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Past due Rent Notice: CARES Act

Last time, we talked about the 3-day notices. Now, let us cover the exception to this rule.

In 2020, the CARES (Coronavirus Aid, Relief, and Economic Security) Act implemented the temporary eviction moratorium during COVID-19, there was one provision that is still in effect indefinitely and this is across the nation regardless of the state. If your property has a federally backed loan, or your tenant participates in a federally subsidized program such as Section 8, then you have to provide a 3-day notice to pay with a 30-day notice to quit. This does only apply to nonpayment of rent.

Please know that this is not legal advice. It is always recommended to consult a lawyer to ensure you comply with federal, state, and local laws, ordinances, and regulations.

Let’s first talk about who is affected by this. This law impacts all properties that have federally backed loans. Examples of federally backed loans are:

1.

Federal Housing Administration (FHA)

2.

Fannie Mae

3.

Freddie Mac

4.

Government National Mortgage Association (Ginnie Mae)

5.

Department of Veterans Affairs (VA Loans)

6.

Department of Housing and Urban Development

7.

Department of Agriculture (USDA Loans)
There could be a few other loans that are federally backed also, but these are the majority of them. If you are not sure if your loan falls into one of these categories, please contact your lender. This law applies to both single-family units and multifamily units equally.

This law also applies if your tenant is in a federally subsidized rent assistance program:

1.

Section 8 housing

2.

Housing Choice Voucher program

3.

Section 202 housing for the elderly

4.

Section 221 below market rate housing

5.

Section 236 multifamily housing

6.

Section 811 housing for people with disabilities

7.

Section 514/516 farm labor housing

8.

HOME Investment Partnership Program

9.

Housing Opportunities for People with Aids

10.

Federal Housing trust fund program

11.

Community Development Block Grant

12.

Violence Against Women Act (VAWA)

13.

Federal housing assistance to veteran families (VASH vouchers)

14.

Shelter+Care program

15.

Transitional housing for survivors of domestic violence

16.

HUD subsidized low-income housing programs

17.

Rural Development housing programs

18.

Low-income housing tax credit programs (U.S. Department of Treasury)

If any tenant in your property receives assistance, then your entire property is subject to the Cares Act including all non-subsidized tenants. With this in mind, please remember that it is discriminatory to reject a client based on their source of income. I covered this in a previous article.

So, if your property is subject to the Cares Act, what does that mean for you?

Under the Cares Act, if you are serving a tenant notice for nonpayment of rent you would still need to use a 3-day notice to pay, you would also need to serve a 30-day notice to vacate. This can mean more time for the tenant to find rental assistance or legal advice before you can start an eviction. I was not able to find a direct answer if you can refuse to accept payment after the 3-day notice to pay has expired. I would definitely consult with your attorney if you do not want to accept the late payment of rent.

If you ever need any help with handling your property management responsibilities, please contact us at 951-775-4771.

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