Posted by WILMOTH Group on August 14, 2020

When the Governor of Indiana says he is ending the eviction moratorium he keeps his word!  At least he restated in a press conference this week that the moratorium will be lifted at midnight Friday August 14th.  After five long months of us having our hands tied when tenants failed to pay their rent, it had to come to an end.   The state and Indianapolis offered rental assistance programs a month ago.  It is now simpler to identify who really has pandemic related delinquency and who does not.
We are lined up to start filing at midnight Friday beginning with the oldest delinquencies and working forward.  Just a reminder that if a tenant has filed for rental assistance, we can not file for eviction unless their request was declined.  There have been a few of those and we are sorting out filing eviction or working with a payment plan.  We are talking about just a few.

CARES Act- Please Review

Important reminder!  The federal CARES Act required certain owners to not evict until August 1, 2020.  Last weekend President Trump signed an executive order that briefly extended the protections (through August 24) and did mandate that federal agencies determine if its continuation is really benefiting tenants harmed by COVID.  As of now we are required by the courts to provide a signed affidavit that a property filing for eviction is not covered by the CARES Act.  In the order, for a property covered by the CARES Act, landlords can now legally start charging late fees.  The soonest an eviction can be filed is Aug. 24. There is much debate on Congress extending these provisions making it crucial that we again ask all of our owners to review if the CARES Act applies to their property.
Please let us know immediately if you have a delinquent property that fits the following:

DEFINITION OF CARES ACT COVERED PROPERTIES

The federal eviction moratorium applies to “covered dwellings” which includes those dwellings on or in “covered properties.” The Act defines “covered property” as property that:

  1. Participates in a “covered housing program” as defined by the Violence Against Women Act (“VAWA”)*;
  2. Participates in the “rural housing voucher program under Section 542 of the Housing Act of 1949”;
  3. Has a federally backed mortgage loan; or
  4. Has a federally backed multifamily mortgage loan.

*VAWA Covered Housing Programs:
HUD

  • Public housing
  • Section 8 Housing Choice Voucher program
  • Section 8 project-based housing
  • Section 202 housing for the elderly
  • Section 811 housing for people with disabilities
  • Section 236 multifamily rental housing
  • Section 221(d)(3) Below Market Interest Rate (“BMIR”) housing
  • HOME
  • Housing Opportunities for Persons with AIDS (“HOPWA”)
  • McKenney-Vento Act homelessness programs

DEPARTMENT OF AGRICULTURE

  • Section 515 Rural Rental Housing
  • Section 514 and 516 Farm Labor Housing
  • Section 533 Housing Preservation Grants
  • Section 538 multifamily rental housing

DEPARTMENT OF TREASURY

  • Low-Income Housing Tax Credit (“LIHTC”)/Section 42

Rural Housing Voucher Program 
Properties with federally backed mortgage loans (1-4) 
Properties with federally backed multifamily mortgage loans

Cash For Keys Alternative

Just a few weeks ago we did not believe this moratorium would be ending by mid-August.   We organized a Cash For Keys program and started discussions with delinquent tenants.  We suspected that tenants would have little motivation as long as eviction protections were in place.  The incentive was in the cash offered and we started at $250.  We heard back things like “it will cost me twice that just to move”..if we heard anything back at all.
Then the announcement that the moratorium is ending.
Considering that we do not believe you can get many agreements for cash for keys for less than the cost of an eviction/damages filing ($300-$400) we have tabled this program.  It can still be utilized if an owner prefers.  Our recommendation though is to wait for a legal possession order granted by the courts.  While we know the courts will be backlogged on possession hearings, it is time wasted to believe a tenant will agree, and then perform, on a two week cash for keys agreement.
Once we get court dates, maybe an owner will decide to double down and add a cash for keys offer on top of their legal expenses.  That option is open but after months of delinquency our assumption is that may not be the best use of cash for what has turned into a very bad cash flow year.

Eviction Court Dates

We will get those to you as soon as we have them.
That’s it for this week.  Stay Safe and Healthy!
WILMOTH Team 

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WILMOTH Group is headquartered in Indianapolis, Indiana and Fort Myers, Florida. We focus on providing creative local solutions for a variety of residential real estate needs including, properties for sale, property management services in Indianapolis, and short-term management services in Tampa and Fort Myers.