What Landlords Should Know About the December 2020 COVID-19 Rent Relief Act
There has been extensive press coverage about the need for an eviction moratorium during the COVID-19 pandemic, but little about the effect that moratorium has on residential landlords. Congress attempted to help landlords indirectly in the original CARES Act, by making money available for rent relief. However, there wasn’t sufficient money, tenants were at a loss where to go to ask for such relief, and some tenants had no incentive to even ask for relief. The $900 billion December 2020 COVID-19 relief bill includes $25 billion for the Emergency Rental Arrears Program (ERAP). The new law allows landlords to apply for the tenant, if necessary. Both the tenant and landlord will benefit from this new rent relief law.
Quick action with some initial answers
When then-President Trump signed the new COVID-19 relief bill into law, the Department of Treasury took quick action on the rent relief money. Within days, a deadline of January 12, 2021, was set for eligible state and local governments to apply for money. An eligible local government is any such entity with a population of at least 200,000. St. Louis County applied for $30 million, and St. Louis City applied for $9 million; in Illinois, St. Clair County applied for $7 million, and Madison County applied for $7.8 million. In theory, this money should be awarded to the local governments and possibly available to the general public by February 11, 2021. Even if this occurs, there will be substantial questions from all interested parties such as:
- Which branch or department of the local government will have the money?
- Is a new form available to apply?
- What will a landlord need from the tenant to complete the application?
- Will the landlord get full payment?
- What about utilities?
Some of these can be answered now, but many are still open questions. St. Louis City set up St. Louis City CARES for the first round of the ERAP, and it appears it will be the entity accepting applications for the December 2020 funds. A specific application page has not been found on St. Louis County’s COVID-19 website. The state of Missouri is already allowing applications here.
The state’s site may be predictive of what St. Louis City and County will do. “The program will reimburse landlords for past due rent payments (rental arrears) for the period beginning April 1, 2020. Applications must be completed and submitted by landlords in collaboration with their tenants. A one-time payment of up to six (6) months of rental arrears will be made to the landlord on the tenant’s behalf. Requests are subject to the established rent maximums outlined below.” In exchange for this full or partial payment, the landlord will also have to agree to not evict the tenant at issue for 120 days after the application was filed.
Required elements for tenant eligibility
A landlord is only allowed to apply for relief if the tenant qualifies as an “Eligible Household.” The landlord will apply to the “Grantee” (the state or local government). A tenant qualifies as an eligible household if:
- One or more individuals are obligated to pay rent on a residential dwelling, and with respect to those individuals:
- one or more individuals within the household has:
- Qualified for unemployment benefits; or
- Experienced a reduction in household income, incurred significant costs, or experienced other financial hardship due to COVID-19;
- one or more individuals within the household can demonstrate a risk of experiencing homelessness or housing instability, which may include:
- a past-due utility or rent notice or eviction notice;
- unsafe or unhealthy living conditions; or
- any other evidence of such risk, as determined by the grantee;
- the household has a household income that is not more than 80 percent of the area median income for the household.
- one or more individuals within the household has:
The conjunction “and” was used with respect to these three requirements. Thus, an eligible household must have economic difficulty, be in danger of eviction, and meet the median income requirement. The grantee is responsible for setting a standard for the median income determination. Finally, there will a prioritization of funds for those eligible households whose income does not exceed 50 percent of the area median income and for those eligible households where one or more individuals have not been employed for the 90 days preceding the application.
Landlord action for back rent and future rent
Under the express terms of the law, the landlord can seek (for the tenant’s benefit) past due rent and future rent for up to three months. The landlord must obtain the signature of the tenant on the application and must provide documentation of the application once it is filed. Any payment received by the landlord must be used to satisfy the tenant’s obligations to the landlord. There are some limits on awarding relief for future rent.
Any business owner who would like guidance may contact Paul Petruska at firstname.lastname@example.org or your regular Greensfelder contact.
 This list of all eligible applicants can be found here: https://home.treasury.gov/system/files/136/ERA-List-of-Eligible-Local-Governments-Final.pdf