time and vacations in densely populated locations, such as New York, due to pandemic-related safety concerns.

He said he expects some of the residents who have taken advantage of the situation to try to “cut a deal” when the ban is lifted and pay Premier some of the money they owe. However, he said the company is not interested in continuing a relationship with those tenants.

As of now, DePaola said that Premier is not planning on pursuing actions to collect the full amount owed from renters who have not paid.

Instead, the company is currently considering a “cash-for-keys” route, in which Premier would pay the renters a small amount to turn in their keys and permanently leave their rental property. DePaola said that this would allow the renters to not have an eviction on their record and would allow Premier to move forward with a clean slate.

“(We’d say), ‘This isn’t going to work long-term anyway due to how you conducted this and you’re behind so much, so here’s $500 to help you get back on your feet,’” he said. “We plan on taking the position where we’re saying, ‘There’s no more negative that needs to be done at this point.’”

Due to the majority of residents who have been grateful and receptive of the deferment program, DePaolo considers the program and the company’s response to the pandemic successful.

“I thought it was an overall success of us getting ahead of it,” he said. “Giving these plans and allowing people to feel that they have somewhere to turn, that worked.”

Eviction ban does not get to root of problem, some experts say

Amanda Gill, the government affairs director with the Florida Apartment Association, said that eviction bans are “well intentioned” but “are not a cure for this crisis because they do not address the underlying symptom that has led us to where we are today.”

According to Gill, the issue is that Floridians have been left without the financial resources to pay for rent and other expenses due to a sudden and unexpected loss of employment.

“Therefore, the best solution to help address housing security in the long term is to provide rental assistance to those experiencing a financial hardship due to COVID-19,” she said.

She noted that the CARES Act that was passed by Congress only provides mortgage forbearance flexibility for federally backed mortgages, leaving a “majority of multifamily mortgages without protection at a time when housing providers across the board are proactively working with residents who are unable to pay rent.”

“Overall, a lack of rent revenue can create a far-reaching financial impact for housing providers,” she said of the ban.

Her advice for tenants who will struggle throughout the pandemic and when the eviction ban is lifted is to keep an open line of communication with housing providers. She noted the “flexibility” that apartment operators are offering at this time, with options such as payment plans and rent deferments.

Janet Portman, a California lawyer and executive editor of NOLO, a publisher of do-it-yourself legal guides, also stated that eviction moratoriums in Florida and across the country do not solve the issue at hand.

“Extending it just to July 1, I was going to say it’s kicking the can down the road, but really it’s kicking the can just a few feet ahead of you because the avalanche of terminations and evictions for nonpayment of rent has just been postponed by 30 days,” she said.

The only way for both sides, landlords and tenants, to not be negatively impacted, Portman said, is the government providing rent relief. She noted that actions like this have been taken before, such as when the federal government authorized the $80 billion bailout of the automotive industry in the wake of the 2008 financial crisis.

She said that this should take the form of direct payouts to landlords who can show that they have tenants who are not paying the rent.

“If you don’t do that, you’re going to have widespread homelessness if landlords are allowed to kick out tenants, or you’re going to have the rental industry go into a free-fall,” she said. “It’s absurd to think that someone that couldn’t afford to pay May or June rent because they lost their job, on July 1, they’re suddenly going to have not only July’s rent but the back-rent too.”

While more businesses have begun to open up in the state and some have returned to work, the need for assistance with rent has not tapered off, according to Erin Chokr, a communications director with Catholic Charities.

Catholic Charities, Diocese of Venice services the Southwest Florida region and has been providing financial assistance to those impacted by the COVID-19 pandemic.

“There’s definitely still the need,” Chokr said. “People are still reaching out for us about support with rent, mortgage payments, utility payments.” She said that from the end of March 24 through April 30, 33% of the phone calls that the charity was receiving from the 10 counties that it services were in regards to help with rental payments.

Local renters like Stefanie Ginas, 30, who lives in Brittany Bay Apartments in Naples, are still feeling the financial fallout from the pandemic and welcome any extra form of security. “I think it’s great that they extended (the eviction ban) for the people that need it or are in fear that they’re not able to pay their rent,” she said.

Ginas, herself, has been able to pay rent each month so far but has yet to receive any funds after filing for unemployment benefits. She lost a month of pay due to being furloughed from the Naples dental office she works for, Mission Hills, on April 1 amid the pandemic. Ginas returned to work on May 4 after the office reopened.

For this month’s rent, she was able to use some of the federal stimulus check she recently received, but due to all of the other living expenses she had to cover without the assistance from unemployment payments, half of her rent still had to be charged to her credit card.

“It’s been stressful to be honest,” she said. “We’re still dealing with the side effects of just trying to catch back up now.”

Tenant, landlord disputes could see spike in coming months

As the eviction ban will eventually lift and the negative economic impacts of the pandemic continue, Southwest Florida attorney Shawn Seliger said that he expects to see more property disputes between landlords and tenants in the near future.

“Unfortunately due to the COVID-19 pandemic and the serious economic downturn that we’re experiencing locally and nationally, I expect to see a huge uptick in eviction and foreclosure cases, and as a community, we’re going to have to work together to effectively deal with these issues,” Seliger, the owner of the Law Offices of Shawn Seliger, said.

In the current situation, which poses significant financial stresses for both parties, Seliger stated that its critical for tenants and landlords to make a concerted effort to work together before launching into legal action.

“I want to emphasize how important it is for landlords and tenants both to try to be as friendly and cooperative with one another as possible, especially during a highly emotional situation when our community is affected by COVID-19, … in order to achieve productive results with one another and to minimize a potential for litigation.”

He also expressed the importance of both parties following the terms and conditions of written leases, having verbal communication followed up with confirmation in writing and having access to a knowledgeable and experienced real estate attorney in any potential legal dispute.

© 2020 Journal Media Group

                                                                                                                                                                                                                                                                                                                

Information provided by Florida Realtors.  Click here to see the original article.

Reprinted with permission Florida Realtors. All rights reserved.

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