Just as April showers bring May flowers, every new month brings a new obligation to pay rent. The difference, presently, is we are all under a shelter in place order that requires many businesses to change operations, often resulting in decreased revenue; some businesses need to close entirely; many employees now must work from home; and many employees are left without jobs.
The downside to this reality is that many people and businesses may not be able to make a rent payment going forward in the near future. The purpose of this article is to discuss briefly the matter of rental obligations, evictions and related issues from both perspectives: tenant and landlord.
Neither shelter in place orders nor the recent emergency relief legislation releases, relieves or eliminates the obligation or need to pay rent to a landlord with some exceptions. First, the CARES Act passed on March 27 provides significant benefits to residential tenants if their landlords have federally-backed mortgages, are properties covered under section 41411 of the Violence Against Women Act of 1994, or the property is part of the Rural Housing Voucher Program. For landlords and tenants in these situations, a landlord may not serve an eviction notice until July 25, 2020; they must give provide a minimum of thirty (30) days to leave the property, which would be August 24, 2020, at the earliest; and a landlord cannot charge late fees or penalties.
For landlords that do not fall under these programs, however, the CARES Act does not suspend the right of landlords to pursue evictions for nonpayment of rent. Other limitations currently in place, however, may impact a landlord’s ability to evict. Even prior to the CARES Act, Illinois Gov. Pritzker’s shelter in place order, suspended all evictions until April 30, 2020. While that date is fast approaching, it may be extended.
Further, most courts in the state of Illinois, including Kane County, Kendall County and DuPage County, have closed their courthouses to everything but specific emergency matters and some criminal matters. Eviction cases have basically been placed on hold until the court houses reopen to regular business, and that hold on cases is likely to extend beyond April 30.
In addition, the sheriff departments in these and most other counties are not enforcing eviction orders that were granted prior to the Shelter in Place order. Therefore, it will be extremely difficult, at this juncture, for landlords to evict tenants for any reason, until at least the end of April, and maybe beyond.
The problem, though, is that anyone behind on their rent now will likely continue to remain behind on rent payments in the future when the current protections end, and the problem will likely be worse because the past due amount will grow.
Some good news is that the CARES Act provides several methods of funding to assist tenants in meeting their rental obligations. If you are struggling to pay rent, you should contact either 211 or Fannie Mae’s Disaster Response Network at 877-542-9723 for information on the programs for which you qualify the programs are available in your area and.
The CARES Act also grants residential landlords with federally backed mortgages on the rental properties the right to seek forbearance on mortgage loan payments for thirty (30) to ninety (90) days. As a condition of the forbearance, the landlord shall not seek to evict a tenant for nonpayment of rent or charge late or penalties for late payments of rent. As stated above, notices to evict due to nonpayment of rent, can not be issued in any case until after July 25, 2020, and the landlord must give a tenant thirty (30) days to vacate.
An important caveat is that these limitations only apply to evictions related to non-payment of rent. The limitations do not apply when the reason to evict a tenant is unrelated to the nonpayment of rent, including violation of other terms of a lease (such as noise violations) or failing to vacate the premises upon termination of the lease term.
For businesses that are struggling to pay rent, there are various loans available to help meet payroll, rent and other expenses. These loans are available both through the SBA and Illinois Emergency Small Business Grant and Loan Assistance programs. More information on these programs, including qualifications, loan amounts and applications can be found on their websites.
Practically speaking, for both tenants and landlords, whether residential or commercial, communication will be the key to getting through this trying time. While some limitations have been placed on a landlord’s right to evict, and relief programs available to help tenants with rent and landlords with mortgage payments, they do not alleviate the duties to pay rent entirely, and relief from these obligations can only be granted by agreement.
If you are a tenant, residential or commercial, and will struggle to pay your rent, talk with your landlord about what you can afford to pay and when. If you are a landlord, you need to understand the limitations on your right to evict tenants at this time. If you have a mortgage, you might do well to talk with your lender about forbearance during this time.
Landlords would do well to keep good tenants who have a proven track record of making payments in the past. When the stay-at-home order is lifted, the world isn’t going to bounce immediately back to normal. Businesses will continue to struggle. It will take time for businesses to hire employees back. Some businesses will likely shut down permanently. High unemployment will continue for a time.
Landlords who go ahead and evict tenants as soon as the restrictions are lifted, may find themselves sitting on empty spaces with no immediate prospects for new tenants. It may be better, in the long run, to work with your tenants to keep them in your space by granting some forbearance yourself and tacking the amounts owed to the end of the lease term. As agreements are reached between landlords and tenants will be in order, those agreements should be reduced to writing to be sure that both parties are “on the same page”.
If you are a landlord or tenant and need legal assistance with an eviction, do not hesitate to contact us to discuss your unique and specific situation. Though our office is presently closed to the public due to the COVID-19 threat, we are still working remotely and able to meet with clients over the phone or via video-conferencing on several platforms. Please do not hesitate to contact us if you have questions or concerns about rental obligations and evictions. We live in unique times, and we are all attempting to work through these matters as best we can.Roman J. Seckel Drendel & Jannsons Law Group 111 Flinn Street Batavia, IL 60510 630-523-0543 www.batavialaw.com [email protected]