Are Tenants and Landlords Eligible for Emergency Rental Assistance?

 Posted on January 29, 2021 in Real Estate

The COVID-19 pandemic has had a huge impact on the U.S. economy. In addition to affecting the real estate market, it has led to job losses and reduced income for many people. This has caused some residential tenants to be unable to pay rent, which has also led to difficulties for many landlords, since they may not be able to make mortgage payments or cover other expenses. While lease modifications may help landlords and tenants address these issues, they may also be able to receive government aid to assist in paying the rent that is owed.

Emergency Assistance for Tenants and Landlords

The federal government and multiple states have placed a moratorium on evictions for residential tenants, and this moratorium has been repeatedly extended as the coronavirus pandemic has continued to affect people and families. While landlords are currently unable to evict tenants, any unpaid rent will continue to be owed. To address this issue, a recent economic stimulus bill passed by the federal government created the Emergency Rental Assistance Program, setting aside $25 billion to be used to help tenants pay past-due rent and address ongoing difficulties in making rent payments.

A tenant will qualify for assistance if at least one person in the household has experienced financial hardship due to COVID-19, including losing their job, experiencing a reduction in income, or incurring significant costs related to medical treatment. A tenant will need to demonstrate that inability to pay rent has put them at risk of homelessness or housing instability. The household income must also be 80 percent or less of the median income in the tenant’s area. Household income may be determined by looking at the total income earned in the year 2020 or the monthly income at the time of filing an application for rental assistance.

Applications for rental assistance must be filed by a tenant, although they can also be filed by a landlord on behalf of a tenant, as long as the tenant co-signs the application. Tenants must apply for assistance through the applicable state or local government program that is administering aid in their area. A household can receive assistance for up to 12 months of rent, as well as an additional three months if this is necessary to ensure that a tenant can maintain housing stability. In most cases, the funds can be paid directly to a landlord or utility company. Assistance must first be applied to any past-due rent that is owed before it can be applied to future rent payments. After using aid to reduce rental arrears, a household can only receive assistance with future rent payments for three months at a time, and to receive additional assistance, they will need to demonstrate that they still meet the qualifications for receiving aid.

Contact Our North Chicago Real Estate Lawyers

If you are a landlord who has not received rent from one or more tenants, the lawyers of Newland & Newland, LLP can assist in determining whether you qualify to receive emergency rental assistance. We will work with you to file the necessary applications to ensure that you can receive the payments that are owed. We can also help you address lease modifications or any other legal issues related to the property you own. Contact our Grayslake real estate attorneys at 847-549-0000 to arrange a free consultation.

Sources:

https://home.treasury.gov/policy-issues/cares/emergency-rental-assistance-program

https://www.forbes.com/sites/forbesrealestatecouncil/2021/01/27/understanding-emergency-rental-assistance-for-landlords-and-tenants/?ss=real-estate&sh=7074f0677826