Ep. 6 | Special Report Regarding Covid 19 Eviction Moratorium

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On this episode of The Mobile Home Park Lawyer Podcast, Ferd brings us a special report regarding COVID-19 eviction moratorium. Ferd clarifies what rights you have as a tenant and what requirements you must meet to be able to legally resist eviction.

 

“It’s important to really work with your tenants. Try to get them on a payment plan, try to get them to follow the normal lease rules, and make sure they fill out that affidavit.”

 

HIGHLIGHTS:

0:00 – Intro
1:19 – The CDC are halting all evictions to limit movement
2:01 – Ferd believes Trump introduces this halt on evictions to win some votes and to keep the property tax coming in
4:33 – This eviction moratorium may not apply to all renters
5:44 – Individuals need to try their best to get help from the government
6:05 – The individual has to be unable to pay the full rent due to loss of earnings
7:05 – Individual must make their best efforts to pay as close to the rent as possible
8:52 – It’s on the renter to fill out an affidavit
9:26 – The eviction must likely render the individual homeless
10:44 – The eviction order is until the end of the year
11:47 – The order doesn’t relieve anyone from the obligation of paying rent
12:10 – You can still be evicted and charged extra fees and interest

 

RESOURCES:

Letter to Residents re Eviction Moratoriums

 

FULL TRANSCRIPTION:

Welcome back mobile home park nation. Here today with a special report, I say special because it’s really one of those timely reports that frankly won’t be as valuable to you. Hopefully not at least a year from now, two years from now, three years from now where pretty much most everything else I spit out is timeless with all due humility. Okay. That might not be true. But today we’re talking about the Rona, COVID-19 and how it’s jacking with your business and your life. Now, obviously there’s some serious stuff going on with the coronavirus, but there’s also some horrible public policy. And I think this recent eviction moratorium as declared by the centers for disease control and prevention, which by the way, has no real authority over evictions and really has anything to do with real estate period. But anyway, the CDC, they are temporarily in their world, halting all evictions. And this is in response to president Trump’s executive order on fighting the spread of COVID-19. So ostensibly, the CDC is saying, hey if you evict somebody, they’re going to have to go move elsewhere and either be homeless by other people or move in with their parents or back in their grandma’s basement or wherever they came from before. And it’s going to cause more coronavirus and we’re all going to die. So we’re going to take over your business, take over your livelihood.

My conspiracy theory and I am full of conspiracy theories. If you haven’t figured it out yet, my conspiracy theory is well, twofold. One, president Trump wants to win reelection. Okay. I don’t blame him for that. And overall I think president Trump is by far the best president we could have had in the last election or this election for purposes of real estate landlords. He’s very pro-business in general, very pro real estate investor. Good for the tax code, etc. This one, I think he was just reaching to try to get some sympathy votes and to not look like a harsher old rich landlord that he essentially is. But I think that was the first thing he wanted to just win votes.

The second item I think, is this government in general, because this has been going on for the last six months at local government level too, the government realizes that their revenue is going to be down. Income taxes are going to be down. Property taxes are going down. Sales tax is going to be way down. So they going to cut services and tighten their belt like the rest of us? No, of course not. They’re going to raise taxes or in this case, they’re not going to raise taxes. They’re going to provide services by pushing the social welfare net onto landlords. Basically, if we landlords evicted 1, 10,100,000 people, where are those people going to go? They’re going to go government for unemployment, for housing as vouchers, for food stamps or going to be homeless. They’re going to cause more crime, all these sort of fears of local government. Some of which maybe well-founded have basically got them to say, well, we’ll just stick it to these rich landlords. Let them suck it up, which in the short run might work, but really not that short. It’s going to, there’s very few people that can just stomach month after month and my month of no revenue and still covering the expenses. So I think this was bad public policy, but today I’m going to break down a little bit of what you can do to try to minimize this pain.

Now I’ll put a disclaimer out there. One, I’m not your lawyer, this is not legal advice, there I said it. Two, There’s massive penalties if you get this wrong, which is kind of unbelievable. Criminal penalties, if you’re an individual, a hundred thousand dollars per violation, if it results in no death, okay, that’s good, no death, but $100,000, $250,000 if it does result in death. If you’re an organization. And frankly, if you own a mobile home park, you better be some sort of organization, an LLC or limited partnership or limited liability partnership or something, not your personal name. Well then guess what? The price of poker doubles and now it’s $200,000 per event or $500,000 per event if it results in death. So don’t mess this up. So, but what can you do? Well, what you can, first you can do is you can realize and read the law or read the summary. I’ve got a summary letter on my website, www.themobilehomelawyer.com, and you can have it for free. Again, I’m not your lawyer though. Take it, copy and paste. That’s what I did. I didn’t draft. Some real lawyer did it at the government and I’m just copy and pasting them what’s in there. And then I’m putting a little color commentary to it to try to mitigate the damages as a business owner.

So the first thing to realize is this does not apply to everybody. So you have to determine if your renters are eligible. So my draft letter says, tells them the facts. I’m giving them. I’m being transparent. I’m telling them that they may have rights. I want them to build up, utilize the rights, they may be harmed. I don’t want to stick it to people they are harmed, but I don’t want to give away my money to somebody who’s just taking advantage of system and has not been harmed. So if my, you know, if I see one of my residents and they’re coming home from work and they got on a Applebee’s t-shirt and they just came from work like, wait a second, why are you claiming you’re out of work? You’re not out of work. You just came from work. Okay. That’s one of the criteria you’ll hear in a minute that they really have to satisfy in order to be eligible. And here we go. The first one, the individual has used best efforts to obtain all available government assistance for rent or housing. So to me, that means if you’ve not applied for housing assistance, section eight unemployment resources, and you’re likely ineligible for eviction relief.

Number two, the individual is unable to pay the full rent or make a full housing payment due to substantial loss of household income and loss of compensable hours of work or wages, a layoff or extraordinary out of pocket medical expenses. Keyword, unable and due to, okay. So if you’re able to pay and you don’t want to pay, then you’re going to be ineligible for eviction relief. If you have not lost wages or hours or income due to COVID, then you will likely be ineligible for eviction relief. I’m just letting my tenants know their rights, but then also it doesn’t do me or them any good to deceive them or for them to misunderstand what their rights are. And then they get stunned later. Because I will often tell my tenants, if you don’t pay the rent, I have the right to evict you and per law I can garnish your wage. Maybe your tax return, it is going to go on your credit report. This is going to be bad for you. So if you can pay and don’t, you’re kind of making a foolish decision, I’m trying to lead them to the light here.

Number three, the individual is using best efforts to make timely partial payments that are as close to the full payment as the individual’s circumstances may permit, taking into account other non-discretionary expenses. The non-discretionary expenses and all that. Like how do I know what they have? I mean, can I say, yeah, I see you have a satellite dish. Clearly you should be paying rent if you can pay for cable or Netflix or satellite or whatever. Yeah. That’s not an argument I want to take to court and I don’t really know what they can afford, but I can tell them in this letter like, look, if your rent is a thousand and you can afford to pay $1, then you have to pay $1. If you can afford to pay $999, then you’re required to pay $999 or you will likely be ineligible for eviction relief. A judge is likely to require proof of any hardship. Landlords might even subpoena bank records or paycheck stubs as part of the eviction process.

So the burden appears to be on the tenant at some point. And ultimately I should have said this beginning, but for this whole eviction moratorium lawyers cross country are to some degree guessing because there’s no real case law yet, nobody really knows and different states, different tenant rights organization are interpreting this differently. For example, are we required to give the tenants the form, the affidavit that they’re supposed to fill out saying dear Jesus and landlord, I swear, I promise that I’m eligible for relief. Okay. What if they are lying? There’s no penalty for them. If I get stuck doing something wrong, I get hit with a $200,000 per occurrence penalty. Yikes. So I read this portion of the statute and read the whole thing. I’ll be honest. I’ve read lots of summaries, I followed it, but I read portion statute and really for this provision, who has the onus, do I have to give them this affidavit and like point them and lead them to the water or do they have to come up with it? And where I read it is, it’s on them to fill out the affidavit. I’m giving them information linked to their rights. So there’s some, some CYA, you know, some cover for me, but really it’s on them to do what I think. And am I right or wrong? I guess we’ll see. Practical challenge I’m having right now is some of the judges are not even holding hearings period, even though the eviction is supposedly, you know, only for nonpayment of rent. I mean, somebody who’s breaking all kinds of rules, I could evict them. I don’t know, time will tell.

Okay, the next item is the eviction would likely render the individual homeless or force the individual to move into and live in close quarters in a new congregate or a shared living setting because individual has no other available housing options. Okay. Really I can’t ever figure out what the, I don’t know their family situation. I don’t know where they’re going to go. It’s like hard to fact check. So I can just tell them like, look, please review the proceeding sentence carefully before relying on the possibility of eviction relief. Ultimately though I do think this is going to all enter the tenants favor, but this is designed, I don’t want to say it’s a bluff, but it’s kind of a bluff to just convince the tenants, Look, you have rights and don’t try to take advantage of them if you’re lying, but some people are going to do it. Obviously there’s always people taking advantage of system. And some of those people are going to be saved from eviction. Even as they’re sitting there working and piling up money and just not paying their bills. I read a story yesterday of a guy who he had a medical procedure halfway across country. He would be gone for a few months. So he rented out his multimillion dollar condo on the beach. Well, the person that was like, it was almost like Airbnb, like a very short term renter who was like, you know, not a high credit risk. This person decided, this is kind of nice. I’ll just live here for free for the next six months. Cause this eviction order is moratorium, by the way, it’s currently going through December 31st, 2020. So just the end of the year will be extended. I don’t know. I mean probably right. I mean, how many other things keeping extended and the state levels have been doing this? I mean, all this is doing is kicking the can down the road.

For mobile home park tenants or mobile home park landlords we’re in better shape, right? Because if somebody owns the home and they don’t pay us for two, three, six months, well within the six months, you know, the payment is coming and we’re going to take your house, right. We’re going to make you move your house. So you might as well pay. It’s your moral obligation. It’s your legal obligation, you might as well pay. Now, if it’s a Park owned home, you know, you’re pretty much in an apartment world. And if they don’t pay, they don’t pay, they don’t pay. Well guess what? In the six months they’re going to jump in the middle of the night. They’re going to leave you with crap behind and no money. And it’s going to suck. So, you know, not really a lot you could do about that in my opinion is just try to give it to them to pay and convince them to pay for any way you can, try to give him a payment plan, document, document, document. That’s kind of the general thing. Cause the key here to remind them is this order does not relieve any individual with an obligation to pay rent. This is not, this is not rent cancellation or rent abatement. This is not the free rent you see on the sheets hanging outside of New York City building windows, okay. This is just, you can’t evict. So I can still charge and collect late fees, penalties, interest. I can still later pursue garnishment, etc. I can still evict you for health and safety reasons. You know, you get some crazy pit bull run around that could endanger the safety of others. I can evict you. You’ve got excessive filth or you know, you’re cooking meth or something. I can still evict you. Again, the challenge is going to be getting a judge to step up and hold court and be the mean heartless judge is going to do that. But there’s probably one out there. If you find one, maybe tell your friends.

Again, this letter, this process I’m sending out to people it’s designed to make them aware of the rights, but also to clarify their ongoing obligations to pay rent. And I really think it’s a disservice to the tenant to deceive them otherwise.

So kind of in conclusion, I mean, we don’t know how this is all going to end, but it’s important to really work with your tenants. Try to get them on a payment plan, try to get them to follow the normal lease rules and make sure they fill out that affidavit. If you’re going to, you know, call off the dogs on them. But ultimately if you want to proceed with eviction, you can try to proceed to eviction. Just be aware that it’s possible it’s not going to go anywhere for a while and you got to be real specific as to why you’re evicting somebody. If it’s just nonpayment of rent, you better make sure that they are not harmed or that they’re not eligible.

So there you go. Special report. COVID-19 talk to you soon.

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