Business Assistance for Landlords During COVID-19

Pursuant to Executive Order No. 24, issued March 31, 2020, Governor Cooper and the Attorney General “strongly encourage all lenders to work with property owners to the best of their abilities to provide loan payment flexibility that enables owners to avoid evictions of tenants, in light of the State of Emergency in North Carolina.”

Real estate is considered to be a “passive” industry, subsequently not allowing landlords to qualify under the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act for a small-business loan or paycheck protection. Contrary to popular belief, the vast majority of landlords are not corporate entities. Most landlords own one or two residences and are not large operations. According to the U.S. Census Bureau, 74% of all apartment properties are owned and operated by mom-and-pop investors. These investors typically own small buildings, with only a few rental units in each, leaving little to no room in the budget for missed payments and/or extended payment plans.

On March 18, 2020, the U.S. Department of Housing and Urban Development issued a moratorium on foreclosure and evictions in connection with the Presidentially declared COVID-19 national emergency. Eviction moratoriums such as this, while a necessary measure, are not matched by like renal property owner protections – such as mandatory mortgage forbearance – thus, subsequently running the risk of shifting the economic burden of the coronavirus from tenants onto landlords.

In additional, North Carolina tenants find support in Governor Cooper’s Executive Order No. 24, encouraging all property owners to work with tenants to the best of their abilities to implement payment plans and avoid evictions, including cancelling pending evictions by notifying the relevant Sheriff’s Office. By failing to provide landlords with any monetary and/or time-related assistance to pay their mortgages, both the federal and state government are putting landlords at risk of mortgage defaults, unpaid utility bills, delinquent personal financial obligations, and ultimately to the forfeiture of their property. If you are a landlord and are concerned about your business and what steps are necessary during this COVID-19 pandemic, contact our experienced business litigation attorneys at Arnold & Smith, PLLC to schedule your initial consultation today.

• Congress’ Families First Coronavirus Response Act (HR 6201)
• Congress’ Coronavirus Aid, Relief, and Economic Security Act “CARES Act” (stimulus check information)
• FEMA
• USDA – information on access to food and school meals
• HUD’s information for renters and homeowners
• HUD’s Approved Housing Counseling Agencies
• Fannie Mae’s Disaster Response Network
• gov

The vast majority of tenants who have become unemployed as a result of COVID-19 qualify for the above-mentioned federal relief programs.

• North Carolina 2-1-1

Provided by United Way of North Carolina, NC 2-1-1 is an information and referral service. Families and individuals can simply call 2-1-1 to obtain free and confidential information on health and human services and resources within their community. This service directs those who call in need of financial assistance as a result of COVID-19, on the process of filing for unemployment benefits and any other assistance for which they are eligible.

So long as they do not evict renters, landlords may be allowed to fall behind on their mortgage payments amid the coronavirus health crisis.

The U.S. home mortgage companies, Fannie Mae and Freddie Mac, will grant mortgage forbearance to owners of multifamily properties in exchange for suspending evictions. While this is welcomed news for tenants and landlords alike, Fannie and Freddie only hold 39% of multifamily loans.

The above resources may be used by business owners to assist them financially in the wake of the coronavirus pandemic. While able to enroll in one of the resources described without assistance, it is strongly advised that business owners speak with an attorney to discuss their options and obtain legal counsel on how best to address any financial issues incurred. To ensure that property is not forfeited due to failing to make timely mortgage payments, it is vital that landlords act fast.

If you are at risk of falling behind on your mortgage payments and are facing a possible forfeiture, contact an experienced landlord/tenant attorney in the greater Charlotte area of North Carolina to help you understand your legal rights as a landlord, and how to best protect yourself against a potential property forfeiture. Contact an experienced landlord/tenant attorneys at Arnold & Smith, PLLC at 704.370.2828 or online to schedule your consultation.