3 Things Self-Directed Investors Should Know About the End of the Eviction Moratorium
Whether you own rental properties, are considering acquiring some, or are a tenant yourself, you probably have a strong awareness of the federal eviction moratorium that has been affecting both renters and real estate investors since 2020. With the moratorium deadline having been extended to the end of July 2021, the question now becomes, “What happens next?”
In this article, we have compiled three of the most-mentioned issues that economists, analysts, housing advocates, and financial advisors agree that all of us – including self-directed investors -need to know about the end of the eviction moratorium.
1. This may be the end of the beginning, but it is nowhere near the end.
When the federal guidance stalling ,evictions expires it will not mean that immediately all sorts of people will lose their homes. In some cases and in some states that have permitted preemptive eviction filings, it could mean that evictions might begin in 30 days or so, depending on whether a decision was reached during the moratorium period. However, in most states, it will simply mean that landlords can begin filing evictions once again.
Furthermore, many states have issued their own guidance on evictions that keeps the moratorium in place for all intents and purposes. Some states have created policies preventing evictions if the residents of the property have applied for aid but not yet received it or paid it in the form of back rents. Some states simply have made statements indicating their own statewide moratoriums will continue indefinitely once the federal moratorium expires. And, finally, some states are in the process of attempting mass rent forgiveness and the complicated details such a process will entail.
2. Promised financial assistance may not yet have been delivered.
In many areas of the country – especially those that are preparing to lift statewide moratoriums along with the expiration of the national policy – housing advocacy groups are working hard to distribute financial assistance to renters to help them catch up on back rent. Most landlords in today’s market do not want to evict tenants who tried to make payments during the pandemic and are often willing to wait on promised payments based on financial aid programs. However, many of these programs do not yet have funding in hand or have been notoriously slow in distributing funds.
“It is a race against the clock at this point to get the money to the tenants who need it to avoid eviction,” explained the president of a national nonprofit attempting to help renters using money distributed by the U.S Department of the Treasury. Unfortunately, both the money and many groups are mired in bureaucracy, she warned, and more assistance programs are coming online every day with new requirements and application processes that may further muddy the waters.
3. The “Flood” of evictions will not happen the day the moratorium expires.
Although most analysts agree that the end of the eviction moratorium will probably not lead to a housing crash, many are warning there will be a “flood” of evictions when the moratorium is lifted. In all reality, this is probably true. There will be many households that are, eventually, evicted for nonpayment of rent. However, those evictions will not take place on August 1, 2021, the day after the moratorium expires. In nearly all cases (probably all COVID-related eviction cases), there will still be a process through which the renter and landlord must progress in order to reach the eviction stage.
However, every county is different in every state. For example, in Georgia(which does not have a statewide eviction moratorium in place), every county has interpreted the moratorium differently. Some counties have started hearing cases; some are permitting landlords and tenants to file and answer paperwork but not adjudicating, and some have placed the entire process on hold. While there will certainly be an uptick in evictions that is probably concentrated in states that do not have state moratoriums, there will probably not be an immediate, concentrated downpour.
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