The coronavirus pandemic that swept across the world created all forms of uncertainty and tragedy. California residents who rent their homes and suddenly find themselves out of work no longer have the means to make the mandatory monthly payments to their landlords. The renters’ respective crises have garnered national media coverage documenting their plight.
Conversely, owners of rental properties are also losing income. Those that only have one rental property in their portfolio – accounting for approximately 75 percent of landlords – also deal with their own equally devastating financial crises. That story is not nearly as high-profile with local and national news outlets.
Policies favoring renters and the financial consequences
Currently, California renters can stave off eviction if they can provide documentation that their financial shortfalls are caused by COVID-19. That emergency initiative allows renters to remain with a roof over their heads while their landlords see the past-due balances grow and the possibility of foreclosure becoming a reality. As the global pandemic continues, so do the extensions of those protections.
Forbearances are an option for landlords but have a finite amount of time before payments are due, even with the recent extensions from the White House stopping foreclosures. While in a vast majority, one-property landlords do not enjoy the financial foundation that their multi-property counterparts have to continue their rental operations.
California has implemented a new rent-relief program for landlords to recover up to 80 percent of back rent. However, conditions exist that are less than “landlord-friendly,” specifically an agreement not to evict if tenants have documented proof of financial hardship.
Options for property owners are scant. Some are starting to pursue their own form of justice by turning off utilities, locking tenants out of their properties, or outright harassing them for payments. For now, tenants can continue having a roof over their heads while landlords wait for action before losing theirs.